Developing Trust in the Government with Blockchain Technology

Also in Linkedin: 
https://www.linkedin.com/pulse/developing-trust-government-blockchain-yu-kit-lee/?published=t

A Deficit of Trust

As we have seen from recent events, lack of accountability, opacity, forged documentation engender the single most crippling aspect of a government: the lack of trust in that government and its processes.

With trust, time, costs and risks are significantly reduced, society becomes more open and participative, and governance improves.  What is needed for trust, that most precious quality of governance? 

For example, if citizens do not trust in the veracity of the National Identity card, the processes which depend on it – financial and banking transactions, voting, security, privacy, personal recordkeeping – suffer a deficit of trust.  Additional solutions and processes incur cost, greater complexity and even less transparency.  Data about persons based on the national ID card become suspect.  All resultant transactions, be they healthcare, social services, financial, claims for benefits, suffer from a lack of trust.

There are various qualities, of which transparency, openness and an immutable audit trail rank among the most important, in developing trust. 

Similarly, transactions which are opaque to the transacting parties are costly, complex and take time because the parties do not trust each other.  If a buying party trusts the selling party and the insuring party through transparency and immutability, the transaction can be a lot quicker, cheaper and simpler.

An Open Government

The ultimate goal would be an Open Government, one where government becomes a trusted partner and reinvents processes to enable collaboration between corporations and citizens.  In such a system, activities, decisions and information would be open, transparent and consistent. 

Is this merely a pipe dream?

Estonia, a tiny but technologically developed nation, has a government-issued digital identity based 

on a technology called Blockchain (more later). A number of digital services is enabled to citizens with the e-Identity.  Citizens can verify the integrity of the records and who has access to them, enabling such electronic services as e-voting and filing taxes electronically.

Dubai has also staked a future based on Blockchain technology: by 2020, the Dubai Government intends for all visa applications, licence renewals and bill payments, about 100 million documents a year, to be based on Blockchain.  All real-estate transactions will be conducted on Blockchain. 

The underlying Blockchain technology is such that it is immutable, tamper-proof and provides a common view of activities, if implemented correctly.  The desired result is that trust in government will increase, and foreign investors will be attracted to such an environment.

Developing Trust in Government

Blockchain is a technology which famously underlies Bitcoin, but Blockchain technology itself is independent of Bitcoin, or any other cryptocurrency.  Essentially, it is a distributed, shared ledger that provides a single source of truth to all transacting parties.  It is trusted because it is protected by cryptographic technology.  It is revolutionary because it breaks the mould of each transacting party keeping its ‘own’ records and trusting a common, distributed ledger.

It is already used in various industries: Walmart, Driscol, Cole’s, Nestle, among others, are participating in a project on food safety to trace the provenance of food items:  tainted food, such as the recent E Coli contamination of Romaine lettuce in the US, may have been prevented or more easily traced if a Blockchain food traceability system were in production.  

European banks are running a number of pilots and projects to redesign financial transactions such as Letters of Credit and disputes on Blockchain.  Maersk, the world’s largest container shipping operator, is running blockchain to reduce the cost and time for shipping goods from one country to another.

Nearer home, Thailand’s K-Bank has implemented a system for Letters of Guarantee based on Blockchain, with at least one production system in Singapore and several pilot projects in the banking sector.

For Malaysia, reinventing itself anew, there are many opportunities to start by reinventing existing processes to be open, transparent and trusted. Some examples are real estate (land and property) transactions, asset management, contract management and regulatory compliance.

More specific examples are: a land registry with an auditable, immutable trail of ownership, a national registry of vehicle ownership that is auditable and improves road safety, a corporate registry of ownership for accessibility and auditability, even a national registry for citizen identity that is auditable.

While some organisations undertake these projects to reduce costs and improve processes, for Governments, there is the end-goal of engendering trust, innovation, co-ownership with citizens and corporates, and attracting investment.