The emergence of blockchain technology, as the promise of the foundation for the next-generation global commerce infrastructure for frictionless transactions has resulted in numerous countries placing greater emphasis on investing and innovating in this space.
Governments from several nations have developed mission and vision statements regarding distributed ledger technology and have taken steps to reduce or remove regulatory hurdles for their technology industries.
Strong trade agreement exists around the belief that blockchain technology are the vanguard of the “Next Internet” economy. It is imperative that the government and blockchain work along to continue and strengthen technological and market leadership during this new space and to deal with potential policy and regulative incompatibility that may constrain the growth of the emerging digital-blockchain economy.
Risks and Challenges:
- Early Stage:
Blockchain is in its initial stage and is still evolving and improving for enterprise use. There is no prior implementation of the technology for large scale multi-department government blockchain applications. The technology is yet to prove its ability to handle multi-layered, multi-disciplinary and large volume transactions.
As the technology is conceived to facilitate multi-party collaboration on one single platform, the implementation process involving all the stakeholders/decision-makers is complex, slow and costly. Any breach in the ledger data or any vulnerability in the smart contract has running on the blockchain has the potential to impact all participating entities as the committed blocks are interconnected.
Technology know-how and experts in this field to develop and maintain the blockchain applications are still limited. Regulatory and legal environments are still under development and as such
areopen for interpretation. A lack of real-world enterprise testing and the rapid development of Blockchain platforms make it difficult to stay ahead of the curve.
- Contractual Risk:
There will likely be multiple service level agreements between the administrator of the network and various nodes and between the nodes, requiring a stringent compliance policy.
The consensus protocol requires that all contributors in the network can view and have a copy of the committed transactions in the ledger. While a
permissionednetwork does not reveal all data to all participants, certain metadata will always be available to network participants.
Blockchain in Government – Use Cases
In Estonia, the government is rolling out a technology named Keyless Signature Infrastructure (KSI) to safeguard all information. Electronic health records of all Estonian citizens are managed using KSI technology.
KSI creates hash values that represent
largerquantity of information as much smaller distinctive values. KSI allows officials to monitor changes within databases — who changes a record, what changes are implemented and when are they made, hence, any unauthorized tampering of the records can be detected and prevented.
- Asset Registry:
Another often-used application of
the blockchaintechnology is in maintaining asset registers, e.g. property, vehicle and other documents such as contracts. In recent times, given the propensity for fraud in property transactions, property or land registration using blockchain has come into prominence.
It does not solely provide a sure mechanism of storing and transferring information but also provides transparency across the system. Several countries and states like Sweden, Ghana
andGeorgia in USAare exploring blockchain-based solutions for digitizing registration of land and property transactions.
Voting, another critical and legitimacy granting public operate, has been the source of much activity among those working with blockchain. Citizens can cast votes the same way they initiate other secure transactions and validate that their votes were cast or even verify the election results.
The Digital India campaign launched by the Government of India in 2015 is also focused on digital empowerment of citizens through a combination of building digital infrastructure, providing digital services and implementing e-governance in an accessible manner and using technology as a driver of change.
The NITI Aayog is working on building the country’s largest blockchain network — IndiaChain, in a bid to reduce frauds, speed up enforcement of contracts and increase the transparency of transactions.
Given blockchain technology’s broad applicability and transformative potential, policymakers may find it worthwhile to explore the range of possibilities available within their respective departments. A blockchain-based approach might increase the efficiency of the
However, to unlock the complete potential of this technology, the government will need to work as a facilitator, by providing an enabling environment