Governments have an obligation to provide fair and efficient services to the public. Unfortunately, providing transparency and accountability often reduces efficiency and effectiveness, or vice versa. Governments are often forced to improve one at the expense of the other. On rare occasions, the advent of technology allows governments to improve justice and Effective.

The transition from paper-based recording to computer databases is one such technology. The internet is something else. Blockchain is next. Like the internet before it, blockchain will not only improve the way the public interacts with government services, it will also have far-reaching economic and social implications.

Related: Is cryptocurrencies approaching the “Netscape era”?

How governments can use blockchain

Blockchain will have far-reaching and multifaceted implications for government services. Here we examine some promising examples.

accuracy

Identity is the basis of interaction with government services, but current systems are still flawed. Let’s look at two. First, identity requires extensive and expensive infrastructure. While developed countries enjoy the benefits of strong national identities, many developing countries struggle to create strong national identities. The World Bank estimates that around 1 billion people do not have formal proof of identity. Second, the current identification system is not secure. For example, India’s biometric authentication number system known as aadhaar is susceptible to many types of fraud, including those related to land transfers, passport purchases, loans, voting, and more.

The strengths of the federated blockchain are great for mitigating the weaknesses mentioned above. The decentralized design of blockchain makes its implementation and coordination much cheaper than centralized designs. Its lack of trust makes it safer.

Related: Decentralized identity is the way to fight data theft and privacy

housekeeper

Public procurement represented 29% of total government spending in OECD countries in 2013. The injustice and lack of transparency in the procurement cycle open the door to corruption. The OECD estimates that up to a third of investments in publicly financed construction projects could be lost to corruption.

Blockchain-based solutions have the potential to impact almost every aspect of the procurement cycle, such as major reforms related to transparency and stakeholder engagement. This pilot concluded that “despite the challenges, blockchain-based electronic procurement systems offer unique advantages in terms of procedural transparency, permanent records and honest disclosure”.

Related: The UN’s “Decade of Delivery” needs blockchain to be successful

Choose

Despite the advent of the digital age, paper voting remains the predominant voting method. This is understandable given the importance of elections for the democratic process. However, paper-based systems still face cost, time, and integrity issues. The alternative to paper-based voting, the so-called Direct-Recorded Electronic (DRE) voting machines, had mixed success. Brazil introduced DRE in 1996, but security concerns remain. DRE in the US started in 2001; However, progress and adoption have slowed as problems with the DRE persist.

As an even newer technology, the blockchain is not yet ready to replace current voting systems, but it has underpinned existing systems. For example, our company, in cooperation with the University of Indonesia, has set up an independent blockchain-based verification system to ensure the outcome of the Indonesian paper selection in April 2019. The project can report approximately 25 million votes within hours of polling stations closing. Official results, on the other hand, are only published after a few weeks.

Related: The voting has evolved: Blockchain technology outperforms paper and electronic voting

In addition to government services

Governments experimenting with blockchain are starting to treat it as essential infrastructure. You are beginning to understand that a blockchain infrastructure is critical to unleashing economic activity. Governments want to have a say in the development of standards that will eventually be adopted around the world. China and the European Union are two of those leaders, and both are developing blockchain initiatives.

China

The Chinese leadership has been extremely proactive in supporting blockchain initiatives. In December 2016, blockchain was mentioned in the country’s 13th five-year plan as a strategically important technology on par with artificial intelligence. Dozens of local governments followed, piloting the technology for applications ranging from smart city initiatives to environmental protection. In October 2019, China tested the National Blockchain Service Network (BSN) known as the “Internet of Blockchains”, which was officially launched in April 2020.

BSN is well on its way to becoming the largest blockchain ecosystem in the world because of the size and strength of its supporters. In China, the BSN has the potential to lay the foundation for improved synergies between businesses and the public sector. The draw against BSN could also be decisive internationally. There are concerns that BSN is likely to be controlled and monitored by the Chinese government, but those concerns may be overlooked by organizations seeking closer access and integration with Chinese companies. On the other hand, the profit motive could be overcome by concerns about China’s influence, especially if a viable alternative global blockchain infrastructure is available.

Related: How digital stablecoins affect crypto in China: Experts are reacting

European Union

Efforts within the European Union to support blockchain initiatives have been proactive, similar to China, albeit on a smaller scale and slower. The EU Blockchain Observatory and Forum was founded in February 2018, which led to the formation of the European Blockchain Partnership (EBP). In 2019 EPB created the European Blockchain Services Infrastructure (EBSI), a distributed network of nodes across Europe. EBSI has seven specific use cases for government service development. The International Association for Trusted Blockchain Applications (INATBA) was founded to promote the public-private partnership. It brings together providers and users of blockchain solutions with representatives from government organizations and standardization bodies from around the world.

While Europe’s approach to supporting and promoting blockchain adoption on a smaller scale and at an earlier stage of development than China’s BSN, its commitment to openness, transparency and integration means that international organizations may be more willing to adopt developed frameworks.

Related: Europe is waiting for a regulatory framework for crypto assets to be implemented

diploma

Blockchain technologies are now replacing them as the basic infrastructure for forward-thinking governments. The technology has reached the highest national strategic importance, as demonstrated by the efforts of China and Europe to build a blockchain infrastructure. While it is impossible to predict exactly what the global blockchain infrastructure will look like, what is certain is that the technology is on the rise.

Matthew Van Niekerk is co-founder and CEO of SettleMint – a low-code platform for the development of enterprise blockchains – and Databroker – a decentralized marketplace for data. He holds a BA with Honors from the University of Western Ontario in Canada and an international MBA from Vlerick Business School in Belgium. Matthew has been working in fintech innovation since 2006.

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