Much of the dialogue around blockchain has centered on financial services use cases but the potential of the technology is no less profound when considered in a public sector context. Indeed, much of the discussions I am having today are with government entities exploring how they adopt blockchain technology. The recent announcements by the Dubai government, for example, demonstrate that regional governments can also find value in the blockchain. In the case of Dubai, they plan to use a blockchain to optimise the manner in which documents are handled; but there are many use cases or possibilities in which governments can leverage blockchain to deliver transformational value to their constituents and stakeholders. There is also a lot of interesting work being done around identity on the blockchain and I will share a regional perspective on that in a later post.
Below are ten other ways in which the public sector may find value in blockchain technology.
1. Land and Property Title Registry
Land titles and property rental agreements could be recorded on a blockchain. Imagine, for example, when land is initially subdivided and the dimensions and ownership are written to a blockchain; once property is built on it, the details are likewise recorded; and then, as title passes from builder to owner and perhaps to renter, each change is also recorded. This would enable government to have a real time view of property transactions for calculation of levies (such as service charges for waste disposal), stamp duties, or understanding property market dynamics; and would also reduce the time taken to effect a real estate sale or secure a rental agreement. Rules, such as those relating to the collection of services charges or taxes, could be represented as smart contracts on the blockchain; and the broader network of entities who require access to this information, such as government departments for visa issuance, banks and insurance companies, could get quick and effective access to the data
2. Management of Government assets
Governments manage a significant number of assets. Blockchain can greatly improve the management of these assets across entities along with the lifecycle, such as procurement or maintenance, associated with them. The supply chain, from procurement through to implementation, usage and then disposal, could be based on a blockchain. For example, in the case of an electrical utility, each component used to deliver the electricity to the home could be tracked. Contractors, for example, responsible for ensuring the maintenance of a part or other infrastructure would write proof of their maintenance activities, once completed, to the blockchain; and, in the event of a defect or product recall, the government would quickly be able to ascertain their exposure based on a real-time view of asset deployment. The use of blockchain here would also facilitate audit processes since the procurement process, physical asset management, and disposal of assets would all be recorded on a shared ledger and governed via smart contracts to help ensure assets don’t go “missing” or not maintained correctly.
3. Compliance ledger for critical national infrastructure
With much of a country’s critical national infrastructure being digital or integrated with digital world, there is the possibility to build a compliance ledger, using blockchain technology. This takes advantage of the quality of immutability to record all changes to assets that relate to critical national infrastructure. These changes or activities could be physical, such as recording access to buildings, or could be digital, such as recording firewall change or firmware upgrades. By writing to a single ledger, across a broad range of government entities, the organisation responsible for ensuring the security of the state could gain quick and real time insights into the status of critical national infrastructure and, in the event of an incident, could quickly determine cause.
4. Vehicle Registration
The entire lifecycle of a motor vehicle could be significantly optimised through the use of a common blockchain. Manufacturers, dealers, vehicle registration authorities, police, fleet owners, banks, insurance companies, maintenance providers, road usage charging systems and drivers would all be participants in a common ledger that would provide each with a real time and more accurate view of a vehicle’s current state. For example, vehicle sales could be effected by smart contracts that would ensure that title would not pass unless approved by a Bank (if associated with a loan) or unless a roadworthy inspection has been performed; or, at the end of the lifecycle, disposal (scrapping) of a vehicle cannot take place unless the smart contract confirms that the vehicle is owned by the person requesting disposal, isn’t flagged as stolen, and does not have any loan with a bank attached to the asset.
5. Voting and Electoral Registers
Electoral registers document all the people in a given jurisdiction who are entitled to vote. By recording this data on a blockchain, it makes it simpler to administer and to reduce fraud, since it could be accessed and integrated with systems, such as the immigration system, births and deaths registrar, and other entities within a government so that the electoral register is kept constantly updated. Elections or voting could then be digitised; such that each person on the blockchain is given an electronic token that they then use to vote with their vote recorded on a blockchain. This would reduce fraud but would also open up possibilities such as someone voting from home or a mobile device, using biometric authentication to validate their identity.
6. Trade and Business Licensing
In a given nation, there may be multiple agencies in multiple jurisdictions responsible for governing the issuance, renewal and compliance monitoring of different trades or businesses. For example, there may be an entity responsible for issuing business licenses, another responsible for issuing visas associated with these licenses, and yet another agency responsible for regulating the industry in which the business operates. If these registrations were written to a blockchain and made available to all of the different participants in this process, such as regulators, visa authorities, and so on, many time-consuming processes could be optimised along with compliance improved. For example, a restaurant may be registered via a blockchain and then each inspection for compliance purposes recorded to the ledger with rules around penalties encoded as smart contracts; or, similarly, the process of opening a business could be significant optimised to the point that it could be executed via a mobile app or online.
7. Central-bank issued Digital Currency
Many central banks are today exploring the possibility of creating a blockchain-based digital “version” of their fiat currency. Bank of Canada are exploring it; as did Bank of England; China are likewise are investigating it; as are many other central banks. I have also had a number of discussions with Central Banks around the Middle East and Africa who are interested in understanding the benefits and process by which they can digitise their fiat currencies in this way. There are a number of reasons and benefits (and will write a post shortly on this topic) but, in essence, by digitising cash on a blockchain, central banks can offer a more secure form of currency that doesn’t carry the costs of managing cash whilst also allowing it be tracked and traced as it moves through the system. This allows the banks to better address fraud but also allows them to more effectively execute their respective monetary policies. For example, implementing what was called “helicopter money” by economist Milton Friedman; wherein money is effectively dropped directly into the hands of the public as a ways of stimulating the economy (whilst also increasing inflation). Needless to say, the macroeconomic impacts of putting fiat currencies on a blockchain are a subject for significant research and debate.
8. Foreign Aid and Charity
Many GCC countries today give substantial amounts of money in the form of foreign aid and charity (such as the zakat). Globally, a substantial percentage of foreign aid leaks due to corruption in the countries who are receiving it. Indeed, the United Nations famously estimated the losses to be as much as 30%. The blockchain could help address this. The donations could be written to the blockchain and then spent, by the actual recipients, using digital vouchers; providing traceability and visibility into the use of the funds, and removing the middle men and intermediaries who are often the source of the fraud or misuse of the funds.
9. Intellectual Property
The qualities of provenance, mutability and finality make the blockchain well-suited for recording intellectual property as an alternative to (or digital manifestation of) the patent process. An artist could, for example, record their art to a blockchain and then, using a smart contract, control and monetise the use of their art by others. Authors of books could write a hash of their literature to the blockchain thus establishing their authorship. Inventions could, instead of being filed as patents, be written to a blockchain at time of creation; with the immutable nature of the blockchain providing sufficient proof of time of creation and ownership such that rights could be enforced in a court.
In some markets, it’s possible to find a broad range of counterfeit goods — from handbags to sunglasses to car tyres to telecommunications products to even medicine. Governments may consider the adoption of blockchain as a means of tackling this problem and giving consumers better assurances as to the authenticity of the products they are buying or consuming. As part of the importation process or even at point of manufacturer, a record would be written to a blockchain of the receiving country. As the product passes through the system en route to its ultimate consumer, its status would be continually updated. The consumer could, on receiving a product, look it up on the blockchain to determine its provenance and be assured that it is not fake.