Although cryptocurrencies such as bitcoin are not supported by most governments, ignoring the underlying technology, blockchain, is not a wise move. This sentiment was confirmed by Data Foundation and IT firm Booz Allen Hamilton in a report, ‘Bringing Blockchain Into Government: A Path Forward for Creating Effective Federal Blockchain Initiatives’, aimed at guiding the US federal government in adopting blockchain. The report was introduced at a launch event where several federal agency officials and private sector tech leaders were present.
The report emphasizes on using blockchain responsibly under the right circumstances. Even when the use of blockchain seems beneficial, the report suggests program administrators to consider other factors as well. Precisely, five important questions are advised to be evaluated by the administrator before taking a decision on whether blockchain should be employed in the project or not. The five key considerations mentioned in the report are as follow:
- Does the blockchain offer a real benefit for information security, trust, or transparency?
- Can blockchain be practically and efficiently applied?
- What blockchain design is most appropriate?
- Is the cost of applying blockchain merited relative to information gains? Does the application satisfy applicable data sharing and confidentiality laws?
Once the project is evaluated on this criterion, the decision to adopt or not adopt the blockchain technology can be effectively and comfortably finalized. Further, elaborating on the importance of the design of blockchain, the report explains that redesigning a blockchain is very troublesome as it affects every node in the system. In addition to that, in established businesses where public data sharing can be affected, the design of blockchain becomes very important. According to the report, the scenarios where public data sharing can be affected are when:
Establishing trust when individuals or entities may otherwise lack confidence in data accuracy.
Maintaining quality when threats of tampering or adjustments to information may affect data reliability.
Facilitating transparency when individual actors lack trust in a central entity or repository, or when transparency is needed for other accountability purposes.
Besides suggesting several considerations before employing blockchain, the report also mentioned several ongoing federal blockchain projects. Data Foundation was of the view that blockchain was smartly used in the projects to solve problems. For example, the Food and Drug Administration (FDA) health data exchange project allowed patients to control data about their health conditions and treatments.
Due to this project, patients can give or sell their data with their will to researchers. Previously, while researchers used to gather patient’s data from the internet, patients were deprived of several monetary rewards, philanthropic benefits, etc in exchange for their data. Now, blockchain is utilized in a manner by FDA to ensure that the patient is well aware of his data and can even restrict its access.
Another project, GrantSolutions was also endorsed in the report. It was briefed that 26 major grant-making agencies in the country distributed grants of $750 billion worth to thousands of recipients. Before that, the record maintenance of grants allocations and uses was very troublesome and both, grant recipients and the grant-makers, possessed very limited access or in some cases no access to information related grants. Therefore, blockchain was utilized to solve the problem and provide grant-making entities and grant recipients the access to information for all the grants.
Overall, there were seven projects at the federal level that deployed blockchain, including two aforementioned projects. Real-Time Application for Portable Interactive Devices (RAPID), Department of Health and Human Services (HHS) Accelerate and General Services Administration (GSA)-Multiple Award Schedules Ledger Technology Pilot were some of the projects. The report stated that these projects illustrated the application and potential of blockchain in government.
Further commenting on the seven projects, it was suggested that while some projects adequately put blockchain to use, other projects provided exposure to agencies and served to familiarize agencies with blockchain technology. Reemphasizing on the five considerations to be important for policymakers as well, the report urged Congress to start weighing in on potential strategies for promoting blockchain. On opportunities opened by the blockchain for public and government, the report read:
As the federal government moves forward in developing a federal data strategy, consideration can be given to how blockchain might enable better recognizing data as a strategic asset for government. A blockchain can bring a wider circle of participants into a project that produces open data for public use.
The report concluded that the future holds the fate of blockchain and only time will decide if blockchain turns out to be successful or not. But, at present, it was advised that the adopted blockchain and developing projects based on the blockchain should be readily welcomed by the government.