Government of the people, by the people, for the people:
Can blockchain help in realising this immortal dream of Abraham Lincoln?
“….government of the people, by the people, for the people”: Abraham Lincoln had uttered these immortal words during his Gettysburg address in 1863. More than one-and-half centuries later, we are far from realizing these lofty ideals. The success of national, provincial, and local governments is crucial for society to prosper by using just and fair means. Governments haven’t quite achieved this success yet. Apart from overhauling their policies, procedures, and methods, many governments are exploring technology solutions to deliver services effectively to citizens. They are exploring blockchain too. In this article, we talk about blockchain use cases for governments.
Challenges plaguing the governments
Do you read newspapers, watch TV news, or consume news online? You will easily come across numerous examples of the below-par performance of national, provincial, or local governments. Many challenges impact the performance of governments, e.g.:
• Inefficient processes involving extensive paperwork;
• Below-par management;
• Delay in decision-making;
• Lack of innovations;
• Political interference;
• Lack of transparency;
• Mismatches between resource requirements and allocation.
Society needs to address several of these challenges, e.g., political interference, and corruption. However, technology can play a key supporting role. E.g., technology can improve transparency, which deters corrupt practices. Technology can also improve processes.
Why blockchain can be important in the government sector
A relatively new technology, blockchain offers the following:
Decentralization: Blockchain is a P2P (peer-to-peer) network of computers. It doesn’t have a central administrator. “Nodes”, i.e., Computers in this network communicate with each other without intermediaries, which fosters decentralization.
Transparency: Public blockchain networks like Bitcoin are open to all. Any participant in this network can see all transactions. While enterprise blockchains limit entry to trusted parties, participants can view all transactions.
Efficiency: Blockchain is a distributed ledger, where all nodes have the entire data. This makes it easier to share information. Furthermore, blockchain smart contracts make contract administration more efficient.
Security: Features like digital signature and data encryption help users secure their transactions.
Immutability: Features like consensus algorithms and cryptographic hash functions prevent anyone from tampering with existing records. The addition of new records requires rigorous consensus processes and mathematical verification.
These characteristics of blockchain can improve transparency and efficiency in the government sector.
Not surprisingly, observers project that governments will increasingly embrace blockchain. A MarketsandMarkets report estimates that the global blockchain government market will grow from $104.5 million in 2017 to $3.4588 billion in 2023. That’s an impressive CAGR of 84.5% during the 2018-2023 period.
Blockchain use cases in the government sector
The key blockchain use cases in the government sector are as follows:
Improving farmers’ access to markets:
Many countries have considerable agrarian economies. Farmers need to improve their income. This can often be hard in a sector like agriculture, therefore, governments need to support farmers. In many cases, governments need to enable farmers to access wider markets.
Residing in rural areas that are often remote, farmers often find it hard to access new marketplaces. Robust digital infrastructure can help. However, governments in large countries with a considerable rural population often find it hard to extend this digital infrastructure. This adversely impacts farmers’ access to global agriculture markets.
The Union Government of India (GoI) has identified blockchain as a potential solution to this. GoI has partnered with Agri10x, an India-based AI and blockchain start-up. Agri10x has a blockchain-based global market for agriculture produce.
GoI has a wide network of CSCs (Common Service Centers). CSCs are access points for the GoI to deliver e-services to citizens, and they are especially useful in rural areas. Thanks to the partnership with GoI, Agri10x can now access CSCs. This helps them to enable Indian farmers to access their marketplace.
Protecting IPR “Intellectual Property Rights”:
Innovators routinely contend with the risk of their products getting copied. Recent decades saw many countries entering the manufacturing sector. Some of these countries don’t have stringent IPR laws, and some of them don’t implement these laws effectively. This increased the risk of counterfeit goods considerably.
Government agencies trying to protect the IPR of innovators have their tasks cut out. They need to communicate with multiple stakeholders like manufacturers, retailers, IPR-owners, importers, and distributors.
Testing imported products prove to be an especially challenging task. Government agencies need easy and secure access to all relevant documents. They must prevent tampering with these documents. Government agencies must have secure communication with all relevant stakeholders during the testing.
The U.S. Customs and Border Protection (CBP) recently completed a PoC (proof of concepts) of a blockchain-based system for testing imports. They found that the blockchain platform in question enabled secure communication between all stakeholders. The platform ensured data integrity.
Managing the government-issued identity documents efficiently:
National and state governments issue identity documents to citizens. Citizens need these government-issued identity documents to avail of services provided by governments, therefore, these documents are important. Multiple challenges exist concerning these identity documents, e.g.:
• These are often physical identity documents, and people might lose them. Getting replacement identity documents takes time.
• Multiple government departments might issue different identity documents. They work in silos, therefore, they take a long time to issue these documents.
• The processes of collecting data about citizens, managing it, and issuing identity documents are inefficient. Questions about data integrity remain.
• Government agencies often don’t have the necessary digital infrastructure to manage digital identity documents effectively.
Blockchain can help. One government agency can collect the relevant information about citizens. It can store them securely on the blockchain after verification. Malicious players can’t tamper with this data, therefore, other government agencies can trust this data. Government agencies can issue identity documents easily. They can also transition to a digital identity management system relatively easily.
In 2017, the local government of Zug in Switzerland implemented a government-issued identity management project. It used uPort, a decentralized identity platform that uses the Ethereum blockchain.
Residents of Zug used the uPort ID app from the Apple App Store. They visited the relevant government website. They applied for a Zug ID with the relevant information. After a verification process, they received their digital identity. They could access government services by using the Zug ID.
Maintaining land registration documents on the blockchain:
Historically, land registration processes involved extensive paperwork. Title deeds are paper-based. This presents multiple problems, e.g.:
• Landowners might lose title deeds. It becomes hard for them to prove ownership of the land.
• Government departments responsible for land registration have paperwork-intensive processes. Transactions take a lot of time.
• Paper-based title deeds can be manipulated easily. This opens up possibilities of large-scale corruption. Corrupt parties often collude with government officials, which erodes the trust in the system.
Blockchain-based land registration systems can change this. Landowners can digitally record the ownership of land on a blockchain platform with the appropriate evidence. Relevant government officials can review and validate them. The record is immutable, therefore, corrupt parties can’t tamper with it.
Future transactions become easier due to this blockchain platform. Countries like Sweden, Ukraine, and Georgia are already using blockchain for land registration.
The success of governments is crucial for nations and communities, however, governments face numerous challenges. Blockchain can help to overcome some of them. We reviewed key blockchain use cases in the government sector. Watch this space for more valuable insights on GovTech.