Blockchain is a distributed ledger. It is a growing list of records, called blocks, that are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. A blockchain is resistant to modification of data. is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. This means that the data in any given block cannot be altered without alteration of all subsequent blocks, which requires consensus of the network majority.
Blockchain technology has gained mainstream popularity in a relatively short period of time. It has the potential to change the government and public sector. With increasing public pressure for improved performance, transparency, and accountability, as well as reduced costs, many governments are turning to blockchain as a solution to some of the following challenges.
Correct identification of people, entities, objects or even autonomous agents is crucial for all the actors involved in providing services within the digital economy. Identification is necessary for the individuals use of essential services such as voting, property registration or banking. Forward-looking governments are already recognizing and acting on blockchain technology’s potential to improve transparency, trust and efficiency of registry data. A blockchain-based registry platform — with governments, businesses and intermediaries as a node, enhances transparency and streamlines the process of sharing registry data. Blockchain enables this agile approach by providing the underlying foundation for developing solutions with a modular architecture and components such as consensus, membership services and smart contracts. This approach delivers a faster time to value by accelerating deployment speed at reduced costs. Dubai’s Unified Commercial Registry initiative will store registration information from companies to streamline the process of opening and operating a business, the issuance of trade licenses and ensuring regulatory compliance.
DEMOCRACY AND DECISION MAKING
Current democratic models are generally based upon elections where the citizens vote, with several years in between, for political parties with political programs and their representatives. This traditional model of governance responds poorly to today’s management of nations and cities which continuously gets more complex and changes in an increasingly faster rate. This malfunctioning of democracy in today’s society is reflected in low participation in elections and the increase of new ways to protest against governmental politics. So, it is rather apparent that there is a need to improve the participation and involvement of the citizens in political processes at all levels. Blockchain can offer new disruptive models for decision making with functionalities such as: the possibility for citizens to engage and participate more directly in areas they are interested in, real-time participation in voting processes, new ways for politicians and experts to build credibility and authority and the possibility to delegate ones votes to authorities within specific areas. Aragon is an example of a Blockchain platform, where organizations can be built online, with alternative models for management and decision making, which highlights interesting alternatives to current democratic models.
The voting participation in elections is continuously decreasing due both to disillusionment, indifference, or a sense of futility, as well as the fact that voters still have to attend a polling place to cast their ballots. If citizens could vote from smartphones or personal computers comfortably and securely, more participatory democracies could for sure be achieved. With Blockchain it is possible to design e-voting systems that are much more secure, transparent and trustworthy, and still capable of preserving confidentiality. In current use cases, the city of Zug has used their Blockchain IDs to conduct their first Blockchain-enabled e-vote. Voting with Blockchain has also been done in places like West Virginia in the U.S. and Moscow, Russia.
PUBLIC ACCOUNTING, CONTRACTS AND TAXES
Public accounting, finances, contracts, and other information is still inaccessible for citizens or companies in most countries of the world. This lack of transparency is an essential reason why corruption and manipulation are easy to carry out. Blockchain can bring total transparency and immutability to the public administration. In accounting, all the incomes and payments can be scanned and registered on a Blockchain for full accessibility to show for what, by whom, and when every single cent has been spent. Smart Contracts can solve taxation in real-time and also show who has and has not paid their taxes. The full information about any public contract, with the conditions, deliverables, and payments can also be shown and followed up in real time. Estonia has a big part of its public administration on Blockchain. And many other countries and cities are starting to implement Blockchain, and for example, the public administration of Dubai will be digitalized, and paper-free by 2021.
Healthcare is one of the biggest and most expensive areas of public services. Moreover, public spending on health is continuously increasing, both due to the eldering population and the increase in health problems caused by the change in lifestyle. Hence, it is necessary to find new ways to manage public health services, so that an improvement in health can be achieved and costs can be controlled. The Blockchain offers an exciting new way to manage public health services built upon a Token Economy, which would provide: a more efficient and transparent system; a tool to incentive desired behaviors; and the possibility to easily apply data analytics and artificial intelligence to improve both services and health care strategies. Several Token Economy based health care platform have been developed and some specific areas have very advanced solutions, specially the management of health records or the control of the supply chain for medicine.
Blockchain technology can help bring about a positive transformation in government administrations globally. However, to achieve this transformation, it is critical to inform and educate politicians and professionals within the public administration. Because everybody who gets involved or affected by this disruptive solution needs to have a basic knowledge of what Blockchain technology is and how it fits in within the different governmental services. When Blockchain is used in government, it can offer countless opportunities in the areas of transparency, immutability, and security. These solutions are rather easy to achieve from a technological perspective, so its implementation depends mainly on the willingness of politicians and the public administration.
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