Security, efficiency and traceability are attractive benefits for public sector organizations. Questions remain, however, on regulation, trustworthiness and energy consumption.
Once associated largely with cryptocurrencies, especially bitcoin, blockchain is now increasingly proposed as a solution for governments seeking to transform the delivery of a wide range of public services. However, opinion is divided with regards to the extent to which blockchain can really transform government-provided services.
On the one hand, blockchain advocates see it as a kind of utopian panacea – a tool ripe for deployment to accelerate a government’s digital transformation of the public services it provides. On the other hand, blockchain cynics point to its limitations: claiming it can only be deployed in a small section of public services, and that its uptake by governments has been slow to date.
In reality, over the past five or so years, a growing number of governments have experimented with and deployed blockchain. This includes governments working inside international organisations, as well as national efforts to implement blockchain projects across diverse public sector activities.
In parallel, the number of publications on blockchain has risen dramatically. Real deployments – as well as increased research into blockchain in public services – mean we can now ask what consequences blockchain has for public service delivery.
To address this question, we delved into research on blockchain deployment across public services using the methodology of a systematic review. Firstly, we inquired which of the hundreds of public services delivered by governments were most suitable for transformation by blockchain and, in each case, what the pros and cons of blockchain might be.
Secondly, we asked how blockchain could affect different actors working within these public services – not just government itself, but also citizens and workers – who historically may resist technological change. Our findings were recently published as an article.
The public services blockchain is transforming
Blockchain is not a cure-all, and will not transform all public services. It is particularly apt to transform processes involving records management and transactions which require trust and authentication.
We found that blockchain is already quite diffused among different public services. However, the “top ten” public services being transformed by blockchain are: records management; healthcare; international trade and customs; voting; environmental protection; public procurement; food safety; digital identities; energy; and social protection.
|Public service||Number (% of N=92)|
|Government information infrastructure||9 (10%)|
|International trade and customs||6 (6%)|
|Environmental protection||4 (4%)|
|Public procurement||4 (4%)|
|Food safety||4 (4%)|
|Digital identities||3 (3%)|
|Social protection||3 (3%)|
The “top ten” categories of public services deemed most apt for transformation by blockchain, according to the systematic literature review.
The pros and cons of blockchain for government
The leading advantage of blockchain in government is an increased level of efficiency, since it promises to replace heavy, bureaucratic processes with automated, “tamper-evident” and secure means of storing and sharing information.
The second major advantage is traceability: it enables processes that can establish the authenticity, origin and safety of products. The third is decentralisation: blockchain can help ensure data is secure, reducing government dependence on information silos.
By far the foremost potential disadvantage is the challenge of regulatory uncertainty posed by blockchain, including issues of interoperability of blockchains and rules on data across borders. Secondary issues are the questionable scalability of blockchain projects, and, given its high energy consumption, the environmental impact.
Blockchain and public sector workers
For public sector employees, blockchain means less paperwork and fewer human errors, as well as an improved co-ordination of certain tasks – workers in different departments can access the blockchain more easily than previous systems.
Challenges include the fact that many employees will lack the knowledge and skills required to use blockchain technology. A long-term resistance by workers may come about in response to the cultural change blockchain may induce, including perceptions that blockchain might take or change their jobs.
Blockchain and citizens
The overriding advantages of blockchain for citizens are enhanced cyber-security and transparency, both of which should lead to greater trust in government. Blockchain also promises that individuals will be better placed to manage who they share their personal data with.
However, though data security is a plus, it is also a concern: no system can promise full protection – and blockchains have already been hacked. Further headaches can be found in an inherent lack of flexibility within smart contracts.
Finally, though blockchain proponents speak of a design which is built on a “trust-minimising” logic, because of the way in which the blockchain is added through consensus, critics say this does not automatically mean the blockchain will make governments more “trustworthy”.
Governments are implementing blockchain around the world, but there are advantages and disadvantages to this emerging technology. We need greater research into the potential effects of blockchain and how it might affect public service delivery. This is the ongoing task of TOKEN. Visit the website and learn more about our work.
by Diego Cagigas, Judith Clifton, Daniel Díaz-Fuentes, and Marcos Fernández-Gutiérrez, Researchers at TOKEN, one of the largest European projects on blockchain.
Header image – Gorodenkoff – stock.adobe.com