Last week, the government’s chief scientist urged the UK to adopt the technology behind Bitcoin in order to transform the delivery of services in both the public and private sectors.
In his report, Sir Mark Walport argued that using blockchain technology in the public sector would 'redefine the relationship between government and the citizen in terms of data sharing, transparency and trust.'
Sir Walport’s claims are absolutely right and 2016 is undeniably going to be the year we see industries sit up and take note of how revolutionary blockchain could be, from the world of identity to the public sector.
Indeed, ‘blockchain’ is fast becoming the buzzword of 2016. We have read and heard so much about this technology already but are we completely clear on what it actually is? In short, it’s very much like the traditional databases we use today, except it is far more secure and completely open source.
There is the ability to make it completely decentralised which means no one ‘owns’ it – any participant, across geographies and institutions, can collaboratively make changes to the ledger and these changes are reflected across all copies in a matter of minutes. This opens up a world of opportunities which have never been previously possible.
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It is important to understand this when we compare existing methods of data management, which typically involve large legacy IT systems within a single organisation. Highly centralised systems pose many problems; data is often out of sync or out of date and in today’s digital threat landscape, vulnerable to cybercrime.
Not only that, we, as citizens have to completely ‘trust’ the system that is in place. However, with blockchain we have the possibility to build a ‘trust-less’ eco-system where no one person or company can manipulate it either by accident or maliciously, ultimately reducing fraud and vulnerabilities.
With this in mind, blockchain has plenty of benefits for governments and the citizens themselves, from protecting critical infrastructure from hackers tampering with software to providing greater transparency of transactions between government agencies and citizens and also minimising fraud.
In the report, it is revealed that the Department of Work and Pensions pays out around £166 billion of taxpayers’ money in welfare support every year with some £3.5 billion being overpaid through fraud, claimant error and official error.
With blockchain, these errors can be dramatically reduced. This is because by confirming digital identities through distributed ledgers on encoded devices, the right citizens would receive the right benefits, identities would become much harder to forge, and the level of fraud would therefore be dramatically reduced.
Using blockchain in the UK government also reduces costs of protecting citizens’ data while creating the possibility to share their data more easily. By creating a single digital identity on the blockchain, all citizens’ information and transactions are stored securely and this makes processes such as tax returns and renewing passports seamlessly simpler as people can request documents without having to type their details in time and time again. It’s just another ‘stamp’ on the blockchain.
We are already seeing other governments recognising the benefits of blockchain, and implementing the technology to improve their processes. In a country struggling with land title fraud, Honduras agreed to use a company to build a permanent and secure land title record system using blockchain.
The Estonian government, too, has recognised the benefits of blockchain, using a form of distributed ledger technology to allow citizens to verify the integrity of their records on government databases.
By doing so, citizens are not only reassured that their data is being held securely and accurately but the administrative burdens on both the government and citizen are dramatically reduced.
So far, so good. A move to blockchain certainly seems to be ticking all those boxes for demand for data transparency, accuracy and security.
But of course, with technological disruption often comes fear, uncertainty and doubt – especially when individual identities are at the centre of that disruption. Many will worry that providing personal information to an institution would bring to the fore a ‘Big Brother’ society.
With blockchain, this isn’t the case at all. We would instead argue that blockchain actually enables an ‘anti-Big Brother’ society, as there is more data transparency and citizens are in control of their identity.
Blockchain is certainly going to make an impact in the years to come. The technology has the potential to revolutionise how a number of industries, particularly the UK government, function.
The only thing we are uncertain about is just how and widespread it will become. However, with governments beginning to realise that centralised systems do not deliver the level of customer service people demand, it’s only a matter of time they will turn to blockchain to address the problem.
In today’s digital world, services need to be delivered in real time, digitally and securely. Blockchain offers a more secure, efficient solution to clunky, vulnerable legacy databases, leading to much more effective spend of the nations’ taxes.
Sourced from Gareth Stephens, Head of Proposition Development, GBG