Blockchain For Government
The Future of Governance
Blockchain is, at its core, an asset management platform. In today’s society, governments often are the ones who manage and/or regulate a tremendous number of assets in a country. In the future, blockchain technology will make this management/regulation immutable and instantaneous. We will move from a paper-based, delayed-reporting world to a more dynamic, real-time world. We can imagine voting systems. Access to new markets. Deep liquid markets. New ways of managing properties. In the next five, ten, twenty years, we will witness increasingly more cooperation and interoperation between countries and economies. Below are some practical use cases for governments and public sectors.
Voting: Preventing Fraud & Increasing Access Challenges
Regardless of one’s belief on the current state of voter fraud, there’s no denying that the incentive to artificially inflate political support has been around since democratic processes were implemented. Several cases/threats have been registered both domestic and foreign till date, all implicating voting system tapering of many levels.
How can blockchain help?
The blockchain is an ideal technology to end the polarized debate over the prevalence of voter fraud. It will also insulate elections processes from potential foreign intervention, and some districts are already testing blockchain systems in local elections. The ability to vote on the internet from home using blockchain tech will likely lead to greater participation thanks to greater convenience, while the immutable blockchain record can easily flag redundancies and tie unique personal identifiers to individuals to ensure that voters are who they say they are, and that they are eligible to vote.
Identity records are the most important type of records since they can be used to control all others, but there are many other types. These includes
● Personal records – marriage, divorce, death, passport, visa records.
● Land registration, deeds, property title, vehicle title, vehicle registration
● Corporate registration
Each of the original records listed above can be manipulated and falsified by government officials or black-market forgers. It is also not difficult in most cases to create realistic looking replicas of official documents which contain false information. People can reap different types of rewards from fake documents, including:
● Illegal immigration — fake marriage certificate, fake green card
● Illegal employment — fake green card, fake passport, fake driver license
● Driving a vehicle without testing — fake driver license
● Fraudulent inheritance — fake death, marriage, and/or birth certificates
● Fraudulent life insurance benefits — fake death, marriage, and/or birth certificates
● Selling property belonging to others — fake deeds, property/vehicle title, and or land registration
● Obtaining loans for fictitious people — fake identity and/or marriage information
● Terrorism — gaining entry to foreign countries to commit atrocities
As there are many incentives for bad actors, there is a significant market for fake documents. Globally there are now more than 50 million lost or stolen travel documents, triple the number from just a decade ago. Many countries have tens or hundreds of thousands of duplicate or stolen documents that are up for sale.
How can blockchain help?
In a blockchain-based system, paper-based documents are replaced with digital documents on an immutable ledger. The immutable nature of the blockchain means that these digital documents are impossible to duplicate or forge because there is only a unique, single record. Additionally, the digital documents can be made accessible only by a biometric scan, for example a face scan, a full hand fingerprint scan, a retinal scan, or potentially a combination thereof.
Governments have begun to implement blockchain-based systems for key record types. Some top examples include blockchain based system being used for land registration records and for vehicle registration. Ultimately improving the efficiency of government and private sector operations.
Land registration was selected first because 66% of civil disputes revolve around property disputes which creates a significant drag on the economy. The primary issue was that due to paper documents, much of the populace could not prove its ownership of property and records could be easily modified for a price. Blockchain’s immutable records and audit trail can secure land records, providing certainty to owners. This same system has now also been applied to vehicle registration, to provide certainty and security around vehicle registration records.
Citizen Services Management
Across the world, governments provide a range of services to their citizens. These services include:
● Education (schools and libraries)
● Healthcare (hospitals, doctors/nurses)
● Emergency services (fire, police, national guard)
● Military (army, air force, marines, navy)
● Energy (electricity, other)
● Utilities (water, garbage, sewage)
● Post Office (letters, packages)
● Law enforcement (courts, police)
● Infrastructure (roads, schools, hospitals, utilities)
● Business Incorporation & Registry(courts, police)
To facilitate faster and more efficient service, it would be beneficial for all governments to provide digital e-government services. In this way, people in each country could check their accounts and access information about each of the services listed above. Unfortunately, few if any of these services are available in digital format or accessible online in most countries.
