This Is How Governments Might Respond To The Data Transparency Blockchain Is Creating

Some governments are more transparent than others. That’s not a surprise to anyone who keeps up with global news. But blockchain technology could change the way many governments operate, mostly through an increase in both efficiency and data transparency.

If a government chooses to use blockchain for contract management, identity management, and its many other uses, it creates a publicly available record of those actions.

So we could soon be seeing the beginning of a new, radical transparency in government.

Or not.

How Transparent Is Too Transparent?

Total data transparency would be an exciting new era of governance. But we might see some pushback before we get there, if we ever do. The reason is that most governments may be a little worried about this type of transparency. It could be for security reasons, or it could be that they just want to keep their edge over rival countries. Knowledge is power, right?

And those worries aren’t just limited to governments, by the way. I’ve spent the three years working to ensure authenticity in supply chains by using blockchain and smart contracts. What I have found is that some entities already know they have a problem with counterfeit goods, unethical supply chains, conflict materials, but they don’t necessarily want that information public. Which makes sense from their perspective. If you have a serious problem, you might tell a few friends who can help, not the entire neighborhood.

On The Road To Transparency

Whatever your thoughts on social media, you have to admit that it has done an incredible job of getting people to air what used to be personal information online. At this point, most of us are already pretty comfortable relinquishing our privacy to businesses and the government. We hardly think twice when clicking on those buttons that say “Agree” or “I Accept the Terms.”

The question is, will this go both ways? Will governments and corporations be willing to become more transparent in exchange for the benefits that blockchain provides?

Because there are plenty of benefits.

Smart Contracts And Efficient Government

Governments around the world are in a great spot to utilize blockchain technology. One of the biggest complaints about government today is about inefficiency. Wasteful. Well, blockchain cuts out inefficiencies and waste from systems.

Government contracts are in high demand for a lot of companies, and blockchain provides a way for governments to quickly and easily determine who has a history of completing contracts on time and on budget.

And blockchain can also help cut out middlemen that increase the complexity of citizen services. If you want to sell your car, you have to exchange the title at the DMV. Buying land, starting a business, or even paying taxes require the use of a governmental middleman that validate the transaction. That third-party verification isn’t necessary on the blockchain. Each party has access to the records of the transaction. Instead of going to the DMV to complete the transaction, you could sell your car on an app on your phone.

Regulatory Compliance

Governments also create regulations, especially environmental ones. After all, no one likes improperly disposed of mercury! But officials can’t always ensure regulations are being followed. Blockchain can help here, too.

Just this past June, seven Chinese citizens were jailed for falsifying data and tampering with the systems that monitor air quality. China has huge problems with the quality of its air in many parts of the country. But they’re cracking down — and falsifying monitoring data is now as serious a crime as doing the actual polluting.

But what if that information was automatically stored on the blockchain as soon as it was collected, available for everyone to see? The people who are currently in jail wouldn’t have even had the opportunity to falsify the data. An unchangeable and transparent data trail is exactly what’s needed to make sure that regulations are being followed.

Now, those people who falsified the data? They stuck cotton into the sensors to stop them from picking up the correct amount of pollutants in the air. So blockchain technology can’t stop everyone who’s determined to break the law or flaunt a regulation. But it will stop a lot of them.

Is that going to be enough for governments to take the plunge into a more efficient, but more transparent, form of governance? It may be. Each country will be different, so it’ll be interesting to see who takes those first steps towards greater transparency — and when they take them.