Blockchain Applications in Government

Blockchain Technology for Government

Blockchain Technology (also called Distributed Ledger Technology (DLT)) is a potential vehicle to improve government services and foster more transparent government-citizen relations. The distributed tech can work to dramatically optimize business processes through more efficient and secure data sharing.

Blockchain has numerous possible applications for the public sector. Through blockchain technology, governments can improve the way they deliver services, prevent tax fraud, eliminate bureaucracy, and reduce waste. Digital cash transactions can help reshape financial transactions between the government and its citizens.

The existing inefficient pen-and-paper way of doing things plagues the public sector and has made the hallmark of government offices: bureaucracy and corruption. Mistrust in government services to effectively problem solve and provide services to the population is a baseline for public perceptions. Blockchain creates a trustless environment for regulatory activity and works to combat slow, expensive multi-step processes that require several intermediaries. Sounds like government and blockchain are a match made in heaven.

Blockchain interventions in government practices have strong use cases for various departments from healthcare benefits to social security benefit distribution to improved document management and storage. Decentralized tech offers hope that governments can achieve more streamlined operations and pare down back-office operations. Blockchain could potentially alleviate populations worldwide from high taxation and smooth ruffled relationships, instilling trust through a new kind of technological infrastructure that is decentralized and autonomous. Unbiased technology is the next frontier of public sector management with blockchain as the vehicle for trustless web 3.0 solutions.

Centralized Government & Public Sector Operations

Centralized government functions have earned public services a bad name over the years. People often dread having to do anything involving government offices from the long lines and excruciating wait times at the DMV to the arduous process of filing taxes; citizens feel government offices are inefficient. The simplest tasks become elongated when bureaucracy is the only thing protecting us from fraud and security breaches.

Here are the main pain-points for government departments that contribute to the low public opinion:

• Opaque operations

Everything the government does seems to be shrouded in mystery, and perceptions of low accessibility to information and direct representation are only mounting. Citizens even have trouble accessing their personal information at times. People are forced to wait for annual reports to find out where their tax dollars have already been spent. There are no real-time updates to follow transactions or cash flow. The money seems to disappear into thin air. With a lack of transparency, there is a lack of accountability that follows. Federal bodies meet behind closed doors, and subjective news reports then trickle down to the public. Additionally, it is those in power who seems to dictate the flow of information.

• Slow and inefficient

Filing for benefits is a perfect example of a slow and inefficient process that damages government-citizen relations. Receiving benefits is a multi-step process that requires potential recipients to file at least three to four months in advance in the U.S. All government programs require people to collect personal documentation and mail in or submit it through online portals. Then the documents must pass human several verification processes and audits. Fund distribution also relies on snail mail and other ineffective forms of dispensation. Checks don’t always come on time and fraud is rampant.

• Privacy issues

“Big brother is watching.” While we might not know exactly where our money goes after we pay our taxes or what the government is doing, the government collects and stores our private information. Defense departments worldwide use existing technology to invade privacy in the name of security. Our cell phones are used as government surveillance tools. If the government had alternative means to collect the information they needed to provide adequate national security they would not need to infringe on citizens’ privacy.

• Widespread corruption

There is tax fraud, identity theft, falsified data and more within the government and its population. Corruption in developing countries is nearly guaranteed when it comes to local elections. Dishonesty is commonplace in political landscapes. Citizens have their own mixed bag of scams like tax evasion and in some more extreme cases staged death to collect social security. Corruption exists from the smallest local government offices up through federal presidential elections.

• Expensive and wasteful

With all the need for document verification, multi-step registrations, and the human hands needed to perform these duties, public sector service delivery is expensive and generally wasteful. If specific processes were abridged and simplified, billions could be saved annually. As the government becomes bigger and bigger and involves more and more actors, it becomes more difficult to track spending, and more waste is added as citizens reluctantly foot the bill.

