Governance 2.0: Government Services on the Blockchain

blockchain government

Bitcoin has the potential to completely change the way we interact with our government. In this article I will discussĀ  how embracing the blockchain could benefit government services and in turn, the people.

 

Introduction

Bitcoin has disrupted the financial model and stands to change the way we track and enable financial transactions. But bitcoin is so much more than just an alternative to currency, it’s underlying technology, called the Blockchain could be used to track more than just financial transactions.

 

The Blockchain is essentially an immutable shared ledger, every transaction is recorded and can be tracked. This can be used to streamline a host of services in government and the wider economy. Cryptocurrency has shown lots of promise in it’s early days and we could see significant improvements in efficiency, our government should already be exploring the benefits of this technology.

 

Blockchain Technology Explained

A blockchain is a form of shared ledger technology with is completely decentralized, meaning, no single central authority controls it. It can be used as a database to track financial, physical or electronic assets: a unit of currency, motor vehicle registrations or a companies stock are all good examples.

 

Bitcoin is a great example of cryptocurrency being used to track a unit of currency. Since it’s launch in 2008, Bitcoin has proved it’s technology is reliable and efficient. Even more efficient than many of the systems currently in place. Blockchains could allow for some major improvements in government services in the future.

 

Smart Contracts: Applying Bitcoin’s Promise

If the blockchain is the ledger, a smart contract is the application layer that interacts with the user to edit the ledger. Conventional contracts rely on human interaction to input information. A smart contract works on predetermined rules and will only execute a change when these conditions are met.

 

Traditional contracts may work when executing a simple transaction, but what if the transaction is more complex? For instance, updating a change of address for a citizen on multiple government databases simultaneously. This process can be automated as the smart contract will interact directly with the code, this insures privacy protection and ensures correctness in an automated, immediate manner.

 

smart contracts[Credit: Slideshare]

How does a smart contract work?

Wikipedia defines a smart contract as follows: “Smart contracts are computer protocols that facilitate, verify, or enforce the negotiation or performance of a contract, or that make a contractual clause unnecessary.” Essentially smart contracts are the code that interact directly with the invested parties and the blockchain.

 

In a correctly set-up eco-system, this means there is no single point of control or failure. The code will ensure that is a change to the ledger meets the predetermined rules.Smart contracts can substitute and automate legal contracts insuring no malpractice or errors occur from any of the participants. They are a set of instructions which govern the workflow of a transaction.

 

The Future: Government 2.0

 

You could say the main role of government is to appropriate the distribution of resources among the countries citizen’s. This goes beyond physical assets such as money and property to include intangibles such as security, order and welfare. Also the way the rules government are chosen. In our current democratic system, this distribution takes place in a centralized way. Meaning it is more remote from the citizen.

 

The collection of taxation and implementation of services becomes very costly and inefficient when done in this way. This is mainly due to the large and complex nature of these systems. What if we could decentralize many of these services and at the same time ensure security, privacy and bring back more power to the people?

 

The private sector has already started to realize that in this digital age there are decentralized solutions which are more cost efficient. Governments should start to realize that citizens have come to expect that they evolve to meet these needs.

blockchain government[credit: Linkedin]

Conclusion

 

Imagine a world without stealing, corruption and fraud by our own governments. This world is not as far fetched as you may think. Imagine cryptocurrency was the sole legal tender and all government services were run and stored on the blockchain. Gone would be the days of the president paying for his new house to be built at hugely inflated costs.

 

Imagine a more transparent government was more accountable to it’s citizen’s, where bad actors are no longer able to have control. Imagine a true democracy, where every individuals voice is as powerful as the next. This is the promise of blockchain, and the future is bright.

So what do you think? Are there benefits in replacing government run services with blockchain protocol?

 

Case studies and further reading:

Bitnation.co: Government services on the blockchain

Estonia: The world leader in digital government

Coindesk: UK Government Tials Welfare Payment System

 

 

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About the author

Shane Maguire

Bitcoin enthusiast, have been trading and following Bitcoin since 2012. Director at 45ive Media, a small digital marketing agency based in Margate, South Africa.

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