Blockchain will radically transform government services, and this is just the beginning...

Governments will not only use blockchain for basic services such as identity and voting but as a framework for economic growth. Governments are charged with providing fair and efficient services to people. Unfortunately, providing transparency and accountability often reduces efficiency and effectiveness, or vice versa.

Therefore, governments are often forced to choose to improve one at the expense of the other. In rare cases, technology comes along that enables governments to improve equity and efficiency. The move from paper record keeping to databases on computers was one such technology.

The Internet was another technology. Blockchain Like the Internet before it, blockchain will not only improve how the public interacts with government services, it will have wide-ranging economic and social impacts.

How can the government use blockchain?  

Blockchain will have a wide and diverse impact on government services. Here we explore some promising examples. Identity Identity is a cornerstone of interaction with government services, but current systems are flawed in many ways.

Let's look at two. First, identity requires extensive and expensive infrastructure. While developed countries enjoy the benefits of a strong national identity, many developing countries struggle to provide a strong identity.

The World Bank estimates that nearly 1 billion people do not have official proof of identity. Second, current identity systems are not secure. For example, India's biometric authentication number system, known as Aadhaar, is vulnerable to a wide range of fraud, including those involving transferring land ownership, purchasing passports, obtaining loans, casting votes and more.

Blockchain's strengths align remarkably well to mitigate the weaknesses mentioned above. The decentralized design of blockchain makes it much less expensive to deploy and coordinate than centralized designs. Its unreliable nature makes it more secure.

Procurement   Public procurement accounted for 29% of general government spending in OECD countries in 2013. Inequity and lack of transparency in the procurement cycle have opened the door to corruption.

The OECD estimates that up to a third of investment in publicly funded construction projects may 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 project established that despite the challenges, blockchain-based e-procurement systems offer unique advantages related to procedural transparency, permanent record-keeping, and honest disclosure.

Voting   Despite the advent of the digital age, paper voting is still the dominant method of voting. This is understandable given the importance of elections in the democratic process.

Paper-based systems still suffer from costs, time, and integrity issues. The alternative to paper voting, known as direct-record electronic (DRE) voting machines, has had mixed success. Brazil introduced DRE in 1996, but security concerns remain.

DRE began in America in 2001. However, the progress and adoption of DRE has slowed due to the continued occurrence of accidents with DRE machines. As a newer technology, blockchain is not yet ready to replace existing voting systems, but it already supports existing systems. For example, our company, in collaboration with the University of Indonesia, set up a blockchain-based independent verification system to secure the results of Indonesia's paper-based elections in April 2019.

The project was able to register 25 million votes within hours after the polls closed. In contrast to the speed of blockchain, official results were not announced until weeks later.

Beyond government services  

Governments experimenting with blockchain are starting to view it as essential infrastructure. They are beginning to understand that having a blockchain infrastructure is important for unleashing economic activity. Governments are keen to have a say in the development of standards that will eventually be adopted globally.

China and the European Union are two such leaders and are both developing blockchain business-enabling initiatives. China  Chinese leadership has been very proactive in its support of blockchain initiatives.

In December 2016, blockchain was mentioned in the country's 13th Five-Year Plan as a technology of strategic importance on par with artificial intelligence. This was followed by dozens of local administrations implementing pilot projects using technology for applications ranging from smart city initiatives to environmental protection. In October 2019, China tested a nationwide Blockchain Services Network (BSN), described as the “Blockchain Internet,” which it officially launched in April 2020.

Given the size and strength of its backers, BSN is poised to become the largest blockchain-enabled business system in the world. Within China, BSNs are likely to form the basis for improved coordination between businesses and the public sector. Even internationally, the pull toward a BSN is likely to be significant.

There are concerns that BSN is being controlled and monitored by the Chinese government, but such concerns may be overlooked by organizations seeking close access to and investment with Chinese businesses. On the other hand, the profit motive may be overridden by fears of Chinese influence, especially if there is a viable alternative global blockchain infrastructure.

European Union  

Efforts within the European Union to support blockchain initiatives have been proactive in similar ways to those in China, although on a smaller scale and progressing at a slower rate. The European Union Blockchain Observatory and Forum was formed in February 2018, leading to the formation of the European Blockchain Partnership (EBP). In 2019, the EPB created the European Blockchain Services Infrastructur (EBSI), a network of nodes distributed across Europe.

EBSI has seven specific use cases for developing government services. To enhance cooperation between the public and private sectors, the International Association for Trusted Blockchain Applications (INATBA) was formed.

It brings together suppliers and users of blockchain solutions with representatives of government organizations and standard-setting bodies from around the world. While Europe's approach to supporting and encouraging blockchain adoption is on a smaller scale and at an earlier stage of progress compared to China's BSN, its commitment to openness, transparency and inclusion means that international organizations may feel more willing to adopt the frameworks developed.

conclusion  

Blockchain technologies are now taking their place as essential infrastructure for forward-thinking governments. The technology has reached the highest levels of national strategic importance, as evidenced by China and Europe's efforts to build blockchain infrastructure. While it is impossible to predict exactly what form global blockchain infrastructure will take, one thing is certain: it is an increasingly widespread and important technology.

The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph. Matthew Van Niekerk is co-founder and CEO of SettleMint – a low-code platform for enterprise blockchain development – ​​and Databroker – a decentralized data marketplace. He holds a Bachelor's degree with honors from the University of Western Ontario in Canada, and an MBA in International Business from Vlereck Business School in Belgium.

Matthew has been working in fintech innovation since 2006. Source