What is the blockchain technology revolution that’s causing such a stir?
A lot of people couldn’t answer ths question until very recently. There has been an elementary change in thinking about blockchain technology in the recent past. Blockchain-related innovations are already providing solutions to longstanding problems and improving the current available technology. Given the technological advancement brought about by blockchain, it has been a subject of intense interest especially for governments across the globe. In 2017, more than 200 government agencies around the world, including the Department of Homeland Security of the USA, were exploring the use of blockchain technology.
Blockchain can be compared to the initial phase of the internet, when people didn’t know what to do with it. It was like a solution looking for a problem. However, the internet has become a ubiquitous part of our life now and blockchain is expected to follow the same path. Governments around the globe are exploring the feasibility of putting public services on distributed ledgers, to create new systems for health records, voting, taxation, welfare payments, engaging with citizens and more. Here’s a look at some of the countries already using blockchain.
1. The European Union
In April 2018, a declaration was signed creating the European Blockchain Partnership (EBP), with the aim of establishing the European Blockchain Services Infrastructure (EBSI). The European Union Intellectual Property Office (EUIPO) is currently researching how blockchain could combat counterfeiting, which costs the EU €60 billion (£53.5 billion) each year, according to the agency’s research. It also organised the “Blockathon” competition in Brussels to develop anti-counterfeiting blockchain solutions, drawing on support from specialists in law, IP and anti-counterfeiting.
2. The United States of America
The US is exploring a number of applications of blockchain in the public sector. In January 2017, the Food and Drug Administration (FDA) signed a two-year deal with IBM Watson Health to explore how blockchain could be used to securely share patient data. This project aims to deal with the lack of transparency and security in health data processing and began with a trial on oncology-related data. The Department of Homeland Security (DHS) awarded a grant of $192,380 to a startup called Factom to test the capability of blockchain to protect data collected by the Border Patrol cameras and sensors. Delaware, Illinois, Arizona, Vermont and some other states in America have introduced various legislations regarding the legality of blockchain products.
3. The United Arab Emirates
The government of the UAE launched “UAE Blockchain Strategy 2021,” with the goal of becoming a world leader in adopting the technology. The UAE government predicts that adding visa applications, bill payments, license renewals and other documents to a blockchain could potentially save 5.5 billion dirhams (£1.1 billion) annually in document processing alone. It could also cut CO2 emissions due to trip reductions and redistribute up to 25.1 million hours of economic productivity. Dubai’s Roads and Transport Authority announced plans to launch a blockchain-based vehicle lifecycle management system in 2020. Earlier in 2018, Dubai released plans to launch a virtual blockchain-based, tourism-specific marketplace as part of its Dubai 10x initiative.
Swiss Bank recently decided to become the first in the country to offer business accounts to crypto companies. Vontobel and Falcon Bank, two private Swiss banks, are already known as being among the lenders agreeing to handle cryptocurrency-based investments on behalf of their clients. The Swiss city of Zug is home to Crypto Valley. Zug already accepts cryptocurrency as a mode of payment for public services. It has also digitised ID registrations, built on the blockchain, and has recently completed an e-voting trial. The e-vote system is customisable, while votes are anonymous and tamper-proof. The system has been deployed in three different data centres, which distribute security and data loss risks geographically.
Estonia’s renowned e-Estonia programme is powered by blockchain. It connects government services on a single digital platform. This programme integrates a vast quantity of sensitive data from healthcare, the judiciary, legislature, and security and commercial code registries, which are stored on a blockchain ledger to protect them from corruption and misuse. Estonia began testing distributed ledger technology in 2008, before the Bitcoin whitepaper, which first coined the term “blockchain,” had been published. Estonia dubbed the technology “hash-linked time-stamping” at the time. Estonia developed a blockchain technology called KSI, which secures the country’s networks, systems and data. The KSI system provides a formally verifiable security system for the government to function even under constant cyber-attack and is now available in more than 180 countries.
The Republic of Cyprus has been a popular financial hub for years now, given its key geographical location and favourable taxation laws. In October 2017, the Cyprus Securities and Exchange Commission (CySEC) announced that the country would begin to use blockchain for digital payments in the near future. The regulatory agency believes that this would provide a simple and secure means to transfer assets to foreign exchanges. Cyprus already has regulations in place for businesses that use or trade cryptocurrencies. The government is now actively looking at ways in which blockchain can be used. The nation’s premier educational institute, the University of Nicosia, has been accepting payments from students in Bitcoins since 2013. The university hosts various student clubs associated with blockchain and cryptocurrencies. It also offers a Master of Science degree in Digital Currency.
In 2014, the Danish political party, the Liberal Alliance, became the first major political party in the world to vote using blockchain technology. It continues to use blockchain to power the internal election it holds at its annual meeting in a suburb of Copenhagen.
Gibraltar launched Europe’s first regulated Bitcoin product in 2016, when the Gibraltar Stock Exchange (GSX) unveiled a cryptocurrency called BitcoinETI. Gibraltar has also created a blockchain subsidiary of its stock exchange and has introduced a bespoke license for fintech firms using blockchain.
In February 2018, the Gibraltar Blockchain Exchange (GBX) announced the completion of its first token sale, which was issued in the Rock Token (RKT) cryptocurrency. A total of 60 million RKT were distributed in the public token sale, equivalent of £4.5 billion.
Georgia’s government developed the National Agency of Public Registry (NAPR) with Bitfury Group. It is a land registry project, based on a custom-designed blockchain system that is now integrated into the digital records system of the NAPR. This private, permissioned blockchain is anchored to the Bitcoin blockchain through a distributed digital time stamping service. Distributed digital time stamping allows NAPR to verify and sign a document containing a citizen’s essential information and proof of ownership of property. Blockchain technology also permits significant time and cost savings in the registration process. Therefore, the blockchain land-titling project could have a big global impact beyond Georgia.
Public sector agencies in Australia are currently exploring the potential of blockchain technology. Standards Australia is the international technical committee looking at blockchain regulation for the Secretariat for the International Standards Organisation. It intends to formalise standards, definitions, rules and various other aspects of the technology in order to provide clear directions on issues such as jurisdiction, governance and interoperability of blockchain technology. In addition, the Digital Transformation Agency, a government body, is exploring the uses of blockchain in government. The Australian Digital Commerce Association is also currently working with the government to help with designing policy, legislation and guidelines for the blockchain and crypto industries.
What is the real potential of blockchain technology? That is yet to be fully explored. Blockchain is still in its early stage. This is a point where signs of the true potential of blockchain are becoming increasingly visible. This is also a time when public sector agencies as well as private sector enterprises are beginning to experiment with and figure out where the real opportunities are and how to benefit from them.