blockchain-in-government

Blockchain in Government: Blockchain Use Cases in the Government

Like other major companies, governments have difficulty coordinating processes among various stakeholders. On the other hand, governments need to give greater transparency, impartiality, and accountability to the public than most other institutions. Data management is a major difficulty that government entities must surmount to succeed in these undertakings, particularly in the digital era.

Regrettably, traditional centralized data management systems are inadequate to tackle governmental issues. The single point of failure in the traditional client-server approach compromises data security, and transparency is difficult to achieve if government databases are centralized. The result gets delayed, inefficient, and opaque operations for everything from property title registration to voting for most governments.

That result is part of the reason government entities are not as timely and efficient as anyone would like.

Because blockchain ensures high service availability and data integrity, any industry that relies on a trusted third party or requires a solid guarantee of security and governments around the world should consider using blockchain solutions.

This research looks at how blockchain can help with some of the most pressing concerns in government services.

What Blockchain can do in the Government

Blockchain technology ensures that every copy of data is always accessible, verifiable, and trustworthy. In terms of data dispersion, it works similarly to an old photocopying machine in that it can make copies of any object available to everyone who uses it. Moreover, it functions more like a notary public in terms of the trust, ensuring that any copy of data is genuine and that the copies cannot be forgotten or counterfeited. Finally, it works like a general ledger in transaction processing, requiring transactions to get recorded in the same order.

A set of replicated servers known as nodes gets used in handling data exchange, transaction processing, and validation. Each node uses a consensus mechanism to reach an agreement with all other nodes regarding a particular transaction without the need for human intervention.

The primary purpose of such a system is to leverage replication to offer security, notably availability and integrity, while also allowing distributed servers to act as a centralized decision-maker.

Blockchain Use Cases in the Government

The main use cases show how to use blockchain technology to remedy flaws in current government processes. These use cases also emphasize the significance of a multi-faceted and complete approach to blockchain-based governance.

They frequently mention important restrictions and drawbacks to using this unique technology. While technology improvements may help overcome these restrictions, governments must assess the costs and benefits of blockchain-based governance systems.

Here are some of the most notable blockchain use cases in the government.

Land Title Registries

Several governments have begun experimenting with land title registers based on blockchain technology. Some initiatives, such as those in Sweden, are driven to improve efficiency in a transaction-heavy business. Others, such as those in Honduras and India, are working to strengthen property rights and increase transparency in a process that is prone to corruption.

Individuals might verify their land rights via blockchain-based land registries, safe, decentralized, publicly verifiable, and unchangeable records. These characteristics decrease the potential for self-interested land rights manipulation and strengthen the overall resilience of land ownership.

Government Contracting or Public Procurement

Government contracting, also known as public procurement, is the world’s largest marketplace for government spending and the leading source of official corruption. This government process is a hotbed of corruption in high-income and low-income countries due to various causes.

Vendor selection is a complicated and opaque process that requires a great deal of human judgment. These inefficiencies waste a lot of money, distort market prices, impede healthy competition, and frequently result in inferior goods and useless services.

By facilitating third-party oversight of tamper-evident transactions and enabling greater objectivity and uniformity through automated smart contracts, a blockchain-based process can directly address procurement’s corruption-risk factors, improving the transparency and accountability of transactions and actors.

Electronic Voting

Concerns about election security, voter registration integrity, poll accessibility, and voter turnout have prompted countries to look into blockchain-based voting platforms as a way to boost trust and participation in critical democratic processes.

In this regard, the decentralized, transparent, immutable, and encrypted properties could help reduce election interference and increase poll accessibility.

Registries of Beneficial Corporate Ownership

Concerns over opaque or undeclared beneficial company ownership have risen in the wake of recent corruption scandals worldwide. As it stands right now, anyone with the right connections and enough money can use gray-area firms for laundering money, bribing individuals, or lobbying government officials in an illegal way.

To better track conflicts of interest and illegal conduct, many governments are beginning to build a central registry for beneficial business ownership. Blockchain-based registries that are tamper-proof and widely accessible could provide much-needed transparency and disclosure.

Critical Infrastructures such as the Energy Sector

Energy, food and agriculture, and transportation are among the 16 key infrastructures identified by the US Department of Homeland Security. Moreover, security and resilience establish a national policy to strengthen and sustain secure, functional, and resilient critical infrastructure.

The application of blockchain in critical infrastructures has gotten extensively researched due to the nature of critical infrastructures. Other disciplines, like the energy sector, are under study by governments worldwide, in addition to the financial and healthcare industries, which are both considered essential infrastructures. For example, to establish the “Energy Internet,” the Department of Energy has granted various projects to industry and academia.

The goal is to provide an advanced management system for distributed energy resources that will enable peer-to-peer communication that is quick, scalable, and secure.

Ultimately, the energy sector can use blockchain in various ways, from energy trade to IoT device management and energy resource management.

Conclusion

Blockchains have progressed beyond cryptocurrencies to serve a broader purpose that you may apply to a wide range of applications, especially those that require high service availability and data integrity.

Nevertheless, blockchain has valuable properties, notably tamper-evident and permanent databases and record-keeping, that could improve transparency, accountability, and public engagement in sectors that significantly impact democratic governance and global development.

Lear More From The Book Blockchain Business Models

blockchain-business-models

Read Next: EthereumBlockchain Business Models Framework Decentralized FinanceBlockchain EconomicsBitcoin.

Read Also: Proof-of-stakeProof-of-workBlockchainERC-20DAONFT.

Other Commercial Applications On Top Of The Blockchain

DeFi

decentralized-finance-defi
Decentralized finance (DeFi) refers to an ecosystem of financial products that do not rely on traditional financial intermediaries such as banks and exchanges. Central to the success of decentralized finance is smart contracts, which are deployed on Ethereum (contracts that two parties can deploy without an intermediary). DeFi also gave rise to dApps (decentralized apps), giving developers the ability to build applications on top of the Ethereum blockchain.

Tokenization

erc-20-token
An ERC-20 Token stands for “Ethereum Request for Comments,” which is a standard built on top of Ethereum to enable other tokens to be issued. Based on a smart contract that determines its rules, the ERC-20 enables anyone to issue tokens on top of Ethereum. As they are using a standard, those are interoperable. ERC-20 Tokens are critical to understanding the development of Ethereum as a business platform.

Decentralized Autonomous Organizations

decentralized-autonomous-organization
A decentralized autonomous organization (DAO) operates autonomously on blockchain protocol under rules governed by smart contracts. DAO is among the most important innovations that Blockchain has brought to the business world, which can create “super entities” or large entities that do not have a central authority but are instead managed in a decentralized manner.

NFTs

non-fungible-tokens
Non-fungible tokens (NFTs) are cryptographic tokens that represent something unique. Non-fungible assets are those that are not mutually interchangeable. Non-fungible tokens contain identifying information that makes them unique. Unlike Bitcoin – which has a supply of 21 million identical coins – they cannot be exchanged like for like.

Sharding

sharding
Blockchain companies use sharding to partition databases and increase scalability, allowing them to process more transactions per second. Sharding is a key mechanism underneath the Ethereum Blockchain and one of its critical components. Indeed, sharding enables Blockchain protocols to overcome the Scalability Trilemma (as a Blockchain grows, it stays scalable, secure, and decentralized).

Staking

proof-of-stake
A Proof of Stake (PoS) is a form of consensus algorithm used to achieve agreement across a distributed network. As such it is, together with Proof of Work, among the key consensus algorithms for Blockchain protocols (like Ethereum’s Casper protocol). Proof of Stake has the advantage of the security, reduced risk of centralization, and energy efficiency.

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