William
Mougayar is the author of "The Business Blockchain" and a board
advisor to the Ethereum Foundation, the non-profit that oversees the
development of one of two blockchains seeking to popularize the distributed
computing platform.
In this opinion piece, Mougayar offers his thoughts on
why global governments should be – and increasingly are – embracing
blockchain.
As government services are one
of the most obvious and immediate application areas for the blockchain, it's no
surprise progressive governments are already working on initiatives.
In the first half of
2016, cities, municipalities and governments have been vocal in their
plans for the technology.
Indeed, a quick overview of
the projects in development shows how far the idea that blockchain could change
government services has spread around the globe:
Delaware
In Delaware, the state where a
majority of new companies will likely incorporate, Governor Jack Markell
announced two blockchain
initiatives in May at CoinDesk's Consensus 2016 event.
As detailed by the governor,
the first effort is focused on moving state archival records to an open
distributed ledger, and the second allows any private company that incorporates
in that state to keep track of equity and shareholder rights on the blockchain.
At the time, Markell declared
Delaware is "open for blockchain business", and hopefully, 2016 will
see continued progress made in delivering on this promise.
Singapore
On the other side of the
world in Singapore, the government has turned to blockchain for different
reasons.
There, the city-state is
seeking to prevent traders from defrauding banks, driven by an incident
where Standard Chartered lost nearly $200m from a fraud in China’s
Qingdao port two years ago.
Here, fraudulent companies
used duplicate invoices for the same goods to get hundreds of millions of
dollars from banks, so the Singapore government developed a system with the
local banks focused on preventing invoice fraud by using the blockchain to
create a unique cryptographic hash (a unique fingerprint) of every
invoice.
The banks share this unique
key, rather than the raw data. If another bank tries to register an invoice
with the same details, the system will be alerted.
Estonia
Long one of the more
progressive digital governments, Estonia has established an e-residency program
where anyone in the world can apply to become an e-resident of Estonia.
In return, residents receive a
digital ID card with a cryptographic key to securely sign digital documents,
eliminating the need for ink signatures on official paperwork.
An e-resident can also open
bank accounts using Estonia's e-banking system, set up an Estonian company
using the country's online system and use their e-services. With the
blockchain, Estonia is bringing worldwide residents to them virtually,
and gaining new revenue streams accordingly.
Estonia also has a healthcare
initiative where medical records are tracked, and as a patient, you know who
looked at your record and when. This puts you in control of your own data, and
you have transparency about the medical care you are getting.
Georgia, Ghana and Sweden
Another emerging area of focus
is in government land registries.
The Republic of Georgia, for
example, is developing a blockchain project focused on this goal and
spearheaded by their National Agency of Public Registry. They want to show that
Georgia is corruption free, modern and transparent government.
Another land registry
application is taking shape in Ghana, West Africa, where they are implementing
it in 28 communities to enable tamper-resistant property ownerships.
Again, the driving element was
to make a statement against the perception that the country had corrupt
practices, and this initiative is used as a signal to attract foreign
investors.
Sweden is planning to place real estate
transactions on the blockchain so that all parties involved
in the transactions – banks, government, brokers, buyers and sellers – would be
able to track the progress of the agreement once it is completed. This will
enable instantaneous confirmation of valid transactions with the utmost
levels of security and integrity.
UK
The UK is exploring the use of
a blockchain to manage the distribution of grants. Monitoring and controlling
the use of grants is incredibly complex, and subject to potential fraud or
abuse.
A blockchain, accessible to
all the parties involved, is a better way of solving that problem.
Activity areas
If your government, county,
municipality, town, city or jurisdiction is not thinking about the blockchain,
they should be.
There is plenty of room for
innovation, especially in small cities and municipalities, as they are a
perfect starting point.
Given the early stage of
blockchain technology, it is a lot easier to implement solutions at smaller
scales first, in jurisdictions that have between five to 300,000 citizens,
instead of larger cities of more than a million inhabitants.
As a government entity, what
can you do with the blockchain? Generically, there are four categories of
activity:
Verification. Licenses, proofs of
records, transactions, processes or events. Did this event take place? Was this
service performed on this piece of equipment? Does this person have the right permit?
Movement of assets. Transferring money from
one person/entity to another. Enabling direct payments, once a work condition
has been performed.
Ownerships. Land registries,
property titles, and any type of real estate ownership. The blockchain is a
perfect keeper of the chain of custody for any physical asset.
Identities. Government, cities
should issue blockchain e-identities to its citizens, enabling them to securely
use services like voting. An e-identity could become similar to a passport,
allowing its holder access to a variety of services and rights.
Next steps
But, how do we get there? And
what actions can the government take?
Government
leaders should:
Get up to speed on the
blockchain by understanding it first, and committing to exploring its
potential.
Put people in charge of
developing a blockchain strategy. Maybe there are employees that have been
exploring it already, and they need to spread their wings and gain legitimacy
with new projects.
Start experimenting with
blockchain technology via proofs of concept, sandboxes and small projects that
do no harm.
Develop new and more
progressive ideas that are increasingly ambitious, and touch the lives of the
citizens they are serving.
Make a difference. Commit to
introducing innovative blockchain-based solutions that cut costs and provide
better or faster services to citizens.
Let’s hope the public sector
around the world starts putting the blockchain on their agenda. Maybe then, we
can see a significant difference in how government services are delivered.
Support beam image via Shutterstock
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