Blockchain technology is not something that is entirely tied to the past; in fact, it is the future of not only finance but also the public sector as well. There is a lot of hype that is being created around the prospect of blockchain technology taking over multiple public sector divisions and streamlining the process of storing and interpreting data.

Think of blockchain technology becoming helpful in the application of electronic voting to ease up the election procedures, electronic identities to help the government track individuals better while safekeeping their data at all intervals, and the prospect of electronic documents which would minimize the need to carry physical copies of them on their person.

All of these things sound delicate and impressionable, but in reality, the execution of these ideas with blockchain technology could become a real deal. Multiple government agencies around the world have already started testing blockchain technology and its very potential to improve the public sector along with introducing efficiency into the mix. But you must not get your hopes up because the role of blockchain technology in the public sector is still being entertained on an experimental basis, and nothing permanent or rigid has been brought before the world. 

If the adoption of blockchain technology becomes successful in the future, then it could be able to shift the whole government infrastructure from being eccentrically centralized and insecure towards a more systematic and safe execution. Public blockchains might be able to transform the very essence and objectives on which the current government sector operates. Think of every aspect of the public sector being transformed into a blockchain entity. The medical records of the patients, land use registries as well as educational documents are all linked to the electronic identities of the users and safeguarded permanently into a blockchain environment. 

This will definitely reduce the labor required to ensure the systematic functioning of these systems, along with the eradication of the errors that arise because of human interference. People would literally have no need to carry their passport, identity documents as well as medical records on their person because, with just a single stroke of a key, the whole data could be made available into any system on the planet, and it is just the beginning of all the possibilities and opportunities blockchain technology would be able to open up. 

This guide article will discuss in detail the prospect of using blockchain technology by government sectors and the important benefits that this whole transaction entails. But before that could happen, let’s have a discussion regarding the fundamentals of blockchain technology and why it is unique and different from the current public sector technologies in action.

What is Blockchain Technology?

A blockchain is a combination of multiple computing nodes made available by the users, which in unison makes up a decentralized network for a dedicated cryptocurrency. The blockchain consists of multiple blocks aligned in a bead-like formation, one block falling after the next in a consecutive manner. These blocks contain data related to the transactions that take place on the blockchain technology for a dedicated cryptocurrency. Each block might have more than one transaction and is given a specific hash number to identify a specific transaction from the other one. It is an eccentrically complicated and intricate system that is more secure and safe as compared with the conventional financial regime of the centralized world. 

The blockchain in itself is immutable, which means that once a fragment of data has been written or subjected to a dedicated block, it can’t be changed by a single actor. The computing nodes that work in unison are actually the users that are termed miners, and they have the most intricate responsibility of authenticating each and every transaction as soon as it takes place. For a transaction to become part of a block, all the miners or validators of the network might reach a consensus. 

It must be able to verify the origin of the transaction, the amount of cryptocurrency being transacted, and develop a link between the sender and a receiver. This is a security check to make sure that the transaction that is taking place on the blockchain comes from actual human beings and is not a scam. This eradicates any and all errors originating from human interference, along with the question of the transaction being orchestrated by bots or other computing elements. 

The security of the blockchain is at its extreme, unlike the centralized world of finance, where policies are being developed and implemented by shareholders and executive personnel. In the decentralized world, the total number of people taking part in the authentication of transactions must reach a consensus for any policy to be implemented or a motion to be carried out. 

That being said, all information that is present on a blockchain is made public, which effectively adds to the transparency of this whole financial setup, but at the same time, the content of the blocks are completely encrypted, which means that no information such as the true identity of this sender or receiver plus the amount which was transacted is ever available to the public.

Governments should Employ Blockchain Technology

The current infrastructure of government states is extremely fragile and broken at bits and endings. It could seriously use some renovation and implementation of new ideas such as blockchain technology. A very crucial aspect of any government is to be able to store and manage sensitive information of the citizens, and the current technology systems are prone to hacking and other kinds of illicit cyber activities but throw blockchain technology into the mix, and suddenly these state secrets and sensitive information is completely secure and off the grid. 

The state has to store all kinds of information regarding their citizens, assets as well as public organizations, so what better way to do so other than in a decentralized and blockchain environment that can only be accessed by a number of officials who are given the permission and access to do so. With the implementation of blockchain technology, there is only a minimal range of management that is required, but taking the whole incentive into centralized server space, the process can become quite complex and cost-intensive. 

According to our research, even most of the first world governments and states have fallen victim to cyber-attacks and data leaks over the years, which only represents the crumbling and cracking aspects of their centralized data storage and management approach with it. Within the plantation of blockchain technology, activities such as unauthorized access and tampering could be stopped altogether. People could be provided with a better overall service in a much more cost-effective fashion, but these don’t even come close to the following thrilling benefits of blockchain technology.

Preventing Government-Level Corruption

The most elegant aspect of blockchain technology is that it doesn’t require help from an intermediary to carry out a trade or a transaction, for that instance. All the technicalities and specific key points of trade are already met and drafted into a smart contract that could be subjected to a blockchain environment. Once both parties have checked the contents of the smart contract and have signed their consent on initiating the contract, there is no going back. 

Once the ink has dried on the contract, the terms and conditions can’t be changed, which makes blockchain technology completely immutable and without the need for any intermediary whatsoever. In this specific regard, blockchain technology can combat government corruption because there will be no need to bribe the officials because they won’t be able to do anything even if you do, thus putting a leash on government-level corruption and misuse of power allotted to people in the democratic environment. 

