There is much hype around blockchain.  Most of this arises from its use to underpin the bitcoin crypto currency.  It’s very interesting to exploring the broader application of blockchain technology which touches all industries – and Government.

WHAT . . . is Blockchain?

Business – and Governments – never operate in isolation.  They are participants in a business network.  Ownership of assets – tangible (e.g. a car, a house) or intangible (bonds, intellectual property) pass across the network in return for payments, governed by contracts.  Network participants currently keep their own ledger – recording all assets they own and updated on asset transfer.  Whilst well proven, this process is very inefficient, often piling cost on cost and is far from fit for the needs of the twenty first century!

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Figure 1 – Elements of Blockchain.

The novel blockchain architecture gives participants the ability to share a ledger which is updated every time a transaction occurs through peer to peer replication.  Privacy services are used to ensure that participants see only the parts of the ledger that are relevant to them, and that transactions are secure, authenticated and verifiable.  Blockchain also allows the contract for asset transfer to be encoded for execution with the transaction.  Network participants agree how transactions are verified through a processes referred to as consensus.  Government oversight, compliance & audit can be part of the same network.

WHY . . . Blockchain for Government?

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Figure 2 – Industrial (& Government) Blockchain Benefits

The financial services sector are the early adopters of Blockchain, but the use cases for Government are most compelling.   A couple of examples are:

Open Supply Chain – Dr Steiner in Business of Fashion says “Every physical object we buy comes with a story: a journey of people, places and materials. But these stories often remain hidden in sprawling, complex supply chains”.  The European Union demands more information about corporate supply chains, with penalties for non-compliance. Consumers want to know where and how their products are made.

Blockchain could enable safe digital transfer of property across the end to end supply chain, offering transparency to the participants, end user and regulatory authorities.

Identity Management – otherwise referred to as resolving the “privacy paradox” between delivering effective identity management solutions cross government whilst mitigating citizen privacy concerns around “who can see what” in their identity information.

Blockchain could be used to store components of a citizen’s proof of identity, locked with privacy services.  Once validated by the appropriate Government body, the citizen could decide – at a component level – who in the network is able to access their proof of identity.  Resiliency is achieved by the duplication of the “Proof of Identity” Blockchain across the network, which could include citizens, service providers (Government & private) and regulatory bodies.

Whilst certainly not a quick and easy use case to realise, identity management shows the value that blockchain could eventually drive for government & citizen alike.

IBM are helping customers in all industries explore and implement novel solutions that harness the power Blockchain technology – when it’s right so to do!   We have developed an incremental, easy to access engagement approach combines Design Thinking with agile development.


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