Governments are mandated to provide fair and effective services to citizens. Regrettably, Providing transparency and accountability often leads to decreased efficiency and effectiveness, or vice versa. Governments are often forced to improve one at the expense of the other. Rarely, technology emerges that enables governments to improve justice and Efficiency.
The move from paper files to computer databases was one of those technologies. Internet was another. Blockchain is next. Like the internet Not only will blockchain improve the way the public interacts with government services, but it will have far-reaching economic and social implications..
How can the government use blockchain?
Blockchain will have far-reaching and multifaceted effects on government services. Here we examine some promising examples.
Identity is the cornerstone of interacting with public services, but current systems have many shortcomings. Let’s look at two of them. First, identity requires extensive and expensive infrastructure. While developed countries enjoy the benefits of a strong national ID, many developing countries find it difficult to provide a strong ID. The World Bank estimates that around 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 susceptible to a wide variety of frauds, including those related to land transfers, passports, credits, voting, and more.
Blockchain’s strengths are specifically geared towards mitigating the weaknesses mentioned above. The decentralized design of the blockchain makes its deployment and coordination much more cost-effective than centralized designs. Their trustworthy nature makes them more confident.
Public procurement represented 29% of government spending in OECD countries in 2013. The lack of fairness and transparency in the public procurement cycle opens the door to corruption. The OECD estimates that up to a third of investments in publicly financed construction projects can be lost to corruption.
Blockchain-based solutions have the potential to affect almost every aspect of the hiring cycle, such as major reforms related to transparency and stakeholder engagement.. This pilot project came to the conclusion that “despite the challenges, blockchain-based e-procurement systems offer unique advantages in terms of procedural transparency, permanent records and honest disclosure”.
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. Nevertheless, Paper-based systems suffer from cost, time and integrity problems. The voice set on paper, known as Direct Register Electronic Voting (DRE) machines have had mixed success. Brazil introduced the DRE in 1996, but security concerns remain. The DRE in the United States began in 2001; However, progress and adoption have slowed as incidents with DRE machines continue to occur.
As an even newer technology Blockchain is not yet ready to replace current voting systems, but it is strengthening existing systems. For example, our company, in collaboration with the University of Indonesia, has created an independent blockchain-based verification system to secure the results of the April 2019 elections in Indonesia on a paper basis. The project received 25 million votes within hours of polling stations closed. Instead, the official results were released weeks later.
Beyond government services
Governments experimenting with blockchain are starting to view it as an essential infrastructure. You are beginning to understand that Having a blockchain infrastructure is important to unleash economic activity. Governments seek to participate in the development of standards that will ultimately be adopted around the world. China and the European Union are two of those leaders, and both are developing blockchain initiatives.
Chinese leaders have been extremely proactive in supporting blockchain initiatives. In December 2016, blockchain was mentioned as a technology of strategic importance in the country’s 13th Five-Year Plan, as was Artificial Intelligence. Then dozens of local governments piloted the technology for applications ranging from smart city initiatives to environmental protection. In October 2019, China tested its Blockchain Services Network (BSN) nationwide, known as the “Internet of Blockchains” and officially launched in April 2020.
The BSN is poised to become the largest blockchain ecosystem in the world because of the size and power of its supporters. Within China, the BSN should form the basis for improved coordination between business and the public sector. Internationally, too, the attraction to BSN is likely to be considerable. There are fears that the BSN might be controlled and monitored by the Chinese government, but these concerns could be overlooked by organizations seeking closer access and integration with Chinese companies.. On the other hand, the profit motive can be outweighed by fear of Chinese influence, especially if a viable global blockchain infrastructure exists.
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 establishment of the European Blockchain Association (EBP). In 2019, the EPB created the European Blockchain Services Infrastructure (EBSI), a network of nodes distributed across Europe. EBSI has seven specific use cases for government service development. The International Association for Trusted Blockchain Applications (INATBA) was founded to promote public-private cooperation. It brings together providers and users of blockchain solutions with representatives from government organizations and standardization bodies from around the world.
Although the European approach to supporting and promoting blockchain adoption is to a lesser extent and at an earlier stage of progress than China’s BSN, its commitment to openness, transparency and inclusivity means that international organizations may be more willing to adopt developed frameworks.
Blockchain technologies take their place 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’s impossible to predict exactly what the global blockchain infrastructure will look like, the truth is that technology is on the rise.
The views, thoughts, and opinions expressed are the author alone and do not necessarily represent the views and opinions of Cointelegraph.
Matthew Van Niekerk is co-founder and CEO of SettleMint – a little code platform for the development of enterprise blockchains – and Databroker, a decentralized data marketplace. He holds a BA with Honors from the University of Western Ontario, Canada and an international MBA from Vlerick Business School, Belgium. Matthew has been innovating in financial technology since 2006.