How Blockchain is disrupting a national government

If you haven’t heard about the “Blockchain” you have probably heard about Bitcoin. Bitcoin is that cryptocurrency many news outlet are making articles about and is heralded as a potential disruptor of material cash and financial institutions. It was created in 2008 as an Open Source project by Satoshi Nakamoto and has gone from a mere few cents per Bitcoin to now, March 14th, valued at 1250.22 dollars. While Bitcoin draws more attention, Blockchain — the technology behind Bitcoin — has the potential to do the most impact in our governmental, financial and corporate institutions.

Before we dive into why is it so important, we must first understand what is the Blockchain and why should you care about it.

What is a Blockchain ?

Fundamentally, Blockchain is a decentralised consensus system. In the real world you can give another person an item, and that person owns it. But on the internet, this becomes more complicated. You could just copy the information and both participants of the transaction would own it.

In the pre-blockchain world, there was no way to get multiple persons to create something singular, and so we would usually put our trust in a person or representative (e.g. a Bank) to create and maintain the singular versions of things we needed. As we know by the recent financial crisis, trusting an institution can be costly, they are free to charge you for doing things at unfair prices and manipulate your money (e.g. High-risk investments). This old way of doing things is not only high risk for the consumer but very inefficient.

Why is it important ?

Blockchain solves this problem. It is basically a log of all transactions that were ever verified on the network. The transactions are collected in blocks, which are found every ten minutes in a random process called mining. Every time a new transaction is enabled, all participants must agree on the state of the blockchain, that way everyone’s copy of the blockchain updates so they all match. Therefore, it creates a completely unalterable historical record, if you take your copy of the blockchain and go back and change it, it will be rejected because your copy would not match the rest.

Who is using it ?

What if you could completely optimise elderly care, or change the way information is tracked through criminal trials. At the SXSW Interactive Conference a Dutch partnership is completely changing the way we think about Blockchain and making associations to develop more use cases for this technology.

Dutch Government Partnership:

The Dutch Public Service requested a group of two individuals (Marloes Pump and Koen Hartog) to start pilot projects for governmental agencies. They wanted them to:

1. Enhance knowledge regarding Blockchain within the participating organizations;
2. Develop use cases for (future) application of Blockchain technology.

They chose eleven public organisations. These institutions selected a process or service that they wanted to modernise, improve or completely rethink using Blockchain technology. They matched technical experts and the public sector organizations. Together they then developed a new — Blockchain based — process or service.

These are two of the many pilot projects which concluded in November 2016:

Authorisations in the healthcare process (Healthcare Institute)

The Police, the Prosecutor, the Judges and the lawyer of the accused share information before and throughout a criminal trial. For some of the information objects, the Ministry of Justice’s IT systems are used. The project team desired to understand whether Blockchain could help create a log of what information was shared with whom at what time

The idea was that this could prevent proceedings from being paused as a result of the claim of one of the parties involved not to have received a piece of information. Blockchain would become a security/truth layer ‘on top’ of the existing systems.

Information sharing during a criminal trial (Ministry of Justice)

The Healthcare Institute focused on authorisations in the healthcare process. The pilot project evolved around a fictional elderly person, who required care from different healthcare providers.

Healthcare providers don’t always know each other or aren’t aware of specific arrangements. The Healthcare Institute sees Blockchain as a technology that can create a clear overview of authorisations in the healthcare process. It has developed a prototype on Ethereum, which allows involved healthcare providers to get real time information on a need to know basis about their client/ patient. The client/patient has more control over his data and can determine — via an application — which professional can get access to additional information.

Main Takeaways from Dutch Partnership document:

The key for the future of Blockchain and for improving governmental partnerships is for organizations to:

• Partner with companies and universities to define a vision on a Blockchain based government.
• Establish rules and standards for Blockchain created with government funding.
• Collaborate with student networks via hackathons and challenges.
• Don’t start large Blockchain projects at this early stage. Start small; invest in knowledge and experiment with small projects.

References:

• Dutch Governmental Partnership (https://www.blockchainpilots.nl/)
• Blockchain Information (https://blockchain.info/)