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Blockchain’s Potential in Government

This is the third installment of KSMC’s Emerging Technology blog series. In this series, we share thought leadership about emerging technologies such as blockchain, chatbots, and big data.

Technology has altered our lives. Today, we summon complete strangers directly to us for a ride; we instantly capture and share our lives through pictures or videos from our phones; digital banking is always at our fingertips; and, of course, finding information is instantaneous. So, what’s next?

There are several emerging technologies on the horizon. Many have the ability to transform government. In this post, we explore blockchain’s potential impact on government.

Why Blockchain Matters
These quotes share why we should care about blockchain:

“What the Internet did for communications, blockchain will do for trusted transactions.” – Ginni Rometty (Sounce: IBM)

“You can think of blockchain as the second generation of the Internet – a transformation from an Internet of information to an Internet of value.” – Volodymyr Nazarenko (Source: LinkedIn Pulse)

What is Blockchain?
Have you heard of Bitcoin? It is an electronic currency based on Blockchain.

In the simplest terms, Blockchain technology uses a distributed or decentralized digital ledger across a network of computers. Each computer contains a piece of the chain which is immutable (a.k.a. cannot be changed). Because it’s distributed and secure, there is no need for the central authority of a ledger. The ledger keeps a time-stamped record of every transaction through algorithms. These algorithms keep the ledger secure so no single party can change records. The result is a peer-to-peer network of secure and trusted transactions. Blockchain technology can be used to transfer or transact anything that holds value.

Blockchain Disruption in Government
The conversation around blockchain transitioned from why to use blockchain to how to use blockchain. Today, governments use blockchain for secure citizen identification, or to transmit documents of value such as property deeds, which is in progress in Illinois.

Additional in-progress blockchain use cases include:

  • The U.S. Federal government is contemplating several use cases (see the full list). For example, the Centers for Disease Control (CDC) is investigating what it would require to build a public health surveillance system to manage data during a crisis or better track opioid abuse.
  • The State of Illinois is embarking on five projects in hopes of creating more efficient, integrated, and trusted State services. They are doing this by redefining the relationship between the government and its citizen in terms of data sharing, transparency, and trust – all of which are part of the State’s digital transformation.

Blockchain use in government will disrupt the services citizens experience. As shared in the IBM “Building Trust in Government” whitepaper, there are several ways blockchain can trim time, cost, and risk, and provide a high impact.

The National Association of State Chief Information Officers (NASCIO) has shared multiple use case ideas in process at the state level that fit within these categories. In Blockchains: Moving Digital Government Forward in the States, NASCIO shares some of the potential use cases:

  • Managing Property Deeds
  • Evaluating and Managing Professional Licenses
  • Filing and Managing Insurance Claims
  • Tax Calculations and Payments
  • Authenticating Academic Credentials
  • Managing Birth and Death Certificates

It’s a Digital World
As we approach 2018, we are even closer to digital disruption from technology like blockchain.

Blockchain can bring digital government services to citizens in secure and instantaneous ways.

The US Federal government has created a tool called Atlas through its Emerging Citizen Technology program to track potential use cases, collaborate, promote hackathons, and share information on the adoption of blockchain. I encourage you to review and participate.

Conclusion
While the technology around blockchain is maturing, the opportunity to use it in government is already being realized, giving us the opportunity to create a roadmap for adoption. Ideas are being generated across all levels of government at a global scale.

The digital disruption of government services through emerging technologies like blockchain is just beginning.


Michele Hovet is the Client and Partner Innovation Director for KSM Consulting. Michele serves as a thought leader and solution innovator. Connect with her on LinkedIn.