There’s lots of hype surrounding blockchain, but at the root, it’s a simple concept. Instead of one centralized authority having a ledger of transactions, everyone holds the ledger, and when a new transaction happens, everyone’s ledger is updated. Transactions are recorded on the ledger only if both ledgers match exactly. For governments, this can have implications well beyond cryptocurrency.
5 Use Cases for Blockchain in Government
Here are five likely use cases for blockchain technology in government applications.
1. Increased Transparency
Every government consists of its voters and is accountable to them. Blockchain creates a concise “chain of custody” on a document that can be publicly distributed either directly to voters. Or to monitoring agencies and other non-governmental groups. It can be made part of document requests and allow governments to build trust by demonstrating open and clear processes, which are updated in real-time. For example, in Brazil, to counteract corruption, blockchain has been instituted in the bidding process of one state.
2. Improved Document Control
One of the fundamental questions for any government is ensuring documents are properly created, reviewed, distributed, and, if necessary, revised in a timely manner and in the correct way. This can be a challenge for even an efficient and well-staffed bureaucracy. Blockchain creates a method to track a document, from creation right down to issuance, ensuring the proper workflows are followed and sign-off by the correct stakeholders has been achieved. This limits frustration on the part of citizens and workers alike, as demonstrated by Estonia, which uses the technology for sensitive documents and was experimenting with it before the term “blockchain” had been coined.
3. Smarter Contracts
One of the most intriguing tools from the blockchain industry is “smart contracts,” essentially legal contracts that are written in computer code instead of legal code. They’re fully vetted by counsel before being issued, but once issued and signed, they’re implemented automatically. In the Isle of Man, for example, state lottery tickets are smart contracts. Once bought, the money is automatically deducted, the numbers are issued, and if you hit the jackpot, they’re paid out instantly. It’s a simple way to speed up routine contracts and financial arrangements.
4. Tracking Titles And Registrations
One of the most common legal disputes in any country is over who owns a parcel of land, and where that parcel is, precisely. Putting land purchases and other legal documentation into a blockchain system makes it clear who owns what and when they owned it. Some caution needs to be taken when translating paper documents to a blockchain, as by design they can’t be “revised,” but it’s already been shown to be a useful tool for settling disputes and preventing fraud.
5. Improved Cargo Tracking
Smuggling, counterfeiting, and fraud are rising challenges in a world where logos can be copied off the internet and the provenance of everything from seafood to fine art can be forged with the right stamp. Various countries are experimenting with blockchain tools to create chains of custody on products. While these are still in the experimental stages, they’re showing promise in solving a thorny issue in international relations.
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