Thursday, 13 August 2020

Why Blockchain is the Answer to Efficient Electronic Government

Public institutions need oversight. One only need look at the Odebrecht scandal or Panama Papers to see how national funds can be abused without proper checks and balances. This is one of the main reasons why blockchain is gaining ground as a way to transform governments into efficient, electronic entities that cannot be gamed.

The concept of e-government transforms the way public information is stored and received. The network establishes digital lines of communication between citizens and government to shape the delivery of services, elections, taxation and more. Basing this on the blockchain is integral, meaning the data cannot be altered or erased, which removes the likelihood of corruption and makes efficiencies achievable.

Savings, transparency and greater participation in the day-to-day of political life are some of the key benefits of e-government, according to the European Commission. “Information and communication technologies are already widely used by government bodies, as it happens in enterprises, but e-government involves much more than just the tools. It also involves rethinking organizations and processes, and changing behavior so that public services are delivered more efficiently to people.”

It may sound like the stuff of the far off future, but governments today are already beginning to integrate the concept into their service delivery. Case in point: Estonia. Estonia provides 99% of its government services online. That includes voting, paying taxes, signing documents and buying property — and it is not just convenience driving this push. On the national level, digital signatures — the ability to sign official documents electronically — saves for Estonia $600 million a year, the equivalent of two percent of the country’s gross domestic product. Two percent GDP could mean something much more lucrative for larger countries, and this is where the true use case of e-governments starts to come into view.

It is worth mentioning that not all blockchains are born equal. Different ledgers perform different functions, and the collection and distribution of private citizen data requires special attention. The best option for e-governments is likely to take the form of a private or consortium ledger. In the case of a private ledger, it is operated and controlled by a single organization. This organization then also determines the rules of the chain. Often, tight partner organizations are involved in the consensus, giving the impression of quasi-decentralization.

A consortium ledger, on the other hand, requires different companies or organizations with equal involvement in the decision-making process. A good example of consortium chains working for e-governance is found with state utility payments. Perhaps the utility service is government-owned and the citizen needs to pay their bill to receive electricity, in this case, there are multiple parties requiring a consortium arrangement. Private and consortium blockchain is the way to go for governments as it allows semi privatization of agencies without losing access to data.

E-governance is only predicted to come to the fore as blockchain gains public trust. Even countries like Venezuela, who continue to battle an economic depression and societal collapse, are turning to digital currencies and e-governance in an attempt to begin a new chapter in their history.

The world is only becoming more digitized, so it makes sense that governmental processes and bureaucracy takes the same course. A tipping point is on the horizon as more people come online and governments require flexible, borderless, unhackable methods to communicate with citizens.

By Matej Milchalko
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