Over the past few years, we’ve seen active government initiatives looking into adopting decentralized technology, leading to active discussions on whether or not such initiatives are worth the time and money required. Regardless of which side of the argument you stand on, we’re now seeing a prevalent push for implementing this technology in the governmental sector. Experimentation When the decentralized technology was making waves in the financial sector viral, the common consensus was that this has huge potential, but trust needed to be established before it can be fully utilized on a large governmental scale. When bitcoin was created, it’s entirely within the realm of possibility that Satoshi didn’t expect that the technology could vastly improve information processing efficiency. Instead, . This shifted the common belief, making blockchains confidence machines. Trust is a blockchain’s superpower as it provides transparency, an open source system, and eliminates any middlemen involved in traditional systems, facilitating instantaneous communication without delays. One additional advantage is that these cryptocurrencies assume a finite supply of tokens in circulation. You can always print money, but you can print more bitcoin, even if you wanted to. it was focused on increasing trust The Technology’s Potential Decentralization’s potential in governmental sectors can be clear now that the technology has matured. From central bank digital currencies, to voting and identity verification, the technology is now capable of facilitating the infrastructure for any purpose. In fact, they can provide even higher confidence in the process, as blockchain voting would provide a much more efficient solution with the ability to individually audit votes and results to ensure voting full validity. Central Bank Digital Currency (CBDC) Central bank digital currencies are digital tokens, similar to cryptocurrency, but issued by a central bank. They are pegged to the value of that country's fiat currency, which eliminates one of crypto’s key issues: Volatility. Over 100 countries are considering CBDCs and how to implement them. In fact, a team called Broxus just , which only emphasizes the true interest in implementing this idea in governments. stablecoin announced a partnership with DA5 for the Philippines’ very own This isn’t just theoretical at this point, as The Bahamas introduced their own CBDC with legitimate advantages already being prevalent. The Bahamas introduced the which made it easier for people to make transactions. The island of Jamaica expects to save about $7 million a year on replacing, storing and handling cash, according to the Atlantic Council’s CBDC tracker tool. Sand Dollar Additionally, a report titled “ ”. It found that blockchain can bring savings for banks’ core middle- and back-office processes in areas such as: Banking on Blockchain: A Value Analysis for Investment Banks Finance reporting where costs could shrink by 70% as a result of the optimized data quality, transparency and internal controls; Compliance with a drop by 30% to 50% at the product level due to the improved transparency and auditability of transactions; Centralized operations supporting functions such as Know-Your-Customer and client onboarding could see costs reduced by 50% by the establishment of more efficient processes; Business operations such as trade support, middle office, clearance, settlement and investigations could see their operating costs being lowered by 50% All these are valuable opportunities governments cannot miss, which explains the sudden interest in finally making the concept a reality. Voting This has been a valid topic for blockchain’s utility in governmental sectors. One of the industry’s common practices is Decentralized Autonomous Organizations (DAO), putting the decision-making process in the community’s hands. These make it so a company’s developments are implemented by the community instead of by a single entity, or a board of directors. The community gets to decide what developments make it to the production line, as they know what could or couldn’t be of use to them. It offers a much more democratic & transparent method to run a company, with voting taking part on all decisions on the blockchain. This showed that blockchain voting can be looked into for other purposes, like in the case of an election. , , and wrote that there were controversies over the surge of mail-in ballots in the US November elections due to the COVID-19 pandemic, which underscores the need to modernize the mechanics of voting. They argued that blockchain technology can enhance efforts to move to electronic voting by offering greater security and transparency, which may increase needed trust in election systems. Amrita Dhillon Grammateia Kotsialou Peter McBurney Luke Riley These aren’t just hypotheses, as we’ve had on-chain voting since the conception of DAOs, which prove to be a fully democratized method of running a company. Across 27 countries surveyed by the Pew Research Center in 2019, a median of with the way their democracy is functioning. In the same study, a median of no matter who wins an election, things do not change. These facts lead us to believe that structures and methods need to be changed in order to re instill confidence in government processes, and most importantly, in Democracy. 51% are dissatisfied six-in-ten think Digital Identity One more implementation of decentralized technology can be digitizing user identity. The thing is, the internet is a dangerous place. There are bad actors all over the world constantly trying to gain access to user sensitive information, as there is an entire hostile industry centered around acquiring and selling user data. The thing is, this isn’t only a practice led by harmful hacking organizations, as your average company does this too. Cache & Cookies give websites a ton of information that you may not be comfortable sharing. This includes your browser history & your search history. But that’s not all, as they also store your personally identifiable information like your name, home address, email address, & telephone number. Once awareness was brought to this issue, a large initiative pushed for clear disclaimers and permission before being able to acquire such information. That is why when you visit a website, you get an intrusive “accept all cookies” popup. Digital identity could be the solution to user data leaks, & we’re not too far from this concept being a reality. One example we can use is Hashbon Pass, which is a protocol for reusable identity verification, securing your information when registering on services. This tool would prevent data-hungry companies from acquiring your information, while facilitating social ratings, credit ratings, and a much more convenient experience on the world wide web. This can also be implemented to be used for governmental services, just imagine the possibilities. No more standing in endless lines at the DMV, no more filling out paper forms and getting lost trying to submit them, and finally, providing a digital identity for on-chain voting on elections. While these functionalities haven’t become a reality just yet (as these integrations with governments aren’t being considered), the utility is clear. Key Takeaway When the technology was first a point of discussion, a lot of skepticism was involved. This isn’t bad, as a healthy dose of skepticism can’t hurt anyone. However, if concern remains even if the technology’s utility is evident, and provides a better and more efficient medium for governments, then it can only hurt innovation, slowing down progress and relying on stone-aged technology that will never evolve, even if the general public is dissatisfied with current procedures put in place.

The writer has or has previously had a business relationship with companies mentioned in this article.

Government Adoption of Decentralized Technology

Too Long; Didn't Read

Company Mentioned

Coin Mentioned

@falbouni

Credibility

RELATED STORIES