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.
