How Blockchains Will End Corruption in Government
First of all, it only feels natural that every article about blockchains should start with a quick explanation of the technology. In order to make this article reach a wider audience and be more accessible, I’m going to follow a similar startegy and explain the general idea of Blockchains and why they are so useful.
The abstract interpretation is that a Blockchain is just a like a chain. It’s a combination of many chain links that are attached together; anyone can see the chain links and all the links are ordered so that there is always a previous link and a next link. This all sounds very simple, but what makes blockchains really unique is that they are immutable, meaning you can’t detach a link from a chain once you have attached it. With that immutable property, you can store data in each one of the chain links (nodes) and noone will ever be able to change it. Bitcoin is one of the most popular uses of blockchains, where every transation is just another link on one main blockchain and noone can change the history of transations. I have recently stumbled upon a really simple implementation of blockchains by Gerald Nash ⚡️ if you want to better understand the technology this is a good place to start.
With that interpretation in mind, how can a blockchain stop corruption?
So how does the corruption happen at a government level? To be honest, there are millions of ways, but I want to talk about one specific case. For example, let’s say I’m the person responsible for placing orders to buy 10 police cars 🚓 for the local police department. To make that purchase I would define some kind of performance criteria and search the market for the car model that would fit the criteria. However, the criteria never specified the make of the car or who I’m going to buy vehicles from. Now imagine that my good friend Phil is the owner of a car brand, let’s call it HotWeelz. HotWheelz has a car model that fits the purchase criteria called Model-T that is sold at a price of $10,000.
Since this is a government order, very few people actually keep track of what government buys, simply because there are too many orders, purchase documents are a hassle to get access to and there are too many levels of government from where the order can be made. So what can happen is that I can reach out to my friend, the owner of HotWheelz and tell him to sell me cars for $15,000 instead of $10,000.
That means that the order for 10 cars will cost $15,000 x 10 = $150,000 instead of $10,000 x 10 = $100,000 which is a surplus of $50,000. That means that me and Phil can fullfill the order and still keep the cash for ourselves.
Is anyone going to find out that the local police department ordered Model-Ts from HotWheelz with $5,000 markup ? Theoretically its possible, but in real life, its really tough to get access to all the files and records and connect the dots and somehow prove that me and Phil are good friends and we kept the money.
How will the story be different with Blockchains?
Let’s say my local police department needs 10 more cars, and I want to run the same scheme with Phil again and pocket some more cash. The only difference is now I’m required to log all my purchases in a government purchase tracking platform built on top of blockhain teachnology. For this platform to be successful, it should also provide public access to all purchase records. This way as soon as I place the order for cars with MSRP of $15,000 that transation is recorded and can never be changed. With public access to all of the transations, anyone can check how much I bought the cars for and it might raise many questions why the cars are sold with a $5,000 markup.
Now to be fair, there are a lot of things that have to go right for the change to happen. The government must implement it, the system has to be accessible by the general public, concerns about privacy of government purchases will have to be figured out. But with all the corruption going on in the world and the natural greed of every human, it is very hard to say if we can create an honest gonvernment structure without an intervention of a technology such as blockchain.
