Source: Sharecast
But in an era of increasing criticism and dismay aimed at global governments, one of the most promising potential applications of blockchain is within the world government agencies.
However, many people are unaware that it’s already happening. Various governments have already tested and implemented blockchain tech in their running of states and organisations.
Whilst blockchain use amongst governments is still in experimental phases; most state organisations are confined to centralised systems. These insecure and limited systems can be completely overhauled through the use of blockchain.
For example, vital government tasks such as verifying identity and confirming transactions could be taken into the future through the benefits of the blockchain.
Today, we’ll dive deeply into the numerous benefits of using blockchain at a government level. We’ll also be exploring real-use cases of blockchain being used by governments, and, most importantly, we’ll be telling you how to invest in blockchain the right way should you wish to do so.
What Is Blockchain And What Does It Do?
Put simply, the blockchain is a decentralised network that is made up of data records or “blocks”. These records and blocks are pretty much incorruptible and cannot be altered by a single person.
The way the blockchain works is as follows: Within each block featured on the chain is an array of records of transactions that have taken place. Whenever a new transaction is added, they are automatically verified, recorded, and added to the overall chain.
All transactions that are recorded on the blockchain are subsequently distributed to the ledger of every person taking part. In turn, this makes it an exceptionally secure system. Let me explain why.
For a cybercriminal to compromise a blockchain, such as through a 51% attack, they would be forced to invest an exceptional amount of money, making it cost-ineffective very quickly.
But, most importantly, this behaviour would require criminals to own most of the blockchain, and, in turn, this would render it largely useless. Put simply, the incentive is simply not there.
Keen to invest in blockchain technology for the future? You’re not alone! However, it’s crucial to do it the right way. Always do your research, understand the volatility of the decentralised financial markets and always use a popular and well-liked crypto exchange or platform such as eToro, Coinbase, or Immediate Edge.
5 Reasons Why Governments Should Use Blockchain Technology
Now, it’s time for the good stuff! This section will delve into the five main reasons why governments should utilise blockchain technology to ensure better governance of their country and its citizens.
At present, the vast majority of global governments are using inefficient, expensive, and less-than-secure centralised systems to operate their countries.
The demand for a new, revolutionary technology that can overhaul current governance systems has been there for decades, and blockchain is here to answer the call.
Blockchain Can Act As a Barrier Against Corruption
Government corruption is a systemic issue in the world we live in. Statistics show that corruption is growing amongst the top trading countries. Corruption leads to instability and prioritising its removal should be a priority.
This is one of the first areas that blockchain can enhance global governance by forming a unique barrier against corruption. Firstly, it has the ability to provide a previously-unseen level of record keeping that is essentially incorruptible.
Secondly, thanks to its decentralised nature, it also allows governments to deploy real-time transparency, auditability and smart-contract functionality as and when it’s needed.
Thirdly, through the use of blockchain, public information can be accessed flawlessly, at any time.
Efficient engagement with a country’s citizens and combating corruption can be achieved by making public information readily accessible and under scrutiny at all times.
Secure Management of ID
Cybercrime is a $6 trillion issue that has skyrocketed in recent years, particularly through a surge in data breaches. Governments are far from immune, largely due to the centralised systems they choose to use.
Successfully safeguarding sensitive data and effectively protecting the identities of their citizens is becoming an increasingly difficult task for global governments.
Through blockchain technology, identity and access management (IAM) can be overhauled through the use of a distributed ledger. Within this decentralised, distributed ledger, citizens would be able to successfully verify their data without risking the security of the data itself.
Reduced Costs And Higher Efficiency
Surging inflation tells us one thing, governments are lacking funds to allocate to numerous public services. Budgeting and managing finances at a government level on outdated centralised systems clearly isn’t working in 2022.
With blockchain, governments can take advantage of consensus algorithms to track all government-level transactions. At the same time, they’ll be able to lower costs and boost levels of efficiency.
By using blockchain for accounting, the entire process is streamlined, and the chances for redundancy are slashed. If a government has any areas that are financially weak, the blockchain can help to identify and audit them.
Transparency In Issuing Grants And Donations
Annually, several governments worldwide distribute millions of dollars worth grants and donations, either to charities, causes, or other governments in need in places such as the third world.
However, the process of issuing these grants and donations is often confusing, inefficient and, unfortunately, corrupt. Naturally, large sums also come with a hefty amount of fees to send them to the recipient.
Not only does blockchain have the ability to make the process more streamlined and transparent, it is also able to simplify the overall distribution and management of these grants and donations, too.
From making the overall process flawless to combating the potential for illicit financial activity, the blockchain can seriously overhaul this major aspect of global governance.
Blockchains Can Be Used In Voting Processes And Election Security
Secure, honest and well-run elections are the backbone of any democratic country. But sadly, a lack of election security is becoming an increasing issue for many people worldwide.
From transparency to incorruptible encryption, the decentralised blockchain has the ability to bring a huge democratic boost to global voting systems.
How Blockchain Tech Can Be Used Governmentally
Now we’ve looked at why blockchain technology should be used by global governments, let’s look at how it can be used efficiently.
