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Five ways Blockchain will Transform the Public Sector


The technological revolution has entered into a new stage which, in time, may result in the robotic automation of society.

The requirements for human involvement (and therefore the room for error) in daily life is decreasing exponentially as a result of technologies such as blockchain, which has the potential to automate much of the processes involved in both the business industry and our daily lives. Although it started as a platform to host the Bitcoin digital currency, the blockchain has the potential to disrupt and change entire industries across the world. Some of the hype about the blockchain is the potential for industry savings, with financial institutions reporting savings of between $8-12bn per annum from the use of blockchain (and the by-product lack of need for employees). However, blockchain continues to be an enigma and an unknown quantity in many industries, and this article intends to provide some insight into its potential.

What is Blockchain?

Blockchain is essentially a digital ledger that, using a series of algorithms, identifies and verifies transactions and records the transaction on an irreversible chain of transaction ‘blocks’. Once verifies and recorded, these transactions are immutable and traceable across the entire blockchain network.

One of the fundamental aspects of blockchain is that it is decentralised, there is no central server or administrator, but instead a system of computers, or ‘nodes’. As a result, the processing power needed to overpower the network is at a level not yet thought possible. There is no one point of weakness and the corruption of any one bit of data in the network is distributed network ride, and is thereby identifiable. As a result unauthorised actions are effectively impossible resulting in near-total security from threats.

Blockchain is about more than security

The security of blockchain is one of its primary benefits, but the effects of the network are far more wide-reaching. The decentralised ledger format allows transactions to be recorded transparently and irreversibly, thereby making paper trails redundant. This has the effect of reducing costs as well as improving efficiency, not to mention that the information on the network is irrefutable. By implementing blockchain early, governments and organisations can potentially achieve a competitive advantage. For example, set out below are five ways in which blockchain could be implemented into the public sector:

1. Identification

By digitizing identification documents, blockchain can provide individuals with one single personal identifier, meaning that information such as your birth certificate, your passport and your driver’s licence, can all be available from one single point. This point can be used in your interaction with governments, whether that is through accessing government services, legal disputes, or even voting.

2. Registries

A decentralized ledger is the ideal system in which to store documents previously stored by a central authority – think property deeds, car registration details, medical records, educational records etc. By recording these details on the blockchain, an individual has digital proof that can be accessed and utilised when necessary, such as in litigation. There would be no more need for printing or tracking registered documents, and smart contracts could execute automatically when certain conditions are met. For example, when your driver’s licence or passport expires, the smart contract would notify you of the pending expiration, or even automatically renew the document through your bank account.

3. Payments

Not only can blockchain be used for transactions between financial institutions, but also between individuals and government entities, with the potential benefit of eliminating fraud and tax evasion as a result of built-in transparency and trust protocols. In addition, any payments due by the government, such as social benefits or grants, can also be transacted and verified through the blockchain, allowing them to be verifiable to the public at large.

4. Accountability

Blockchain provides for accountability in all areas of the public sector. All financial transactions can be permanently recorded and traced or, for example, voting records are immutable (thereby eliminating the potential for fraud. Updates to statutes are also recordable, allowing public visibility and ensuring ease of access. The level of transparency allows for a greater level of trust to exist between governments and citizens.

5. Automation

The blockchain allows for a level of streamlining beyond what is currently available. The days of long queues to get your driver’s licence or passports would be over. In addition, especially for areas without access to good public services, utilising the blockchain will mean that access is available to all citizens, no matter where they are.

It appears clear that blockchain has the potential to change society. The above are only a small number of ways in which it can be integrated into public services. However, as it evolves, it is likely that blockchain will become a bigger and bigger part of everyone’s life as they interact with those around them.

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