By David Haimes, Senior Director of ERP Development, Oracle
At the UN General Assembly in New York last month, Nigerian President Muhammadu Buhari pleaded with his international peers to help fight corruption, which he said is an extreme threat to stability, peace, and economic security for millions of people in developing nations like his. Much of the corruption in Nigeria is tied to illicit financial flows, Buhari noted.
During the same week, the Columbus, Ohio, suburb of Dublin (population 42,346) was reviewing proposals for its history-making plan to become one of the first US cities to have a blockchain-based identity system for citizens. One discussed use is voting and monitoring of voting.
Viewed together, these examples illustrate the widespread opportunity for blockchain to improve accountability in the public sector at all levels and in many vital functions, whether the organization in need is an emerging nation with complex problems or a small town that wants to be more open, efficient, and innovative.
Blockchain, also known as distributed ledger, is a type of software that documents and couples user identity and transactions, and creates linked blocks of those records so that anyone participating in the chain of transactions has visibility into all activities. Potential government applications include:
In the case of something like voting that requires anonymity, voters would be identified by a digital key, which means records are documented on the blockchain anonymously. The digital key concept is how digital currency is “owned.”
The pure transparency and indisputable record of activity that blockchain provides can help prevent public corruption. Essentially, when transactions such as paying taxes, transferring money, and voting happen in a blockchain, a linked community of watchdogs is automatically created. It’s like having access to public records without having to go to a public facility to monitor them as activities are recorded.
Blockchain also provides data-security benefits and works in real time, which improves a government agency’s ability to protect public data and keep records current. Access to a blockchain requires a digital key, and activity within the chain is documented immediately.
Governments in emerging markets in Asia, Africa, and the Middle East are hot spots for blockchain at the national level because they are building up digital infrastructure for the first time. Because they don’t have embedded hardware and software systems as developed governments do, they can be faster with adoption. For these countries, blockchain could be a way to accelerate their emergence in the global economy.
Qatar has committed to becoming an entirely blockchain-based government by 2020, and the country already is creating blockchain-based apps for citizens to access information such as food origin. Nigeria is considering different applications of blockchain, including using Oracle Blockchain Cloud to enhance customs-services operations.
For developed countries and their regional and local counterparts, blockchain adoption will happen where it makes the most sense. If a digital system is in place and working well, government leaders probably won’t run out and replace it just to say they are using blockchain. If a digital system is in place but is not functioning well, is not secure, or is lacking a reliable checks-and-balances capability, blockchain-based applications could be the answer.
One area that’s certain to be of interest is identity management. Right now, different public groups issue different forms of identify to prove citizenship or privileges, such as a state driver’s license, a federal health-services card, and a city ID for using city-owned amenities. That’s a lot of redundancy and multiple opportunities for fraud. Blockchain makes it possible to maintain one secure version of identity verification.
Another aspect of government accountability regarding blockchain is economic development and empowerment. Blockchain is a transformational technology. It will forever change the way goods and services are delivered and exchanged, how markets and money transfers are regulated, how contracts are established, as well as many other aspects of doing business around the globe.
Governments should embrace opportunities to attract and build blockchain knowledge in their communities and should use blockchain to make it easier to do business with and within their communities. Lots of large, public companies are investing in blockchain initiatives, but small, local governments such as Dublin, Ohio, are investing in blockchain, too.
Gartner estimates blockchain’s business value-add will grow to just over $360 billion by 2026, and then surge to $310 trillion by 2030. Even though widespread adoption is years away, blockchain technology is easy to access and use today. Why not get started now? Not only will your government agency be preparing for tomorrow, but you will also be an early adopter of what’s sure to be a much more accountable era in public governance.
On Wednesday, Oct. 24, I’ll be presenting other use cases for blockchain applications as part of Oracle OpenWorld 2018. If you’re planning to come to OpenWorld, I invite you to attend.