Most governments are not able to provide integrated online services to their constituents due to a number of key factors. First, as was noted above, most people do not have a unified digital identity and most governments have not yet provided their citizens and legal residents with a secure digital identity. Without a secure digital identity, the security and privacy of a person’s information cannot be guaranteed. Also, if services were to be accessible online, a hacker could potentially ‘spoof’ a person’s identity to gain illegal access to these services.
Second, a large portion of government information is still held in paper form and so is not digitally accessible. Many governments have initiatives in place to digitize records information, however, most are behind or have inefficient processes which may be error-prone.
Third, many government agencies act independently of each other, so data is siloed, and it is difficult to cross-reference information on the same person across departments. A unified digital identity would be very useful for organizing and accessing information across departments, but as mentioned above, it does not exist in most countries.
How can blockchain help?
Blockchain technology provides a single solution to all three challenges noted above. First, it can provide a secure digital identity; next it digitizes all new data transaction data automatically and securely; and finally, it creates an interoperable platform across departments and agencies. These systems will streamline all government activities and are forecast to save 10’s of millions of hours of work and billions of dollars annually. This is not a theoretical exercise as blockchain-based e-government systems do already exist.
Estonia is home to the most famous blockchain-based digital government and e-residency program. This portal enables anyone to become an e-resident of the country in 30–60 minutes and at a cost of 100 Euros. Estonian e-residents can use the portal to create a digital identity, establish a business, setup banking relationships, and execute business documents.
Proving one’s identity is a daily activity, but one that most people don’t think about too deeply. In almost all cases, the foundation of online interactions begins with the authentication of digital identity. The basis of most fraud is improper authentication of digital identity. Also most financial institutions are government regulated and require strict adherence to Know Your Customer (KYC) and Anti-Money Laundering (AML) checks. As a result, banks and financial services companies require government issued documents that attest to your identity.
The challenge with most government documents is that they can be easily falsified and there are few tests that can be done to differentiate real documents from fake ones. In many countries it is not uncommon that corrupt government officials will modify government documents, for a fee, for various reasons. So even if it might be difficult to modify a document, it is possible to pay or bribe an official to modify a document so that the legal version has incorrect information.
A serious global challenge is that according to the UN, approximately 1.1 billion people do not have any official identity documents at all. Over 75% of these people without identity documents are in sub-Saharan Africa and Asia, and 40% of the total are children under 18. This is a significant problem because people without identity papers are typically not eligible for government assistance, education, employment, bank accounts, housing, and many other important services. People without these fundamental services, especially children, are more susceptible to trafficking, forced labor, and early marriage or sexual abuse.
How can blockchain help?
Blockchain technology provides three special capabilities that enable it to provide a better foundation for identity than current systems. First, all data is recorded on the ledger via a consensus mechanism which enlists multiple parties to verify that the data is correct before it is written. Second, all transactions in the ledger are immutable and digitally signed, which means the records are unchangeable and those who wrote the records are accountable for any issues. Third, the digital, immutable record can be linked to a biometric or set of biometrics (i.e. thumb print, facial scan, etc.) which means that it is unique, easily verifiable, and nearly indestructible.
Blockchain has the potential to solve the challenges section above — fake documents, corrupt officials, and destroyed records, as described below:
● Fake documents—identity would be verified via a biometric scan which would access official records on blockchain which eliminates the need for documents
● Corrupt officials — the data about one’s birth is immutable and cannot be modified once made so corrupt officials become powerless to make changes
● Destroyed records — as the data is digital and stored in decentralized storage it can be considered virtually indestructible
The government of Finland and the UN World Food Programme (UNWFP) have both launched different blockchain programs aimed at providing digital identity to refugees. Government agencies usually struggle to provide equitable services and keep track of information for refugees due to identity challenges. With a blockchain-based ID accessible by a biometric scan, refugees can be given a unique digital ID so that services can be provided and tracked accurately. Additionally, it is possible with blockchain technology to ensure that vouchers in these programs are only used for specific purchases, such as food.
These blockchain based solutions provide a unified digital identity, which enables individuals to access services such as food pantries, shelters, and banking more easily. It also enables cities to reduce administrative costs, provide better services (such as distributing mobile phones with apps), keep track of service usage, and minimize fraud.