blockchain enters congress
In March the United States Congress submitted a report pointing out just how useful Blockchain technology could be for local authorities. "Government agencies at all levels should consider and examine new uses for this technology that could make the government more efficient in performing its functions", says the report, underlining: "Blockchain technology has the potential to help the economy function more efficiently and securely." This transparent, secure and decentralized ledger system provides an excellent means of storing information and guaranteeing the integrity of transactions between several parties. This also makes it potentially very attractive for local authorities. Among their main roles is the need to inspire confidence in ordinary people who come under their administrative responsibility. While virtual currencies, especially Bitcoin, which use the Blockchain, are often regarded with suspicion by the authorities – China has even banned InitialCoin Offerings (ICOs) as a means of raising funds in virtual currencies – but the potential of the Blockchain approach, i.e. the architecture underpinning those 'cryptocurrencies', goes far beyond this current use and is generating a great deal of enthusiasm.
The US Federal Government has implemented a number of pilot tests, with the public health sector, the transportation sector and the army. Several US state administrations, including Colorado, Illinois and Delaware, are also taking an interest in the technology. Meanwhile, the government of India is studying how to use Blockchain technology in education, health and agriculture and Dubai has set up a special Council to look into its potential in various fields including health, ownership title, local public services and import/export arrangements. China, the Netherlands, Singapore and Canada are all also studying how they might use Blockchain technology to help achieve a variety of national goals and objectives.
Updating public institutions
Protecting personal data
Franco Amalfi, Head of Innovation, North America at Oracle Public Sector, believes that one of the most promising uses of the Blockchain for governments is in data protection. Countries hold a lot of sensitive information on their citizens, which is regularly targeted by cyber-attacks. In 2015, attackers hacked into the United States Office of Personnel Management, the US federal government agency that manages the government's civilian workforce. They got hold of fingerprints, social security numbers and the CVs of twenty million Americans.
The Blockchain has the dual advantage of being very difficult to hack and being highly encrypted. As a decentralized database, it has no central vulnerable point. Given that the data is stored throughout all the points in the network, you would have to hack more than half the participants at exactly the same moment in order to compromise the integrity of the database. Moreover, while the Blockchain is a public ledger, it is also encrypted. A person's private information is unreadable unless you have the cryptographic key, which only the person concerned has. Hackers who manage to get into the system would find themselves with unusable data. These two factors make the Blockchain an ideal tool for storing citizens' confidential data.
opening up public data
Promoting open public data
The Blockchain could also serve to open up public data, which would both raise citizens' trust in government and help build a wide variety of those digital applications that we increasingly depend on in our daily lives. Every time you look at the weather forecast on the Internet, or use your GPS, you are in fact using data supplied by the government. The goal of 'open data' is still far from being fully achieved, however, as shown by the recent move by the Trump administration to delete a slew of data from the White House website, notably information on the government budget and details of White House staff salaries, all information that was made public by the Obama administration.
Useful for patent or copyright claims, the Blockchain could also ensure that a government agency or company verifiably published its data.
The Blockchain could provide a way to make public data transparent and unalterable. The same functionality could also be used for company data. Companies are not always exemplary in this respect, as illustrated by them is information on vehicle emissions published by Volkswagen and the inaccurate information supplied by Uber on its drivers to the US government. "Useful for patent or copyright claims, the Blockchain could also ensure that a government agency or company verifiably published its data – and allow the public to access and confirm that the file they have is the same one that was signed and time-stamped by the creator", wrote Brian Forde, an American entrepreneur who was a senior advisor in the Office of Science and Technology Policy at the White House during the Obama Presidency, in the Harvard Business Review.
Nevertheless, underlined Forde: "The time-stamp and signature alone don't prove that the data is accurate, of course. Other forms of checks and balances, such as comparing data against tax or Security and ExchangeCommission filings, can be added to ensure that there are legal ramifications for entities that manipulate their data. In the same way, government data, like employment or climate data, could be checked against local, state, or academically collected information that has already been time-stamped and signed by credible institutions."
