The National Government as a Blockchain Use case.

The government is simply a group of people shepherding an organized community, or nation. Through Government, organizational policies are enforced and mechanisms for setting these policies are determined. The government system in one state or country differs from another. But they all have their pre-documented book of rules and regulation (constitution), governing principles and philosophy This constitution is what sits as the hindrance to absolute lawlessness or deviance of citizens or total oppression of citizens with government personal interests. The word government is commonly affixed in reference to about 200 existing independent national governments on Earth, including subsidiary organizations even though all types of organizations have governance.

Blockchain can be described as a highly secure and decentralized ledger system (usually managed by a peer-to-peer network) on which information can be stored but cannot be altered. The population of people that may have knowledge of Blockchain may not be as many as those who don’t but Blockchain can still be referred to as a worldwide craze; not just for the tech lovers/fanatics or experts but just anyone. The highest tier of regulatory bodies in a state or country which is the government is slowly becoming a part of the blockchain space in one way or another. If the government is involved, it is only a matter of time for the citizens or any layman to be led to Blockchain adoption.

Blockchain technology not only allows for trading of popular digital assets like Bitcoin or other altcoins but also has an array of useful functions. Blockchain focuses on the use of a network of computers that store and verify data. The computers in a particular network can be distributed all over the world and the network is not controlled centrally. This is different from storing data on servers through cloud storage. Blockchain technology can safely be called one of the most transformative technologies in this century with the most obvious use cases being the application in the cryptocurrency space.

Governments around the world have begun exploring the technology making it easier to use model nations and decipher what Blockchain can do for the government. With the ‘Government’ as the use case here, we’ll narrow down the functions as regards what blockchain can be used for.

National Cryptos

The benefits of owning a digital/ cryptocurrency range from transparency, to security, to less paperwork, easier international trade, etc. these advantages amongst others enable a move away from inflation-vulnerable traditional currencies, oversight and control over the population’s finances, lower costs of the printing of physical money easier taxation, and easy monitoring of crime.

Ecuador in South America became the first nation to launch a cryptocurrency in 2015, at least 13 countries have either launched their own cryptocurrency or hinted their intention to do so since then. Venezuela, Tunisia, Senegal, and the Marshall Islands have all issued digital currencies. Highly notable is that, in March 2018, President of Venezuela Nicolas Maduro announced the launch ‘the Petro,’ its national digital currency. The Petro later raised $735 million from its first pre-sale day according to Maduro. According to a claim 83,000 individuals in 127 countries have bought into Venezuela’s cryptocurrency, these sums up to a pre-sale figure of $5 billion. These estimates are highly contested but it is what it is. This is not to say that all other nations will/won’t be as successful in introducing Blockchain digital currencies to the population, but just to show the possible use of the technology for government in creating national digital currencies.

No Budget Padding

The budget is the quantifiable estimate of a government’s credit balance and estimated expenditure from that credit balance. This is usually a controversial subject in many nations. Sometimes the estimated expenditure is more than revenue in hand. This could be borne from improper budgeting or sheer lack of funds for worthy projects. But in many cases, budgets are padded for selfish gains of personnel in power.

Budget padding is an artificial inflation of estimates that covers unexpected costs or gives the project room to expand. It is commonly seen as an unethical practice, but it is defended on the ground of practicality. Government adoption of Blockchain can eliminate unintended use of budget padding and drive in transparency in budgeting. National Research Council of Canada has attempted to leverage Ethereum blockchain to increase transparency in Government contracts.

Between New York City’s Council and the mayor’s office: the City Council demanded to know precisely how much the city intended to spend approximately $3 billion set aside for the homeless based on the mayor’s $89 billion budget. The Council referenced the main reason for a tense negotiation to a lack of clarity surrounding this and other budget-related issues. The government may sometimes request an appropriation of funds that will be diverted or even mismanaged, this instance is common in other countries. Budget transparency on blockchain platform will be a monitoring source for corrupt or incompetent hands. It may be impossible to eliminate some measure of waste in government but blockchain can replace many of the intermediaries combined that produce sky-high budgets and massive inefficiency.

Paper Work, be gone.

The average national post office in Nigerian is clogged with loads and loads of paper documents. Only in recent times did organizations, companies, and businesses start used computer systems for data entry and storage. To find a delivered package, you’d have to go through a tedious process of scanning manually through books, searching for corresponding documents on the package in filing cabinets, etc. Although a proper filing system is maintained to classify documents, the paper will always pile up. This scenario and many others you may know will give a mental picture of what paperwork could be like and how disadvantageous it is. To drastically reduce paperwork or avoid loss of data or important documents, blockchain can be introduced.

According to a concise report, between the cost of file cabinets, file clerks’ salary, and indirect costs, such as boxes to transfer files and the creation of file disposal forms, it costs the government $2,603 per year to maintain a single five-drawer filing cabinet. This is just per year in comparison to the National Archives dated back to 1775.  Consider that, as little as flood or a fire can cause damage to records, but digital information is somewhat timeless. The idea is not to completely digitize government work but to capitalize on digital storage as much as possible. The need for data storage cannot be overemphasized for sake of when information is needed as a reference point or proof but costs surrounding paperwork is generally avoidable. Hence the usefulness of blockchain, a permanent, non-space consuming record of tax payments, arrest records, driving licenses, etc.

 

Asides previously explained blockchain uses in the government; Blockchain if used right can ensure secure data entry, combat corruption, and promote ease of access to voting and eliminate voting fraud amongst other things.

  • Dubai has a target to emerge the first government in the world to conduct all of its transactions using blockchain by 2020 after estimates show that adding visa applications, bill payments, license renewals and other documents to a blockchain could save 5.5 billion dirhams (£1.1 billion) annually in document processing alone.
  • A land registry project developed with the Bitfury Group dubbed the National Agency of Public Registry (NAPR) is the government of Georgia’s experiment with blockchain.
  • One of Europe’s leading supporters of blockchain, the Swiss city of Zug already accepts cryptocurrency as payment for public services and has digitized ID registrations built on the blockchain. Zug also completed an e-voting trial.
  • The USA is exploring a number of distributed ledger applications. The FDA (Food and Drug Administration) announced it had signed a two-year joint-development agreement with IBM Watson Health in January 2017, to explore using blockchain to securely share patient data. This collaboration aims to address the lack of transparency and security in health data processing and began with a trial on oncology-related data.

 

The government shoulders the responsibility of handling their processes with efficiency and new technologies such as blockchain have the potential to usher in drastic changes to the situation. Time will tell if “Blockchain Governments” would be a general terminology in reality when more governments adopt blockchain technology.

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Credits- Tom Macaulay, Sam Mire, Finjan Team, Bizfluent, Hasib Anwar.

 

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