Some people are dubbing blockchain technology as the most significant invention since the internet came into existence and there is a lot of truth to this statement.
There is a myriad of benefits that can be obtained through the proper usage of blockchain technology, and that is why we find that even the public sector is willing to adopt the technology today.
In this article, we’ll explore how everyone benefits from this seemingly reliable and transparent form of “record keeping.”
Blockchain in a Nutshell
In a nutshell, it can be considered an understatement to explain how blockchain technology works because the inner workings can get technical quickly.
However, here is a simple illustration.
In the past, whenever we had to collaborate on a document, we had to send it back and forth. However, with the advent of cloud technology, it’s possible to work on just one common file and have the changes simultaneously saved.
Blockchain technology works on the same rudimentary premise, but with several features that truly make it remarkable.
Let’s say you’ve requested for a transaction; it can be a contract or something of monetary value. This request will then be sent to an extensive network of computers which validate the transaction using algorithms, and once the operation has been verified it is added to the existing blockchain for permanent record keeping.
- The database is fully distributed amongst the network of computers.
- It has no singular point of failure since there are multiple “nodes” contributing to the chain.
- It cannot be controlled by a singular entity. Therefore, it’s decentralized.
- It is transparent.
Imagine having a permanent, decentralized, and transparent record that is not stored in one location. This makes contracts, exchanging, and trading so much safer than the current methods that we have in place.
Bitcoin, Blockchain, and the Governmental Response
From the benefits discussed above, a lot of people would be surprised that governments were not the first entities adopting the technology given the myriad of benefits that came with it. However, it was not always the case in the beginning.
We have to come to terms with the fact that blockchain technology isn’t exactly something that can be adopted overnight due to the many intricacies and technicalities that are associated with it.
The most popular application of blockchain technology is cryptocurrency and amongst the stars of the show is Bitcoin, which has had its fair share of love and hate from many governments.
Cryptocurrency in itself has been given a lot of media attention due to the potential of many complications and fears that arose. The talk about decentralized currency and anonymity has caused some governments to become skeptical since there could be a use for money laundering and illegal activities.
Countries like Vietnam, Bangladesh, Morocco, Nepal, Israel, Brazil, Algeria, Bolivia, Ecuador, Kyrgyzstan, China, and Indonesia all have some form of restriction on the application of cryptocurrency.
Some, such as Israel, are a little more welcoming than others with a few alterations and restrictions, while others such as Bolivia have stricter policies banning it altogether.
The Future of Blockchain Technology in
Governments and the Public Sector
Imagine an election system that would be impossible to cheat because it is decentralized. There is no singular point of weakness, and you can maintain transparency easily. This seems like the future is here because it can be achieved with blockchain technology.
What could this mean for the ordinary citizen?
The fear of vote rigging and election fraud could soon be a thing of the past. Verification could be done instantaneously and combined with a decentralized national ID system we could see genuinely democratic elections taking place.
Gibraltar is one of the first countries to have a blockchain exchange, and it is also on the race to be the hub of global fintech industries. The government has also allowed blockchains to be used as conduits for digital assets storage.
National IDs, Paperwork and the Like
Estonia has been trying to adopt blockchain technology since 2008 and has been implementing a national identification system that is based on blockchains. This means that the bureaucracy and lag time associated with paperwork having to be filed reduced significantly.
However, it isn’t just that. The security that comes with blockchain technology also means that the amount of cases of identity theft is also kept at the minimum and this is great for preserving the privacy of the citizens of a country.
Dubai is not a stranger to technological innovations. It’s currently trying to cement itself as an entirely paperless government through the use of blockchain technology. The estimated savings will be in the range of one and a half billion dollars if this pushes through.
This means that everything from visa applications to license renewals are being seen to be achieved through the extensive use of blockchain.
Organizational Decision Making
Companies function better if there are methods of transparency and accountability that are put into place. Blockchain facilitates a proper decision-making system in which every decision from the top level is accounted for.
The other great thing about this is that it significantly increases the security of the documentation of changes that are being made in a company-wide setting.
Feedback systems also become more efficient in this process.
Obviously with all the factors that we have discussed above, one of the most significant advancements will be in the field of contracts. The permanent, decentralized record keeping system will make sure that every single alteration and signatory party will have a secure and possibly binding record on a blockchain system.
Imagine a genuinely secure contract-making system where forgery is almost next to nonexistent— given the algorithm that has been put into motion.
If put into effect on a universal level, it would truly revolutionize the way we perceive intellectual property contracts, financial transactions on an institutional level and even simple legal documents.
Many of the world’s governments can genuinely benefit from the numerous advantages that blockchain technology offers. There are plenty of examples of significant institutions adopting the technology, and it might indeed be the next biggest thing after the explosion of the internet.