Blockchain and efficient government
Making services to all citizens reliable, convenient and secure is not as hard as it sounds.
Whenever we talk about blockchain, the applications are usually limited to the private sector. It makes sense: the most famous example of blockchain technology is bitcoin, which many governments oppose.
Yet blockchain could change the public sector just as much or even more than it could the private sector. The potential number of uses for blockchain in government is enormous and the number of applications governments around the world currently use it for would surprise you.
Eugene McCarthy, a former US senator, once said: “The only thing that saves us from the bureaucracy is inefficiency. An efficient bureaucracy is the greatest threat to liberty.” If you’ve ever attempted to get a driver’s licence, you know this first-hand. But thanks to blockchain, bureaucracy is about to get much more efficient.
To see how it’s working, the best place to go is Estonia, a small European nation with fewer than 2 million inhabitants. Nearly all of its government services are online, 24/7. Citizens can file taxes or register their cars online. Information from healthcare, the judiciary or events that are required to be reported to the government are all tied together on the blockchain for each citizen.
Because of the security of blockchain, each individual citizen owns all their information and not a single other person can access it. Estonia estimates that 7% of its GDP is directly or indirectly derived from the system. It is so successful the US Department of Defense, NATO and the EU Information Systems have purchased Estonian technology.
Essentially, every resident of Estonia has all their information on the blockchain. It is in the best interest of every other country to do the same, as the efficiency would be astounding. All your ID cards could be on blockchain, so if you don’t have your driver’s licence and are pulled over by the police, they could simply look you up.
Criminal records could also be tied to the blockchain, so it would be easier for companies to screen out unsuitable job applicants. The entire notarisation industry could be rendered obsolete: no one needs to sign off on something the blockchain has already confirmed.
Dubai is also working on making this future a reality by creating a system similar to Estonia’s, which it estimates will save 5.5 billion dirhams (46 billion baht). It also estimates the change will reduce CO2 emissions and redistribute 25.1 million hours of economic productivity, as people will no longer have to go to government offices for many tasks, and government workers can do something else. Dubai is just a small emirate — imagine the benefits for a large country.
A large country could use blockchain to make taxation much more efficient, as Estonia already does. The savings on paper and mailing tax forms alone would be substantial. With a blockchain-based system, you could log into your tax account, pay your money and be done.
Another quality of life improvement would be for healthcare and education. From vaccination records to student loans, it could all be done on the blockchain. This could extend to professional qualifications, making it easy for an employer to tell if someone has a fake degree. If your degree or other professional qualification is on your blockchain, you could send the record to the prospective employer, and there’s no way to defraud the blockchain.
The US state of Delaware is also using blockchain. Delaware is basically a tax haven, which explains why 65% of Fortune 500 companies are incorporated in the tiny state of just 1 million people. Delaware is hoping to make it even easier to incorporate by using blockchain and creating a legal infrastructure for distributed ledger shares.
Blockchain is also being used for regulation. One potential use is for pharmaceuticals, where pills can be tracked all throughout the supply chain, from the factory to the consumer. If somebody is buying prescription drugs all over the country in order to get around regulations, the blockchain will catch them and stop them from abusing regulated substances. The EU Intellectual Property Office is also researching how blockchain can be used to fight counterfeiting.
With all the benefits possible, will we see blockchain in government happen on a large scale? Yes. One large country that is conducting trials is the UK. Its Food Standards Agency has finished a pilot project that uses blockchain to track the distribution of meat. The US Food and Drug Administration is also tracking selected foods and drugs using the blockchain.
The UK Department of Work and Pensions is also studying whether blockchain could help claimants to manage their money. The Ministry of Digital and Creative Industries is preparing to oversee investments of over £10 million in blockchain for local governments.
In the end, blockchain will be integral in increasing the efficiency of governments across the world. If Eugene McCarthy is right about inefficiency being our shield against bureaucracy, then soon we will be defenceless. Blockchain may even make government services a pleasant experience.