Blockchain technology continues to be the subject of intense interest and experimentation in all industries, particularly in government.
However, the endless enthusiasm for blockchain has subsided, replaced with a greater sense of realism informed by experience.
In 2018, two-thirds of governments were actively interested in blockchain, and 10% of governments were actually doing something with it. That picture changed in 2019.
“The cooling in the government space reflects a more reasoned and rational approach to blockchain,” says Rick Holgate, senior executive partner at Gartner. “The wave of executive-leadership-directed exploration, out of fascination or fear of missing out, has been replaced with more deliberate and informed experimentation.”
Government CIOs considering the use of blockchain should look beyond the hype to the incentives for participation and first determine if blockchain is necessary. “As with all IT projects, the focus should be on the desired business outcome rather than the technology,” says Holgate.
* Voting – Using blockchain for voting capabilities is of interest to many governments, although few have used the technology for elections at a national level. Various startups have conducted voting pilots and demonstrations in the US, Ukraine and Sierra Leone, among others. However, none have successfully demonstrated how to resolve the challenges of authenticating voters or resolving broader issues of voter fraud or voter intimidation.
* Digital asset markets – Governments have shown interest in facilitating and encouraging the trading of purely digital assets or digital representations of physical assets. It enables them to act as the market infrastructure provider for industries, especially in regulated areas such as insurance, utilities, healthcare, fishing, agriculture, mining and water rights.
* Humanitarian and social services – Delivering services more effectively to poorly documented populations in need has been a global motivator for many governments. Projects include: the UN World Food Programme; the UN Development Program; Finland’s refugee program; the City of Austin and its MyPass initiative, and New York City’s Department of Homeless Services.
* Efficiency plays – Efficiency-based initiatives are predicated on the idea that decentralised, multiparty transactions can be streamlined by using blockchain to facilitate resolution of transactions. Government interests are mostly motivated by a desire to reduce friction in disconnected processes, interactions or transactions — among a variety of government organisations or involving the broader public/private ecosystems.
* Cross-entity transactions – Decentralised applications, or dapps, are software applications that enable members of a peer-to-peer network to collaborate and transact. The US Food and Drug Administration has conducted pilots that allow clinical trial medical records to be securely and efficiently exchanged with hospitals in a transparent way. Some other examples of cross-entity transactions are around supply chain visibility of direct government interest for regulatory purposes, advancing customs processing, or better transparency over product origins and composition.
* Record keeping – Many governments have announced an intent to store and manage government records via blockchain. The US states of Vermont and Delaware, as well as the emirate of Dubai, have shown some of the most visible and ambitious efforts on the use of blockchain for government records.
* Self-sovereign records – Self-sovereign records give individuals greater control over their data by removing or reducing the ability of authorities to limit or impede user access. Empowered individuals (or even corporations) are able to collect, manage and selectively share identity information, for example. Testing for self-sovereign medical records has been funded by the Bill & Melinda Gates Foundation. It extends to individuals the ability to aggregate and manage their medical records from multiple sources.
* Complex data – The storage limitations in blockchain requires strategies for accommodating data-intensive transactions. Examples include medical records, intellectual property rights, large volumes of associated unstructured data and documents, and quite commonly, real property records. The Swedish Lantmäteriet has created a blockchain-based service for recording real estate transactions.
“Instead of getting caught up in the hype, take time to explore blockchain in a structured and objective way, seeking out the use cases that are most relevant to you,” Holgate says. “While many of the use cases are still nascent, they are the closest to demonstrating some level of maturity and offer government CIOs a tangible opportunity to start small and scale up.”