The hype around Blockchain has exploded this year, as its potential begins to be realized. Author Melanie Swan summed up the benefits in ‘Blockchain: Blueprint for a New Economy’, writing that, ‘The Blockchain allows our smart devices to speak to each other better and faster’, something that is being recognized across the board - including by some of the world’s biggest banks. The applications are limitless, and as we move towards a decentralized future in which the power truly lies with the individual, it is going to be right at the heart of it.
Governments have long seen decentralized networks such as Bitcoin - which is built on Blockchain - as a threat to the status quo, leaving it to the libertarian cyberpunks who initially came up with it. However, they are finally beginning to acknowledge its many virtues as a resource, and its potential to decrease bureaucracy around the delivery of government services and the costs that come with it.
Hillary Clinton, for one, has been a major proponent of the technology, including Blockchain in her announcement for policy initiatives for technology and innovation, noting that it could ‘make government smarter and more effective.’ But while Clinton may have brought it into the public eye, there are already a number of government agencies in the US that are exploring adopting the technology. In Delaware, for example, Governor Jack Markell recently announced two Blockchain initiatives. One moves state archival records to an open distributed ledger, while the other allows a private company that incorporates in that state to keep track of all the equity issued and the different shareholder rights on the blockchain.
These are typical of how Blockchain can be utilized by government. Estonia has even used Blockchain to develop an e-residency program, whereby anyone in the world can apply to become an e-resident of Estonia. They receive a digital ID card with a cryptographic key they can use to sign digital documents securely, removing the need for ink signatures on official paperwork, they can open bank accounts with Estonia’s e-banking system, set up company in Estonia using the country’s online system, and using their e-services.
These initiatives are just the start. In the UK, every single public sector organization can now use Blockchain technology following the government’s decision to rubber stamp FinTech startup, Credits, as one of its approved suppliers. The UK government has already been testing Blockchain on a small scale to see how it can be utilized, developing a fully functioning app to help pay people’s welfare, and their willingness to roll out the technology across the public sector suggests that the trial was successful. The Chinese government too has created a Blockchain working group made up of government and blockchain firms - including Wanxiang Blockchain Labs, Ant Financial, Webank, Universal Holdings, Ping An Insurance and Micro Focus Bank - to accelerate and propel forward the development and adoption of Blockchain technology in the country.
In an age of low trust in government, it is vital that information is held in a transparent and accountable fashion where anyone can verify both the ledger and any copies of the data stored on non-government computers. Most public registries are maintained in government databases, and with these are far more securely held on Blockchain as it keeps track of and maintains an audit trail of information far superior to the systems currently in place. Public blockchains are a relatively new technology, and significant research and development is still required if they are to achieve their full potential. In the 1990s, President Bill Clinton and his Vice President Al Gore invested in the internet and regulated it in such a way that ensured America led the internet revolution. If the US is going to be equally dominant in Blockchain, internet 2.0, the ‘internet of value’, the next president, whether Hillary or Trump, is going to have to ensure that they do the same. Ultimately though, which nation leads the way is irrelevant, because Blockchain is returning power to the individual.