Blockchain in Goverment
Blockchain is a new stage in the evolution of human life. It can be used everywhere, in all areas of the economy and social life. Even in government and in schools. At the moment, not all of its benefits are disclosed.
The blockchain technology was perceived as a single entity with Bitcoin for a long time. That was considered something less promising and unsafe until recently. However, with the advent of understanding to the person that the blockchain is “new Internet”, its popularity began to grow.
There is no need for a deep understanding of the work of blockchain technology. And without this knowledge, you can fully use it, as well as, for example, the Internet or TV. However, the presence of the most basic knowledge about this new, so far, technology will provide an opportunity to comprehend all its pros and cons, to understand why it can be useful in all sectors of our life.
Initially, the blockchain was used as a tool for conducting transactions using electronic currency (cryptocurrency), and now it has evolved, since it received a new purpose, which is to use the potentials outside the cryptocurrency.
Important advantages of the most probable use of the blockchain in the government sector are security, system consistency, and transparency.
By providing a “bridgehead” for decentralized forms of management and “smart contracts”, while significantly reducing the likelihood of creating and successfully conducting fraudulent and corrupt schemes, an innovative technology can contribute to successfully safeguarding public (state) interests and state security.
“Blockchain is an eternal digital distributed economic transaction journal that can be programmed to record not only financial transactions, but practically everything that has value and meaning,” Don & Alex Tapscott, authors of the famous book Blockchain Revolution (2016) .
In 2016, the international analytical center Gartner published a forecast up to 2020 in which 10 leading trends in the economy and in the world were presented. Among all the trends, an honorable place was given to the blockchain technology, which has the potential to change the system of the world economy. Gartner also predicts that by 2020 the capital turnover of the business, which is based on the blockchain technology, will be more than 9.9 billion dollars.
You should not go far, just look at the ICBC and CBA. Two large state-owned banks of China and Australia, respectively, use the blockchain for different purposes. A patent application for a study of the blockchain technology by ICBC Bank was filed with SIPO at the end of 2017 and was published at the end of the first quarter of 2018. For ICBC, this was the first patent application mentioning the introduction of blockchain technology into the life of the bank.
More recently, official information from the CSIRO has appeared that the State Bank of Australia (CBA) is testing the use of a special token by citizens with limited ability to work. This startup is created in close cooperation with Data61, the leading blockchain organization in Australia.
With the help of the ICBC blockchain, they are trying to eliminate such urgent problems as falsification of documents, lack of legal documents on their hands. All important documents (registration certificate, birth certificate) will be stored in a decentralized environment, it will be impossible to rewrite them or erase them.
Automation of such state procedures will be carried out, the main purpose of which is to make legally significant entries in certain registers showing civil status, property rights, and state of health, confirming the efficiency of the subjects. To receive such documents several times will no longer be necessary, since you will definitely not lose them. Thus, the use of blockchain technology will make it possible to catch two birds with one stone: eliminate the falsification of documents and receive documents once in a lifetime.
Australian bank CBA has other goals. Having created a special token and having introduced the blockchain technology to the bank, they plan to track all actions of disabled citizens with money. Thus, the use of blockchain technology will make it possible to abandon paperwork, and also make it impossible to launder money through the insurance system. If it is necessary, this technology can be used in those companies that need to optimize their activities.
At the end of 2016, the US Federal Reserve submitted a report on successful work on the introduction of blockchain technology, the main task of which is to operate a bank and monitor ongoing transactions. The report was compiled by several people: a member of the Federal Reserve System and the authorized people of two federal reserve banks - New York and Chicago.
To begin, each of us needs to realize that modern elections have many flaws that slowly reduce their credibility as a part of a democratic society.
Mass falsifications of elections or voting take place everywhere due to the intervention of hackers or influential personalities in this process. For the sake of example, there is no need to go far again - the 2016 presidential election in the United States, when it was announced about the vote buying and multiple voting at different polling stations, voting of dead people and more serious things.
Back in 2015, in the USA, it was proposed to transfer the old election system to blockchain technology. Blockchain Technologies, a US organization specializing in working with blockchains, dealt with this problem. The new system has performed well in the elections in Texas, has caused a lot of positive feedback.
The system worked like this:
1. Voters fill in their usual newsletter, however, provided with a special ID for voting in the form of a QR code.
2. Upon delivery of the bulletin, a special machine read the code and passed the blocks to the candidate for whom the person voted.
However, as we remember, in the presidential elections in the USA it was not used, which resulted in big political scandals.
The introduction of blockchain technology will firmly eradicate these problems associated with the falsification of voting results. Through the use of the new voting system, the efficiency and credibility of the elections will be increased. All voices will be captured in the system, their re-use will be impossible, change them or erase also will be impossible. Due to the high security of the system against external threats, it is difficult to crack it.
At the moment, two startups are engaged in the creation of such a voting system - Follow My Vote and Polys. According to some forecasts, such voting systems will begin to be widely used in 2019-2020.
However, it is worth noting that this year elections were held in Sierra Leone using the blockchain. His main task was to calculate the voting results with which he did an excellent job. More than 60% of the citizens of the African state came to the polls, which is quite a lot. The technology for voting was ordered from startup Agora.
