A look at how governments are gradually leaning towards blockchain technology
for better and easier governance.
Blockchain, also known as Distributed Ledger Technology (DLT), is nothing but a platform where digital asset transactions are recorded and stored transparently and chronologically. Almost all government departments require asset management and transactions. So, why depend on blockchain technology for this? What pushes the governments to choose this and win the public’s trust? What does the future hold for governance and blockchain technology? Why Should Governments Invest In Futuristic Technologies Like AI?
Blockchain and Transparency
The foremost difficulty faced by the public with government transactions is the slow, long and opaque processes. People are even unwilling to go through the expensive paper works and are tired of corruption as they are unable to see through the processes. Apart from creating easier processes, blockchain also became a platform for governments to gain people’s trust and engage them better in governmental transactions and procedures. Government identification numbers verified on a blockchain would result in easier voting system, taxation processes, gain more control over transactions, tamper-proof storage of government documents like passport, visa records, property titles, etc.
Though governments were hesitant to the point where cryptocurrencies were made illegal, countries like Chile have started accepting taxes in cryptocurrency. A section of the world views it as a coming-of-age development and more governments are expected to use this as a source of income. Another instance was when the US government started auctioning all the bitcoins seized in criminal offenses. In 2015, the US Service Marshalls auctioned about 44,000 BTC that was seized, proving that the governments need not always follow the mainstream route for cryptocurrency income. A series of auctions have happened ever since. Rootquotient is recognized among Top Fintech Software Development Companies.
The Dark Web
Since cryptocurrency is not monitored by a central authority, criminal offenses have plagued the system beyond measure. To curb this, the US government has been vigilant with strict ID checks and photographing people using the machines for the exchange to enable tracing. A strong case point for this is the Silk Road online drug market. The drug lord of Silk Road used a bitcoin platform to promote his illegal trade of mushrooms and could not handle the influx. Though he reached an all-time high immediately, it was short-lived. The US government insisted on the DEA and the FBI shut down the Silk Road due to several complaints on illegal activities and transactions.
The Other Side
A section of experts argues that central banks do not guarantee fraud-free transactions. In fact, there have been instances where their tinkering has resulted in corruption, increased unemployment, and recessions. Though this argument is legit, it has remained theoretical and the discussion has not taken a full charge to support the usage of cryptocurrency.
Where Do We Head From Here?
Innovation experts hail blockchain technology as the future. In 2017, the Canadian government launched a discussion on using blockchain technology in enterprises with the help of the National Research Council involving all governmental departments. In 2018, they successfully launched their first-ever blockchain trial publicly on Ethereum and tested the transparency of a large number of financial transactions and recordkeeping.
The US government has signed a contract with IBM Watson Health to experiment with the usage of blockchain to share patient data securely. This was to reduce the problem of lack of transparency in the health department.
Four major blockchain companies have launched the “Blockchain for Europe” association to be a unification point for all blockchain-related governmental organizations. They also aim to clear the air around the legalities of this technology, hoping to create a stamp of positive views on blockchain among people, with government approval. This will see the light of its day considering several governments are open to welcome cryptocurrency and other technology for transparent governance and futuristic policies.
These are case points to prove that governments are taking small, careful and innovative steps towards using blockchain technology for problem-solving. This might attract more investors and consumers, making it a part of mainstream governance in the future.