The Registration Of Land
When it comes to transparent sectors, real estate certainly isn't one of them. Those seeking to invest in property can expect outdated manual processing systems and a high entry barrier.
With blockchain, the land registry organisations of various governments can overhaul various daily applications such as management of owner registrations, transactions, and more.
In addition, the blockchain can overhaul how we manage property ownership. For example, rather than outdated deeds and documents, a blockchain can create a unique digital token that signifies ownership of a particular property.
When it comes to the high entry barrier to invest in property, which is leading to a shortage of investors and in turn damaging the property market, blockchain can fix this too.
For example, by dividing a property's value into unique, blockchain-based tokens, investors are able to purchase fractions of various properties, rather than invest in the entire thing.
Government Healthcare
In the first world, it’s not uncommon for nations to dedicate a significant amount of their gross domestic product (GDP) towards national healthcare. Take the National Health Service (NHS) in the UK, for example.
However, as we move into the future, social healthcare systems like the NHS are under increasing threat from not only surging costs of healthcare but also from the impact of numerous data breaches in the health sector.
From managing healthcare records securely to unrivalled data management, there is a range of ways that we can implement blockchain into government healthcare.
E-Voting
From the first world to the third world, voting events often draw accusations of bribery, corruption, and other negative attention. It’s not uncommon for votes to be manipulated or disappear altogether.
It’s not hard to see that the current centralised voting system is outdated, problematic, and exposed to numerous security concerns. But can blockchain fix this? It sure can!
Through blockchain, countries will be given the ability to construct a digital voting system that is secure, streamlined, and incorruptible. All votes would be verified, processed, and recorded by the unbiased nature of the blockchain itself.
Of course, through the blockchain, these wouldn’t be conventional paper votes. Instead, they would be e-votes. Rather than a traditional paper ballot, e-voting would see e-voting machines introduced that would subsequently record the inputted data on the blockchain.
And if political rivals or shady parties wanted to interfere with democracy, they would have a serious task ahead of them. In fact, it would be impossible to take down a blockchain-based voting system as, unlike the current centralised methods, it doesn’t exist in one single location and neither is it controlled by one person.
And then there is the issue of speed. Remember the enormous delays of the recent U.S. presidential election? Despite being a world superpower, the U.S. was unable to overcome logistical errors and significant delays of postal votes. Blockchain voting systems would be verified in a matter of seconds.
Blockchain in Government: Real World Applications
Now, we’ve covered how and why blockchain can be used by global governments. It's time to see some exciting real-world applications of blockchain technology being used worldwide.
In 2022, the blockchain has moved far beyond the realm of cryptocurrencies. There is an abundance of real-world examples of its use in a range of other industries.
For example, in 2018 alone, more than 17 countries introduced decentralized legislation systems to the governance of their nation. But that’s far from all!
The Chinese Digital Yuan
China might have been a little harsh on cryptocurrency lately, but the Chinese state is very much pro-blockchain. This was personified in the Chinese state establishing a Digital Yuan currency.
The end goal of this digital Yuan is to eventually replace the paper cash currently in circulation. After all, the Republic of China is largely seen to be one of the most advanced countries on earth when it comes to cashless payment systems.
Enhanced Document Control in Estonia
The Baltic state of Estonia has become a major business and tech hub in recent years. This is largely thanks to the Estonian government having one of the most open-minded and tech-friendly governments in the world.
Estonia was one of the earliest countries to get involved in blockchain at a national level. This interest paid off in the form of the e-Estonia project.
Using a distributed ledger, the e-Estonia project functions as a sensitive document storage system that integrates all Estonian government services and ensures that all of the country’s citizens are able to access them flawlessly.
Smart Contracts in the Isle of Man
One of the most unassuming blockchain integrations has taken place on the Isle of Man which is situated between England and Ireland. In this semi-independent state, the local authorities have begun utilising smart contracts for the national lottery.
Whenever somebody buys a lottery ticket on the Isle of Man, randomised lottery numbers are issued. Whenever a buyer wins, their payout is instant and automatic.
E-voting Systems in Denmark
The Liberal Alliance party of Denmark has already begun to utilise an e-voting system based on blockchain technology.
As previously discussed, this e-voting system provides the party with a secure, flawless, and verifiable platform to hold honest elections.
In turn, Danish citizens are given better access to the voting system which subsequently contributes to public welfare.
Digital currency in Venezuela
And last but not least is Venezuela. This South American country is one of the first governments in the world to implement a digital currency, called the petro, in the country.
As a result of brutal hyperinflation and U.S. sanctions placed on the country, the original fiat currency of Venezuela had been rendered virtually worthless. The country’s dire economic status has been lifted to a degree thanks to the introduction of the Petro currency. In order to fight against the gruelling fiat inflation, many Venezualans have turned to blockchain-based cryptocurrencies.
What Does The Future Hold?
Around the world, general trust in the government is at an all-time low. In order for governments to regain the trust of their citizens, blockchain technology will need to be implemented. Despite this argument, the implementation of blockchain technology at a government level is still in the early phases.
From better data management and boosted security to replacing outdated systems and removing the need for environmentally damaging and unnecessary documentation, blockchain certainly has the power to overhaul the way governments operate for the better.