Reimagining government and governance with blockchain technology

We live in a world where a mix of paper and digital records enables access to services, opportunities and benefits. This hybrid state has resulted from a long process of digital transformation, from scanned digital versions of paper documents to the creation and management of digital records. The deliver of governance through access to citizen services, benefits and platforms use these hybrid credentials to identify and authenticate individuals. This experience is now so ubiquitous that we often miss the challenges presented by the model - of documents which are misplaced, defaced, forged or are out of date. The creates a situation where there is a deficit of trust in the documents originating from low assurance level. This deficit of trust makes it expensive and cumbersome to provide the necessary benefits and access to citizens.

Secure, tamper-resistant and portable digital documents built on open standards such as W3C Verifiable Credentials provide a more robust approach to the process of issuing documents and verifying them. The documents in these forms are capable of being presented in multiple formats and in the digital form are cryptographically secured so that it is easier to determine the authenticity and state of the documents. Combining verifiable credentials with blockchain technology has the potential to transform the transactional activities of a government because better approaches to data governance, process management and information processing is possible.

Blockchain technology has come a long way since being identified only with Bitcoin and cryptocurrencies. The capabilities which made blockchain the perfect foundation for cryptocurrencies are also the ones which enable the transformative power of digital government. By now there are several successful running implementations of blockchain-backed government systems which deal with a wide variety of services such as land registration; education, skilling and livelihood credentialing; healthcare; procurement and supply chains as well as management of other digital identifiers including identity management.

Transactions of all kinds - in real life or digital - are built around trust. With the giant leaps in the capabilities of synthetic content generation it is increasingly difficult to have trust in digital transactions. Blockchain and verifiable credentials enable the foundational systems of trust which lowers monitoring and transaction costs while enabling better audit routines and transparency combined with data privacy. Systems where data exchange has been designed to use cryptographically secure methods not only improve process efficiency but also address the topic of trust deficit.

The information technology framework for digitalization of services in the public sector requires by examining the three important aspects - business, legal and technical. This trifecta exerts tremendous influence on the development of products and services which address the topics of social interactions, data governance and the actual technology stack involved. If the desired business outcomes are well articulated, then the blockchain technology based stack is capable of providing outstanding range of success coupled with an excellent experience for the consumers.

Adoption of blockchain in the public sector has several key features that make it appealing to government organizations, including:

1. Decentralization - There is no central authority controlling the blockchain network, and all participants have equal access to the data.
2. Transparency - All transactions are visible to all participants, providing increased transparency and accountability.
3. Security - The use of cryptography ensures that transactions are secure and cannot be altered or deleted.
4. Immutability - Once a transaction is recorded on the blockchain, it cannot be altered or deleted, providing a permanent record of the transaction.

It is also necessary to have a robust and practical framework for evaluating the blockchain technology implementation to be selected for providing the foundational trust service in public sector. A number of popular and large blockchains have the features of tokens built in as they service a range of marketplaces where buying and selling of digital assets, speculation with cryptocurrency and related transactions are necessary. In public sector deployments it is important to adopt blockchains which are tokenless and thus mitigate the deployments from the speculative and opportunistic bubbles created by market-making and exchange. The absence of crypto-tokens does not necessarily mean that tokenization of data will become impossible. In fact, the ability to tokenize data is a necessary requirement to create a natural end-result of blockchain deployments - the availability of data registries which contain authenticated data streams and thus become the authoritative source of information for data verification.

The unlocking of the potential promised by blockchains is when multiple ecosystems and marketplaces can securely exchange and verify data unencumbered by complex mechanisms of data security and provenance. Government transactions and public sector deployments present an opportunity to realize this promise and provide the citizens with all the convenience of a modern, secure, portable and trustworthy data governance system. 

By Shankar Iyer, Vice-President of Sales at Dhiway