Is Blockchain a Technology for the Public Sector
We can all agree that blockchain is one of the most popular technology topics of the year. There is no shortage of material to review on the origin, intent, and plausible trajectory of the blockchain ecosystem and how it will impact industries from Financial Services, Government, Healthcare, Identity, Payments, Voting, and many others.
However, specific implementations still require a healthy degree of research and experimentation to drive-out the full value of blockchain. In this respect, Microsoft is in a unique position to help customers move past conceptual understanding and learn through ideation and experimentation.
With this in mind, the following post will begin by exploring the degree of fit between the key characteristics of a blockchain, and aspects of the Public Sector mission. The post will then explore candidate Public Sector scenarios with a more detailed foray into the use of blockchain for real property management.
Blockchain and Public Service.
Let’s start with why before moving to the how. Blockchain is a building block, or tool, that tackles a specific design challenge: how can a common set of information be shared across many organizations, without any single party being the central authority, while ensuring the changing data set remains trusted? The blockchain proposed to solve this challenged using a distributed ledger: a distributed database with a trust harness.
In this light, the blockchain can be described as a tool to enable distributed digital trust. It is therefore not surprising that the blockchain has shown the most potential in circumstances where there is an opportunity to share data across multiple parties without having established trust between each party a priori. This is how trust in payments using the bitcoin digital currency based on a blockchain is established.
Another differentiating feature of a blockchain is that it does not rely on any single intermediary. In fact, no single party is trusted absolutely; their actions are scrutinized equally through cryptography. As a result, the blockchain is also tool that enables disintermediation, or circumventing middlemen, to lower the cost of operations or transactions.
A final aspect of the blockchain to consider: it is important that we are exploring a blockchain and not the blockchain, a mythical solution to transformation everything. Several blockchains will be established for specific purposes or industries, and to address both public and private scenarios.
Using our definition of blockchain as a backdrop we can now explore the data stewardship role played by Public Service.
Public Service: A Trusted Steward
At the heart of the Public Sector’s purpose is maintain the trust of its citizens and constituents. From this imperative of public trust stems the need to demonstrate accountability through transparency. Furthermore, the Public Sector operates at the interaction of many stakeholders: constituents, citizens, NGOs, private enterprise, and other jurisdictions. We can see here the applicability of the blockchain distributed trust model discussed earlier.
Public sector also must uphold its responsibilities in terms of the efficient management of public funds by minimizing intermediaries. This is of particular interest given its role as the steward of the public wallet. Again, he finds here an alignment with the transactional efficiency of a blockchain.
This high-level overview of how the design characteristics of blockchain presents the to some information stewardship challenges faced by Public Services.
Public Sector Blockchain Scenarios
The Public Service federal, provincial, and municipal level acts as a trusted intermediary and steward of public record in a wide range of areas including registries, permits, claims adjudication, voting, copyright, and trade.
Public service is also a trusted steward of confidential records in the areas of identity management, health, education, and electoral processes. These scenarios share certain aspects their public record relatives which also shape the service to citizen. However, these scenarios also consider confidentiality to be of paramount importance.
Another area that warrants exploration is the question of Public Sector procurement, and supply chain management. Much like its private sector counterparts the public sector much also manage the complexities of increasing elaborate supply chains.
In each of these scenarios a blockchain embeds core capabilities in the area of audit. Indeed, digital records increase the ability to detect fraudulent operations early, preventing unwanted consequences, and reducing the effort or implementing corrective measures downstream.
Detailed Scenario: Real Property Management
Governments manage among the most diverse real estate portfolios. A blockchain scenario of real property management would include the following elements:
- Devices can track the state of safety of buildings and their maintenance in your organization.
- From bridges to elevators blockchain can provide for a tamper-free ledger of operational data and the resulting maintenance.
- Third-party repair partners can monitor the blockchain for preventive maintenance and record their work back on the blockchain.
- Operational records can also be shared with government entities to verify compliance.