Several US states have already launched initiatives of this kind. Colorado is currently looking at using the Blockchain to publish public data and documents. The Illinois Blockchain Initiative is investigating ways and means of giving every citizen, from birth, a digital identity hosted on the Blockchain. This would include a set of personal details – inter alia the child’s date of birth and blood group – information which could however only be accessed with the consent of its owner.
using the blockchain to prove identity
Managing people's identity and property
refugees worldwide with no means of proving their identity
The Blockchain could thus prove to be an excellent tool for helping to manage personal identity, a thorny problem which is hindering economic development and growth. "There are about 65 million refugees in the world today, many of whom have fled without any sort of papers, degrees or proofs of ownership, with no way of proving their identity. This makes it hard for them to do business, open a bank account, request a loan or apply for a job. As a way of safely storing information, the blockchain can directly address that issue", argues Paul Lamb, an independent consultant specializing in the Blockchain.
Mutual Distributed Ledger technology is ideally suited for immutable identity document exchange networks, and there are many initiatives under way to realize their potential
The problem goes far beyond the refugee crisis. In many poor countries, where the government is not actually in full control across the entire territory, a percentage of the population have no way of proving their identity. This makes it difficult to confirm ownership of property, access social security benefits, or even to travel around freely. It is estimated that 2.4 billion people are affected worldwide. Michael Mainelli, Chairman of Z/Yen Group, a commercial think-tank, believes that the Blockchain could provide a solution by making it easier to digitize, store and share official documents. "Mutual Distributed Ledger technology is ideally suited for immutable identity document exchange networks, and there are many initiatives under way to realize their potential. Empowering individuals to store, update, and manage access to their data seems rather obvious", he wrote in the Harvard Business Review. Estonia has in fact already set up a Digital Identity system based on a distributed database, which is in fact a close approximation to this ideal vision.
Ownership management is another potentially important use of the Blockchain. In developing countries many people have no formal property title to the land, houses and commercial property they own. This means firstly, that they are at the mercy of powerful interested parties; and secondly, that they are unable to capitalize on their own property through the market system. Peruvian economist Hernando de Soto sees the absence of property rights as the main obstacle to growth. The Blockchain could be a solution, providing a secure means of registering property titles online and trading them. The governments of Sweden, Georgia and Ukraine are currently assessing how the technology could be used to register land title and several states in India are also looking into this. Georgia has taken a step further by authorizing the use of Bitcoin in the sale and purchase of property title and is planning to extend the use of theBlockchain to notarial deeds.
Blockchain: the backbone of tomorrow's Smart City?
With the advent of the Internet, governments have been gradually moving into the digital age, so in the longer term, why not use the Blockchain approach to host public services? With this in mind, Dubai has set up a Global Blockchain Council, on which sit several giants of the new tech industries, includingMicrosoft and Cisco. The Emirate wants to enable citizens to pay their bills, renew their driving licences, store their medical data, and buy and sell real estate using Blockchain technology. Dubai has created its own cryptocurrency, EmCash, designed to enable residents to pay for access to public services.
We want to make Dubai the first government using the Blockchain by 2020
The Dubai government has called on the services of UK startup ObjectTech ObjectTech to help set up a system of digital passports designed to avoid manual checks at airports. In addition, the Emirate has set up a platform entitles 'Blockchain as a Service', intended to enable various government agencies to use the technology. The basic aim is to make local services more efficient, eliminate paperwork and combat corruption and special privileges, by making all local authority services transparent, with information fully available for public consultation on the Blockchain. "We want to make Dubai the first government using the Blockchain by 2020", says Aisha Bin Bishr, Director General at theSmart Dubai Office, which runs Dubai's Smart City program.
Meanwhile there are plans in other quarters to extend the use of the technology to the mechanisms of democracy. Boston-based startup Voatz is working to incorporate Blockchain technology into the voting process. Since it is transparent and secure, it provides a promising means of combating ballot box stuffing and other forms of electoral fraud. Voatz has conducted a number of pilot projects covering 70,000 people voting in various different elections. The company is currently working with the West Virginia and Massachusetts electoral authorities. And most recently, in March, Sierra Leone held the world's first election using Blockchain technology with a view to combating voting fraud, which goes to prove that this promising technology is not the sole prerogative of the richer countries of the world.