Blockchain Government News

How Blockchain Works

 The blockchain is a digital ledger where digital asset transactions are recorded chronologically and publicly. It can also function to store and exchange information between parties via distributed peer-to-peer networks. Transaction verification is executed autonomously through cryptography and requires no third-party. Smart contracts can be written and live atop the blockchain. Smart contracts are event-based and can release funds or verify processes automatically upon being triggered by a pre-determined event. Some of the famed benefits of the technology are its chronological public ledger, trustless transactions, data storage potential, real-time results/analytics, and smart contract automation.

How Blockchain Can Improve Government & Public Sector Operations

Blockchain technology, in its most basic form, is designed to function as an asset management platform. Almost all government departments and services require transactions and basic asset management. As detailed above, the way the government currently handles asset management is outdated and ineffective. As we move away from paper-based practices blockchain can serve as the perfect platform to accommodate modern operational needs. The web 3.0 technology has the potential to revolutionize management ushering in new voting systems, new record storage, new tax portals, new healthcare delivery and more. It will also improve governments abilities to collaborate with other countries’ governments worldwide. As the private sector rises to the occasion to meet citizens’ expectations for speed, transparency, and trustless transactions governments are starting to discuss the possibilities and solutions blockchain could bring to their operations and governed populations.

Here are some of the main benefits of blockchain applications in government:

• Trustless Transactions & Interactions

An important feature of blockchain is its ability to facilitate transactions that aren’t predicated on trust and the need for paper-trails of verification. Blockchain-based citizen registration could create a blockchain I.D. that could then be used (even separate of personal identity) for fraud-free, real-time monetary transactions between governments and citizens via distributed ledger technology. When citizens share access to documents, and they will be stored securely on the blockchain and bolster personal privacy, interactions become trustless and require less bureaucratic paper-based verification making them additionally more affordable.

• Security

Governments are now a target for web hackers, and these hacks cost citizens’ their privacy and the government large sums of money. These security breaches are easily preventable thanks to improved blockchain data storage with ledger separation on a distributed network. This makes hacking worlds more difficult. Traditionally a hacker would only have to break into just one single server or cloud-based storage solution. Blockchain eliminates a single point of failure to enhance security.

• Immutable Record Storage

The government uses our data to make projections and predictions, plan budgets, and perform demographic analysis. The more secure and accurate a government’s data stores are the better the government can make decisions about the future. Immutability ensures that data is not being tampered with and therefore immutability also contributes to transparency and trust. We can trust that statistics are real because they are permanent and immutable. This improves identity and residency management, which is a huge global issue.

• Lower cost and improved efficiency

If we can verify and authenticate without third-parties on the blockchain and make updates in real-time, we can eliminate time and cost from government supply chains. With instant transactions and verifications, there is less need for personnel and the associated resources previously needed to perform tasks that could now be automated via smart contract.

• Transparency and corruption reduction

With immutability and publicly stored records, citizens could view the cash flow and transactions verified via blockchain. Public records would be more accurate and trustworthy. This kind of unfettered access to tamper-proof public ledgers and data would work to repair broken government-citizen trust. People would need to rely less on biased and unreliable news sources. Voting could also happen on-chain for improved transparency and corruption reduction.

Potential Verticals for Government Applications in Blockchain

Blockchain could be applied to nearly any public sector supply chain vertical. The benefits of decentralization in government aren’t just limited to administrative tasks it can help to make all of the following departments more efficient and affordable.

• Defense and Military
• Public Health
• Sanitation
• Agriculture
• Energy
• Housing
• Social welfare
• Justice
• Transportation
• Treasury
• Veteran Affairs
• Land Management

Use cases for Blockchain Applications in Government

Improved Taxation Processes

Blockchain has several use cases that could help streamline complex taxation protocols. It could potentially allow citizens to allocate their tax dollars themselves towards the programs they support, increasing and overall sense of democracy. Taxes could be held in smart contracts, and tax returns could be released automatically triggered by filing.

Reconciling Intragovernmental Transfers

When large sums of money are considered unreconciled funds in the federal budget the process of reconciling is unnecessarily lengthy and costly. It also prevents accurate future budget projects and makes things difficult to account for. These sometimes trillions of dollars could benefit from blockchain accounting systems that would offer immutable transaction ledgers that could allow for even automated reconciliation with a pre-programmed smart contract designed to reconcile transfers based on specific events.

