How countries around the globe are adopting blockchain for government administration
Blockchain is seen as an important development.
Some compare it important to the introduction of the internet. The internet is a global network that we use to exchange information, it is less suitable for the exchange of value.
For eg. when someone sends a file, they are actually sharing a copy of it via the internet. Both the sender and recipient have the same file. For information, this is okay. But if you want to send someone money or the proof of ownership of your car, it can create challenges.
This is what Blockchain can solve. It makes digitally sharing & transferring value- a real possibility.
What is this Blockchain Revolution?
“Blockchain is a distributed database that maintains a continuously growing list of records called blocks.”
By design, Blockchains are inherently resistant to modifications of the data. Once recorded, the data in the block cannot be altered retroactively. This makes it almost impossible to commit fraud.
The distribution of records across the network makes the system very robust. After all, there is no central database that can be taken down.
It is expected that Blockchain will have a profound impact on our economy, trade, and government.
The use of Blockchain could potentially create a real network society.
Originally, the first cryptocurrency Bitcon introduced the technology of Blockchain and eventually it was caught up by other players like Ripple, Stellar, Openchain, Hyperledger, Multichain, and Ethereum.
These next-Gen blockchains differ from the original Bitcoin Blockchain as they are developed to support a variety of applications.
Universities in the financial sector are working hard to create new blockchains that need to be more efficient, durable, and more scalable than the current blockchains.
The first private blockchains have been developed such as Hyperledger and Multichain. They aim to improve collaboration amongst parties in complex processes.
With the aim to deliver maximum governance to the citizens, government departments must digitally transform themselves from an intra-departmental as well as inter-departmental perspective. This requires active engagement amongst stakeholders such as ministries & departments, private players & members of the public.
Almost every government department faces typical challenges working in secluded groups, which gradually leads to a multiplicity of processes across various departments.
Different departments and affiliates run on disparate & disjoint technology systems leading to potential data integrity & data consistency concern.
Thus, it becomes highly important to aggregate multiple digital identities accorded to citizens in each department thereby making cross-referencing easier.
This is exactly what Blockchain does. Hence, the government should use this emerging technology.
Moreover, with the use of Blockchain in government, all its departments can attain the following benefits from implementing Blockchain use-cases in the public-sector and state-affairs.
Transparency and Trust Factor
Citizens do not trust the governing bodies. A study found that the percentage of trust put by Americans in its government is only 18%.
This happens mostly because people are not aware of how the government is taking decisions and based on which factors.
Blockchain in public-sector removes this barrier of mistrust and secrecy by distributing the central governing body into a distributed network which ensures the public’s trust in the system. This decentralization allows the participating members to see and verify data.
Personal data has always been on alerting risks in the unique identity cards saved with the government. Birthdates, addresses, driver’s license numbers, etc have been open to public records many times in the past leaving such data vulnerable to breach attacks.
Such instances can be avoided or mitigated with the use of Blockchain as the blocks are prone to intervention or theft attacks. Once data is fed into the blockchain data structures, it can never be altered and deleted. Hence, the government finds blockchain use-cases super important for its citizens’ data security.
Automation & Efficiency
Blockchain technology eliminates the middlemen from the government processes and thus making the system automated.
This saves the system from human errors and the time consumed by layers of hierarchical approvals, thus increasing the efficiency of important government tasks.
Corrupt government officers are found in every department of the public service. When things are tedious and consume huge amounts of effort and time, people tend to bribe such officials so that there work is done.
The Government is undertaking constant trials to dump out such unethical personals but however, they seem to find a secure nest under the protection of some higher post- corrupt government heads.
But not anymore, as Blockchain is terminating the mediator links from the systems, the government is widely accepting it to stay away from the stains of such misbehaviors of employees.
Cost Cutting Measure
Governments majorly have to undertake their responsibilities keeping pace with the scare resources allotted to them. Also, they need to pay salaries to the government employees even if they are not of much help.
Here, the introduction of Blockchain technology in the governmental sectors has reduced the manpower needed and thus the government now has to pay salaries to a very less number of employees.
Blockchain is the secret ingredient for the success of FinTech Startups
You can say use of Blockchain in fintech app gives an unfair advantage to that startup over their competitors in the fintech industry
Real-World Examples of Blockchain in Government departments across the World
Dubai has announced to become the first Blockchain-powered Smart city by 2020 by adopting the technology in every domain be it finance, education, government, banking, etc. The country has gauged the potential of this compelling technology and wants to utilize it to its utmost capability.
Fotochain– The Dubai government is using Blockchain to go paperless by recording all the important legal documents digitally like visas, bill payments, license renewals, etc. DubaiPay– for making all the financial transactions digital. Smart City University– a decentralized Blockchain learning platform.
The Singaporean government has implemented Blockchain technology in the banking industry for inter-bank and cross-currency payment transactions with Canada and Europe. It is named as the Project Ubin. It is used for clearance and settlements of payments and securities. The Project Ubin is supported by the Monetary Authority of Singapore (MAS), the Bank of Canada (BoC), and the Bank of England (BoE).
Though India is still hesitant to use cryptocurrency, it is opening arms for the technology behind it- Blockchain. Maharashtra, a south-western state of India is planning to use this technology in motor vehicle registration, land records, financial inclusions, and supply chain financing. The state has already found the Proof of Concepts (POC) for the verification of this technology and is assured about its security and reliability. The four conclusions of the Blockchain concepts as declared by the state government are in organ transplants, rationing, land records, and digital certifications.
The European Commission and the European Union Intellectual Property Office(EUIPO) have investigated and found that the Blockchain technology can be used for anti-counterfeiting solutions. They are looking forward to producing and putting into practice such a Blockchain-based app or solution.
