Building trust and destroying bureaucracy with blockchain for government

Building trust and destroying bureaucracy with blockchain for government

Blockchain News
June 14, 2022 by Diana Ambolis
1040
Blockchain for governments could be a useful tool to be as open, transparent, and collaborative as possible in order to generate trust. They are attempting to streamline citizen engagement, financial processes, and contract administration in order to eliminate bureaucracy. On these counts, they frequently fall short of their own objectives. In a recent IBV study
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Blockchain for governments could be a useful tool to be as open, transparent, and collaborative as possible in order to generate trust. They are attempting to streamline citizen engagement, financial processes, and contract administration in order to eliminate bureaucracy. On these counts, they frequently fall short of their own objectives.

In a recent IBV study titled “Building Trust in Government: Exploring the Potential of Blockchain for Government,” 200 government executives from 16 countries were polled on their experiences with blockchain and their hopes for the technology. According to the findings, this technology has the potential to address the issues of trust and bureaucracy head-on. Researchers discovered that a substantial number of trailblazing countries are undertaking programs to alter regulatory compliance, contract administration, identity management, and citizen services using blockchain.

Blockchain presents a novel way to improve transparency and collaboration between governments, businesses, and individuals. The quest for transparency and the right to privacy do not have to be at odds with registering assets and tracking ownership changes on a distributed shared ledger. Important information can be broadly disseminated in a seamless manner, fostering true transparency. The ability to verify transactions in near-real-time and the widespread use of privacy services make fraud and cybercrime extremely difficult. Smart contracts will always execute once they have been vetted and deployed. Reneging on a contract is no longer an option. All of this contributes to increased transparency, trust, and the reduction of bureaucracy between government, business, and citizens.

The assumption that distributed ledgers will eliminate the innovation frictions mentioned in the recent IBV report “Fast forward: Rethinking firms, ecosystems, and economies with blockchain” is a recurring theme raised by the trailblazers.

Let’s look at how blockchain for government might address and fix these three innovation frictions’ underlying challenges and roadblocks.

Governments are responsible for developing, updating, and enforcing regulations that frequently cross-departmental and national boundaries. They can be automatically enforced once consensus has been agreed upon and deployed as smart contracts on the blockchain.

Consensus – All essential departments (including cross-border, if necessary) would agree on the creation, deployment, and subsequent revisions of regulations.
Provenance –  A complete audit trail of regulation formulation and revisions, as well as whose agencies approved them, would be available.
Immutability – No one could interfere with the change agreement procedure or amend the regulations once they were adopted.
Finality – Disputes over regulations would be eliminated or addressed much more quickly.

Governments are frequently slowed by bureaucracy. Blockchain by government may help in reducing friction in crucial citizen transactions like transferring automobile or property ownership, blockchain can assist overcome institutional inertia. Consider the following scenario:

Consensus – When a change of ownership is valid, all relevant organizations — both within and outside government.
Provenance – There is a detailed audit trail that shows who possessed what and when.
Immutability – Once the ownership record has been agreed upon and committed to the distributed ledger, no one can change it.
Finality – When asset ownership issues do arise, they will be virtually eliminated and resolved considerably more quickly.

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Governments well understand the consequences of unseen dangers such as fraud and cybersecurity. Blockchain by government is intrinsically more secure than traditional transaction processing systems due to their extensive usage of privacy services.

Consensus – The network is more resistant to cybercrime and fraud since all business network members must consent to any transaction.
Provenance – If a network member has a problem, the whole history of transactions makes problem isolation and forensic examination easier.
Immutability – It’s hard to tamper with the blockchain’s history of truth since privacy services are utilized to link blocks of transactions together.
Finality – The threat resilience of citizen, government, and commercial transactions is improved by having a single tamper-proof, complete, and duplicated system of record.