E-residency Programs

Government IDs verified on the blockchain could help residents vote, file taxes, and perform other related citizenship processes in a more secure and streamlined fashion. Virtual residency authentication could help to immutable provide citizenship. All government transactions could be moved onto the blockchain using virtual e-residency identities to streamline all interactions between the government and citizens. For countries with universal healthcare, patient portals could be integrated, and everything from banking to medical prescriptions could be performed in one e-resident portal. Nearly one-sixth of the world’s population does not have documented proof of their existence. Blockchain could help establish identity for this one-sixth giving them access to education, banking, mobile communication, and more.

Reduce Voter Fraud

Blockchain could be the perfect solution (especially in developing nations with openly corrupt voting processes) to eliminate voter fraud. Votes made via blockchain could be stored on the public ledger anonymously with verifiable audit trails thanks to its innate immutable nature. Blockchain-based voting systems could help to repair trust between government and citizen.

Blockchain Identity

Blockchain-based identity management can help governments give citizens control of their information and allow them to decide who can access their data. This will make it easier to authenticate individuals and save the government effort in verifying identity. Thanks to the blockchain ledger’s immutable ledger, once the blockchain I.D. is created it will become a permanent and accurate record.

Courtroom Evidence Authentication

Blockchain can be used to authenticate evidence admissible in a courtroom. Through recognizing digital data and timestamps stored on the blockchain courtrooms can use hash value verification as proof in court. This can help improve the justice system and create trustless evidence sources to validate rulings without third-party bias.

Improved Healthcare Coverage Platforms

Blockchain-based healthcare platforms can improve coverage and health service delivery for low-income and the elderly while reducing overall costs. In countries with national public healthcare services, medical records can be integrated with all other blockchain identity records to create accurate, consolidated, and tamper-proof data stores. Updated healthcare records on the blockchain can help contribute to improved medical interventions thanks to real-time data analysis across hospital locations.

Shared Energy Sources

Public energy management via blockchain could help to reduce expenses while saving the environment. The blockchain is an ideal platform for energy sharing and automated distribution. Citizens can buy and sell their solar power on the blockchain to others in their neighborhood.

Government Record Storage

The blockchain offers more secure and tamper-proof storage for marriage certificates, divorce records, death documentation, passports, visa records, property titles, vehicle titles, and corporate registrations. The government performs an enormous amount of record management that could be made easier and more affordable if it was brought on-chain.

The Future of Blockchain Applications in Government

While governments and political structures might remain centralized in nature, there is room for decentralization through technology to bring more transparency to the public sector. Distributed Ledger Technology offers these improvements in government-citizen relations. Global economic competition is already forcing countries to start at least consider researching the potential for blockchain, while others nations have already launched national cryptocurrencies.

We will continue to see varying degrees of adoption globally on a government level. Whether it will stop political corruption or redistribute political power to the people, it will at the very least optimize notoriously bureaucratic and inefficient services saving everyone time and money. Preventing corruption and fraud without the need for third-party watchdog groups minimizes feelings of surveillance, that “big brother is watching,” and allows the automated verification technology to create trustless interactions instead.

The old way of doing things creates a maze of red tape around government departments that foster mistrust and dissatisfaction. If governments want to be able to deliver services on par with the private sector and early blockchain adopting nations, they will need to begin integration sooner rather than later.

Blockchain can help bring transparency, speed, security, privacy, immutability, and more to government practices in hundreds of use cases across departments. Those with national healthcare programs can work to integrate identity management with health record management to limit personal information sprawl that currently plagues citizens who are forced to reveal their private details in multiple locations on paper and online.

Blockchain could potentially bring tax relief and help to make governing and being governed a trustless dynamic. Building trust through decentralized technology is applicable across verticals and industries. Blockchain technology even in its infancy has so much to offer governments as a tool for improved operations full stop.