Official Opening Video of EU Blockathon 2018
They had conducted a competition in 2018 called the ‘Blockathon’ where coders participated and were supported by lawyers, IP, and anti-counterfeiting specialists. In this competition, a team created a ‘virtual twin’ built on Blockchain that won the prize, and this solution helped the consumers verify a product before they actually receive it.
Brooklyn is using Blockchain to decentralize the fundamental energy resource of electricity via tokenization such that in catastrophic situations, the entire city or region does not have to suffer power loss because of a central power grid failure. This microgrid technology is striving communities to move towards a self-sufficient energy future. Since the past few years, power grid stations have been a treat to hacking which can pose national as well as global security threats. A block of houses in Brooklyn is hosting solar panels in a row over their house roofs that are creating utilizing, and sharing electrical power transactions as much needed, whenever needed with the neighbors.
The city of Zug in Switzerland (aka Switzerland’s Crypto Velly) uses Blockchain technology for digital identities to ensure data security, improving efficiency, and voting accessibility. A blockchain-enabled portal, uPort has been made that generates a unique digital ID for a citizen. This ID is used for voting, renting bikes, and many other integral public service works.
Estonia- The most technologically advanced government
Estonia had started experimenting the Blockchain technology since 2008, even before Bitcoin termed this technology as ‘Blockchain‘. It has launched the e-Estonia project that connects all the government services like the judiciary, healthcare, security, and commercial code registries to store sensitive data on the Blockchain ledger in a single digital platform.
The Liberal Alliance party in Denmark is supporting Blockchain use cases since 2014, and it has enabled electronic (e-) voting systems using the technology for the welfare of the public. Blockchain in government provides a secure and verified platform for internal party decision-making and also for national elections. The people can also increase their access to voting owing to the technology.
Korea, owing to its open and early acceptance towards technology, has welcomed the technology in various fields such as tax laws, education, military acquisitions, administration, and payments. South Korea’s government is taking help from Samsung to use and implement Blockchain powers in public safety and transport.
The government of the UK is also giving a trial to the Blockchain tech and investing in a digital ledger platform that helps the public sector to securely verify authenticate IDs and transactions. A secret project with the name Govcoin has been taken up by the UK government that is using Blockchain use case to remove redundancies.
Venezuelans are the world’s first federal government to issue digital currency- Petro, to retrieve the country’s collapsing economy. Looking to the nation’s hyperinflation, many of its citizens have converted their savings into cryptocurrencies.
The Republic of Georgia
The government of Georgia is using Blockchain for land ownership registries. They wanted to convert the archaic system of ownership and verification into a modernized manner. The blockchain Bitfury has by now recorded over 100,000 land titles in its records, which makes it the biggest blockchain ledger used by the government to date.
The Chilean government has started investigating in the Blockchain technology and has announced a pilot project plan to test data entry and storage in the energy sector. Owing to their mining industry, and large produce of Copper, they now want to start their own electricity production with the help of Blockchain in government departments.
Delaware, the business mix hub since the last 20 years is using Blockchain at its utmost scale.
The government of Delaware has developed a blockchain with IBM built on Hyperledger, to allow businesses to register and transact over through the Blockchain.
This way, the world has welcomed Blockchain with wide arms and beyond any doubts, this reviving technology is going to set the course for a long time ahead in the future.
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Areas where the Government can adopt Blockchain Use Cases
As we overlooked the efforts of various governments worldwide with Blockchain technology in the public sector, here is a summed-up list of the areas where the proven use cases of Blockchain can be adopted for the welfare of the citizens.
To overcome the frauds prevailing in the political undertakings of any nation- be it indirect democracy or direct democracy, Blockchain in government is the robust solution to fight against it.
The wars in the cities, communal riots, and chaos can all be interrupted if only the people of the state can vote bluntly without any threat, danger or risk.
Blockchain has proven its own worth for this particular e-voting use case, where after casting a vote, it can never be changed or deleted.
Hence, no political party can alter the results of a Blockchain empowered voting system, however powerful they ought to be.
With the national governments issuing a cryptocurrency, many of the state affairs turn out to be transparent and highly secure.
The citizens can easily trace where their money is going and the government is not held accountable in case of fraud or theft as the currency will be decentralized.
The advantages of having a nation’s own cryptocurrency are in the form of profit and investment. The government can have greater oversight and control over the public’s finances, increase the potential to monitor criminality, easy taxation, lower the costs of printing physical money, and an escape from inflation of currencies.
Border and Custom Patrols
Import, export, terrorism, and other threats that a nation’s border is awaiting can be stopped if all the border and customs processes are recorded on the Blockchain.
No tempering could be possible, making the flow of goods coming in the country and exporting from the country very transparent and secure.
Secure Government Data Records
The issue of theft and misplacement can be solved by the Blockchain technology where the government records can not be forged, edited, or deleted for any type of fraudulent activity.
The important, private and sensitive data records like passports, visas, birth certificates, driving licenses, etc can be saved by the government using Blockchain so that hackers can not play fraud.
To Counter Corruption
The public sector has always been troubled and fed up with the corrupt government officials who pose dominance over the innocent and needy citizens.
They incur higher fees under the table so accomplish the tasks that may even lie in their job duties to weigh their pockets.
The biggest benefit of using blockchain is the elimination of the middleman from the processes. And thankfully, this technology is in favor of the state and citizens’ welfare so it doesn’t charge undue bribes.
By tracking the country’s funds and transactions allotted for each sector in the annual budget, overspending can be altered.
The government can all the time track where the tax paid by the citizens is used, keeping no room for bribes or black-money.
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