The highlight of these elections was that the entire voting process was anonymous, but the data on the votes remained in the blockchain, so the file on their distribution after the voting was completed could be downloaded. This innovation made it possible to make the elections transparent and cheaper.
Since 2014, the Danish party Liberal Alliance has been using the blockchain at the annual meeting of party members to count the votes.
Since 2016, the blockchain service for voting E-vox has been developed in Kiev. The system guarantees the integrity of the voting results at all levels.
The system of personal identification is very important for each state today. Without it, a person becomes practically limited in his actions before him.
According to the international analytical center, every sixth person has no legal evidence of identification, most often these are refugees and children. The absence of such documents creates enormous problems around refugees, especially in EU countries, and also contributes to the sale of children.
Today, the identification system has many drawbacks. Physical recognition methods are often not suitable for remote verification. Usually the identification process requires the presence of a person, and this slows down the process itself.
The new identification system will have a number of undeniable advantages, for example, when it is necessary to transfer lightning data of a person from one corner of the Earth to another or when it is necessary to detect fake documents.
And now a life example. You have lost your identity card or have it stolen while you are making a new one, your stolen certificate is active and can be used in other countries. Financial institutions are not immediately aware of the abolition of identity management. Blockchain will help speed up this process several times through the use of smart contracts.
Most likely the solution to this problem will be the integration of blockchain technology and a biometric data system. This will increase the speed of the search for criminals, minimize the number of false documents (passports, ID-cards), speed up the process of crossing the border and check data in various organizations.
“Digital ID” enables non-residents to remotely register companies in Estonia, use online banking and put electronic signatures. According to experts, this will attract new investors into the country with new capital.
They also conduct testing with the issuance of digital identity cardsin India. With their help, it will be possible to take part in elections, withdraw and send money inside the bank, fill out declarations, register any property.
Digital ID cards are issued and issued in one place, so the information is in one place. To maximize data protection, the government will create new protocols and control standards to ensure maximum security.
It is worth recalling that Microsoft, together with the United Nations and ID2020, are developing an identification system for refugees and children. A new mechanism will be created for registering new data, storing it and interacting with various departments and services in a decentralized environment. Successful creation of such an environment will facilitate interaction with refugees and become an obstacle to the sale of children.
While states are afraid of losing income associated with cryptocurrencies, they are losing something more because of financial fraud.
Every year, only in the EU countries tax services lose billions of euros due to the well-known corruption scheme, when, according to documents, goods pass through various organizations several times.
Creating a digital environment with the help of the blockchain, where all actions will be captured with all the goods and services sold, it will be possible to link all the information in one chain without the possibility of changing its structure. Such a data construction strategy will make it possible to much more successfully verify the payment of taxes, detect various schemes of frauds.
In addition, the blockchain does not require the time that is now needed to process information, the time for this process will be reduced at least 10 times, and smart contracts can replace manual internal processes.
The blockchain embedded in the tax system automatically reduces the time needed to process tax returns, makes the system transparent, optimizes tax operations within firms and provides governments with a constant flow of tax revenues with the lowest possible percentage of losses.
The introduction of blockchain technology into the US tax system was thought back in the first quarter of 2017, when the DC Blockchain Summit was held in Washington.After this congress, Sage Communications made a serious offer to integrate the blockchain into the entire tax system. All parties agreed that the introduction of blockchain technology is vital, since the modern tax accounting system is very slow and inefficient.
Sage Communications offered to use its new development benefits of blockchain in retail system. They are confident that this will significantly speed up the tax process, will provide an opportunity to receive reports to special authorities in real time, as much as possible reducing the likelihood of an error and the need for an audit.
It should be noted that attempts to create national cryptocurrencies have already taken place. In Russia it was a crypto-ruble, in Venezuela - Petro, in Estonia - Estcoin.
The use of the blockchain in this service sector will provide an opportunity to reduce the percentage of frauds with land and real estate .This will ensure the transparency of all actions with real estate, as well as attract new investors. All parties involved - banks, governments, brokers, buyers and sellers will be able to track the progress of the contract after its completion. This will provide an opportunity to instantly confirm the authenticity of transactions.
Benefits for the population are obvious: instant paperwork;eliminating the need to re-apply as documents cannot be lost or damaged; the ability to quickly check the status of contributions of the developer and the status of their documents.
The introduction of blockchain technology into state-owned industries is an irreversible process. It is worth remembering the attitude of states to the blockchain a couple of years ago and look at what is happening now.
The introduction of the blockchain into government industries brings a huge mass of positive opportunities, because systems based on the blockchain are many times superior to modern systems that have many vulnerabilities.
So, analyzing all of the above and comparing it with the modern ways of development of various spheres of life, we can safely say that today an adequate solution to current problems is based on correcting the imperfections of existing systems; this can be corrected by introducing the blockchain.
Dubai is going to become the first government based on the blockchain technology in order to thus reduce the cost of maintaining the state apparatus.
The UAE has launched the Blockchain 2021 program, following which the state is going to occupy the first niche in the world in introducing innovative technologies.
Has not bypassed the blockchain and Ukraine. The government plans to use the blockchain in the electronic trading system of seized property and in the state register of real estate (IDX) property rights. Having summarized all the results, we can confidently say that the blockchain is the future, the introduction and adoption of which is just a matter of time.