The blockchain is the fundamental backbone of cryptocurrencies, one that is radically changing the financial system for the better. But blockchain tech is not just for digital assets. On the contrary, it can benefit a number of industries .
Several blockchain startups have begun to crop up, each of them promising to greatly improve the way we bank, shop, share knowledge , hire employees or do business . But there is plenty of evidence to suggest that blockchains will completely reinvent the public sector.
The distributed ledger technology can be harnessed by government agencies in several areas, all of which we’ll take a good look at right here.
Blockchain for Value Creation
In Don and Alex Tapscott’s Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World (Penguin/Random House), they predict blockchain will bring us “the Internet of value.”
The security, speed and dependability of the blockchain are perfectly suited to public sector organizations. Blockchains can be implemented for infrastructure (water supply, sewers, power grids) in much the same way it has been implemented for farming and crop insurance .
Cryptocurrency in the blockchain alters the concept of revenues since accounting for revenues gets convoluted with receiving a “right” instead of seeing actual fiat revenues. Consequently, new movement options for value creation are produced. This takes things one step further than traditional currencies would allow.
In this way, the blockchain makes a new flow of value possible. This is tangentially related to Nobel laureate Michael Spence’s concept of digital technologies and how they will create an evolution of global value chains.
To put it another way, valuation and cost will continue to transform because of the way in which the blockchain functions.
This will prove out to be of great value as a basis for government service provision and procurement. Agencies can utilize blockchain to funnel their budget into multiple sectors and evaluate data related to those sectors.
More than 12 countries have already begun trials to determine exactly how blockchain tech could benefit them. For instance, the United Arab Emirates are considering a variety of blockchain use cases, such as central bank operations and business registration.
Blockchain for Public Transit
Blockchain technology could be applied to public transit by providing a faster payment system. As a result, boarding time could be limited and travel rates could be reduced.
As we saw with MasterCard’s new mobile payment platform, commuters will flock to these expedient, alternative payment models. If 100,000 commuters signed up for MasterCard’s mobile payment system, public transportation is undoubtedly a viable use case for blockchain.
As a decentralized technology, blockchain can give users more autonomy when it comes to transit transactions. If it is made readily available for this purpose, it will give commuters back some of the privacy that credit cards, banking institutions and, indeed, the government have taken away from us throughout the years.
Decentralized applications will enable us to travel throughout our respective country discreetly and securely. What’s more, the problem of street crime will no longer be a concern.
Blockchain will likely eliminate this problem since thieves will not expect to gain purchase to your money if your money is not in a physical wallet or purse.
Blockchain for Voting
In Estonia, a country known for the value it places on new and emerging technologies, the blockchain is being piloted for voting. Follow My Vote is one such platform, a blockchain-based solution that bills itself as “the online voting platform of the future.”
The folks behind it believe that it will drastically reduce the overbearing cost of our elections and free taxpayer money up to be spent on more important aspects of our society, including the educational system and the aforementioned infrastructure.
Blockchain can be used to enhance our ability to secure and validate the voting process. As if voting didn’t have enough problems in the US, in many countries it is rife without outright fraud. In the absence of access to privacy-enabling tools , blockchain technology can effectively eliminate any possibility of an election official tampering with a person’s vote.
Blockchain for Records & Registration
As we can see from this report by Moody’s Investors Service, record management is among the top government use cases for blockchain. And the reason is quite simple. Documentation can be handled in the same way that funds and transactions are handled in the blockchain.
Corporate registration, entitlements management, identity management, land registration and supply chain traceability are but a few of the use cases that could benefit the public sector.
Blockchain’s immutability ensures that no files can ever be erased once they’ve been created. In this way, the distributed ledger can optimize the way we secure and authenticate intellectual property at a lower cost and greater efficiency than traditional methods.
This may seem disheartening to clerical workers and other administrative staffers who would see blockchain as a threat to their employment, but blockchain wouldn’t put them out of a job.
In theory, blockchain would simply make government employees’ lives easier. No longer would record management necessitate there showing up to an office to work a specific set of hours. Instead, they would use the blockchain to manage their records online. And gone would be the stress of worrying about mislabeled or mislaid files because the blockchain would provide a structured, incorruptible platform for record keeping.
Power Grid & Energy Optimization
Another public sector use case is energy optimization. The Blockchain will facilitate consumption monitoring, control and optimization in the home. The Energy Controls and Applications Lab at UC Berkeley has explored blockchain’s potential for decentralized optimization of energy resources in microgrid networks and their findings are promising.
As a libertarian, I value the notion of individuals self-governing. As such, UC Berkeley’s report presents an exciting paradigm for peer-to-peer energy markets. By using smart contracts and blockchain tech, we can attain security and transparency while reducing our energy bill.
Microgrids would be able to function autonomously and could operate in a self-sufficient mode.
What is Blockchain? Understanding Blockchain
All government leaders—whether a chief information officer, a nontechnical leader or a chief technology officer—should familiarize themselves with the fundamentals of blockchain. I trust that the information above has served as a solid primer on how blockchain can be implemented and how it will serve the public sector well.
For those who are just learning about blockchain, it is a growing list of records (or “blocks”) that are linked and secured using cryptography. Three technologies are combined to create a blockchain—private key cryptography, a distributed network and an incentive to service the network’s transactions, record-keeping and security.
When a block is verified by to be “true and trustworthy” by the consensus protocol, it is posted to each user’s copy of the distributed ledger.
Final Thoughts—Why We Should be Excited About Blockchain
Governments that are testing blockchain out acknowledge the innate advantage of being the first to an emerging area. As we continue to educate ourselves about how to utilize blockchain tech, we will see great changes to our daily lives, ones that will eliminate that which is unnecessary while advancing that which is.