Democratising data: why the public sector is banking on blockchain

Diving into the new year always brings with it a sense of speculation on what the next 12 months will bring, and an overview of the 12 months just past.

In the technology sector, 2016 was very much a big year for blockchain, and it’s set to get even higher up the agenda in 2017.

Many global banks, including the likes of Barclays, RBS and HSBC completed trials of blockchain technology last year, to assess its use in financial markets across the globe.

What’s more, the Royal Mint declared that it is putting Gold Bullion on the blockchain this year, with each Royal Mint Gold (RMG) token equating to a gram of Gold.

With such seasoned experience in the financial sector, both the banks and the Royal Mint’s experiments with blockchain point to this technology’s potential in trade.

>See also: Emerging from bitcoin’s shadow: The rise of blockchain

But it’s not just the financial sector that’s set to feel the benefit. And while its currencies and commodities that are typically associated with the blockchain, it can hold data of all shapes and sizes. Whether this data pertains to healthcare, tax, property or citizens, blockchain is about to shake up the public sector in a big way.

An introduction to blockchain

Many are familiar with bitcoin, the cryptocurrency that’s dominated the news agenda, with many central banks fearing it.

Blockchain is the behind-the-scenes-technology of bitcoin; it provides the publicly distributed ledger technology that stores records visible for all to see.

These records are called ‘blocks’, and each and every block is linked to the next block in the chain. If a block is altered, this will be transcribed into the publicly facing ledger, meaning it can’t be tampered without getting noticed.

You can also apply specific rules to the blockchain. For example, some transactions could require two people to approve them before they occur, or, a transaction might need another to be made before it for it to take place. These bespoke rules can facilitate particular processes to suit the unique demands of every industry.

Alongside these security benefits, blockchain is also said to be decentralised, so the data isn’t held in a central repository. It’s the reason why many organisations are turning to this technology, but how might it impact the public sector this year?

Blockchain: easing off pressure

Implementing blockchain capabilities across various public sector functions and organisations will be no easy task, and will be accompanied by change management challenges for those employed by governments too. But the benefits of this technology will ensure that it’s worth it in the long run.

Digital infrastructures can be costly. For governments, this is particularly true, given the vast amount of public data that needs to be stored. There are also peak periods in which data is offloaded to these infrastructures – tax returns, for example, mean that the Government’s central system is put under a lot of strain at the end of the financial year.

>See also: How blockchain technology will revolutionise finance in emerging markets

With blockchain being decentralised, it eases off the pressure for centrally held infrastructures, which would ultimately save money, too.

The Royal Mint for example, charges 0.5% to 1% of the value of a customer’s holdings for a vault. Its move to put Gold Bullion on the blockchain means that these storage and management fees are significantly reduced, as spot trading Gold on the blockchain enables it to become digitised. It’s these reduced costs that will no doubt seem appealing for public sector services in the future.

Paving the way for e-voting

One major process that involves government infrastructure is the electoral vote. For many, 2016 was a year of trips to the polling station, with the EU Referendum, the London Mayoral Election, and by-elections for some.

When so many parts of our lives are digitised, why couldn’t voting be? Blockchain technology could make the ballot vote a thing of the past, removing security risks associated with online voting, as well as the costs that come with dealing with the overload of traffic and data it generates.

Estonia is setting a great example in this regard, offering unparalleled eGovernment services, with an e-residency programme that’s powered by blockchain.

The Eastern European country offers Digital ID cards for its citizens, which have cryptographic keys that are stored on the blockchain. These are what its citizens use to securely vote online for general elections, a regular practice for the last 12 years!

As the results can’t be tampered with, they can be trusted. And what’s more, as this method of voting is far more convenient than finding a polling station to travel to or organising a postal vote, in theory more citizens get to have their say when election day comes around. Its popularity is also growing in Estonia – 30.5% of participants voted this way in 2015.

Shared, digital identities

Estonia’s e-residency programme is paving the way for other eGovernment services, too. Its Digital ID cards are used for authenticating a lot of public facing records, from tax returns, to property ownership records, government forms and healthcare information.

By having these digital identities stored online, it sidesteps the need to have physical signatures, and physical documents for that matter, enabling everything to be entirely processed online.

These digitised processes are much quicker, more secure, and give public sector bodies greater visibility as to where documents are at any point in time.

>See also: Deciphering the buzz around blockchain

Holding these digital identities online means they can also be shared across public sector bodies on the blockchain. It’s a big benefit for organisations that are dependent on citizen data, and the citizens themselves, as it means that they don’t have to repeatedly share the same data over and over to different bodies – it’s all communally available.

This might be data relating to your address, your employment history, tax information or healthcare records – all data that is useful to governments can be pooled so that all public sector organisations are working from the same data source, and it also means that the data they are working from is the most up to date.

In the tax-office, for example, citizens would be able to grant it access to their bank details, enabling a fully automated tax return.

This wouldn’t kick off a Big Brother type scenario, though. Every individual would be able to share as little or as much data on the blockchain that they would like, giving them control over their own information.

Future of public sector services

While Estonia is pioneering this technology in government, the good news is that the UK is not too far behind – having digitised Gold Bullion, and implementing its Blockchain-as-a service platform on Government Digital Services’ Digital Marketplace. But there is more to be done.

With the UK’s thriving technology scene, new start-up businesses are founded on a daily basis. It’s these start-ups that are the agents of change, particularly in the public sector, and they’re driving innovation across the country.

With a whole host of benefits to be gleaned from blockchain technology in particular, there’ll be more start-up businesses competing with one another, and joining forces with system integrators to develop offerings that fully use this technology for the better. It’s certainly set to be an interesting year ahead!


Sourced by Adele Every, public sector innovation champion at Capgemini

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Nick Ismail

Nick Ismail is a former editor for Information Age (from 2018 to 2022) before moving on to become Global Head of Brand Journalism at HCLTech. He has a particular interest in smart technologies, AI and...

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