All the records that are kept on the blockchain are completely tamper-proof, which means that their content can’t be changed. States can have the option to either practice a decentralized approach with the data that it is keeping or a centralized element, allowing them to have more control over the data that they are currently keeping while at the same time increasing the transparency and auditability of it. Smart contracts, as talked about earlier, are the backbone of decentralized finance, and in the long run, these are more cost-effective and trustworthy. It doesn’t matter who you are or what kind of power you have; if you are bound in a smart contract, and you have not kept your end of the deal, the contract simply won’t execute at all. 

Only until all the preset conditions for that specific contract are met would it subject itself to completion; otherwise, it would just sit there uncompleted. The information that rests on the Blockchain is always open to the public, accessible from any device on the planet, comprehensible, and at the same time interoperable. But don’t think for even a second that the content of the blocks or the information that these are carrying would become apparent or accessible to people because it would remain anonymous, especially all the details pertaining to the participants of a transaction and or a smart contract.

Electronic Identity with Blockchain Technology

As explained earlier, the state has to procure and manage the personal data of people, such as their address, phone number, and national identity number that they have been given. But the technology that governments or states of the world employ to do that is the bottom line subjected to hacking and other violent cyber crimes. Data breaches are a common instance with the conventional modes of data retention systems; all that is required is a single point of failure for a hacker to manipulate the entire system and get access to anywhere and any file that they want to. 

But the same can’t be said for blockchain technology. If all the data of citizens are employed in a blockchain environment and is completely decentralized from the basic Internet, then the chances of a cyber hack transpiring fall gradually, and it almost becomes impossible to manipulate the system no matter how competent the hacker is. A data breach is not something that is a concern with blockchain technology, and a decentralized approach could help governments and states to resolve identity and access management crises. A distributed Ledger employed in a decentralized fashion would allow everyone within the network to be able to verify credentials, and only the people who either work for a specific department or the government employees would be given the credentials to access the network in the first place. 

This will limit the exposure of the information only to the most relevant bunch of people, thus making it difficult for a cyberattack to transpire. A distributed ledger technology would allow the government and states to be able to incorporate the personal identity of a citizen so that it could easily be safeguarded against any potential breaches. 

More often than not, data breaches that take place at the government level, the data of the citizens is procured by the hackers and is then sold to the highest bidder on the black market. The technology that is given the permission to sustain all the user data stops relying on a central authority and instead requires verification from a dedicated node of authenticators working in harmony to ensure that each and every strand of data remains intact and immutable to the very end.

Efficiency and Reduction of Costs 

For any government or state out there, budgeting and management of financial resources is always a problem. There is almost never present a suitable supply of funds to manage the systems associated with the management of public services and data of the citizens, which is a real concern for the state. 

The centralizing of the public data at a single place and trying to manage the whole thing off requires extra man labor, time, and moreover expense, thus making this endeavor unbearable in the end. 

Blockchain technology could be used to cut these over pretentious costs associated with the management of data systems which in turn power public services while at the same time keeping the whole thing running as smoothly and efficiently as possible. Suppose a blockchain-oriented accounting system is implemented at the state level, which means that total finances, as well as financial records of public service management systems, could be brought on a single digital Ledger. 

This way, the auditing of the finances, including salaries, pensions, and other budgetary concerns, to run this system smoothly would not remain a problem at all. There will not even be a single penny that could go missing this way, and thus the prospect of corruption or redirection of finances into areas where their presence is not required could be reduced, and the allocation of the budget could be made more whole so that it could reach the areas where it is most required. 

Role of Blockchain in Voting Process

More often than not, the headlines on multiple news channels are banging with an election in a third-world country getting rigged, and the party who won was also the same one that rigged the election in the first place. There have been talks of multiple elections, even in the first world countries, being compromised either in a social media play of events where people were targeted via marketing projects and multiple advertisements regarding the Senate members who were taking part in the election. 

When something is being stomped too many times around social media, it kind of becomes a sensation, and people are drawn to it; experts believe that many elections that have been conducted in first world countries have fallen victim to social media favoritism and playing with people’s psyche. That is a kind of social engineering but less elaborative; there have been instances where elections were rigged voluntarily and knowingly, and people and government officials were involved in all of this. This is bottom-line corruption, but by bringing blockchain technology into the mix, all areas of the election would become as apparent and transparent as possible. There will not even be a single entity or area that could get compromised or hacked in any potential way. 

This fulfills the very purpose of conducting an election in the first place and keeping the integrity of the whole charade intact. Blockchain-based voting systems could streamline the process of casting votes by the people and would make the collection as well as the display of the data more transparent. There will not be a need to count the votes because all of these would get casted in a decentralized fashion, and the system would take care of the counting itself. 

This way, any and all complaints that are cast against election commissions around the world that they didn’t count the votes properly and or might have missed a few would finally be put to rest. Electoral integrity could be sustained with the help of a blockchain-based electronic voting system, plus it would be a huge upside to the conventional modes and practices in place when it comes to elections and the manipulation of people and authorities along the way that rid the elections unfair. 

These are some of the applications of blockchain technology in the public sector; all of these are being entertained at an experimental level, but there is promise nonetheless, and in the future, there could be a full-fledged adoption or implementation of blockchain technology in the public sector.