Slowly but surely the financial technology (fintech) that is dramatically changing the world is beginning to catch the attention of those fast thinking government types. In fact, there are so many applications for things the blockchain technology can do the bureaucrats will have no choice but to jump on the blockchain locomotive. Ironic too. An anti-establishment technology gets the backing of the establishment.
“IN THE hills overlooking Tbilisi, Georgia’s capital, sits a nondescript building housing rows of humming computer servers. The data centre, operated by the BitFury Group, a technology company, was built to “mine” (cryptographically generate) bitcoin, the digital currency. But now it also uses the technology underlying bitcoin, called the “blockchain”, to help secure Georgian government records. Experts are eyeing the experiment for proof of whether blockchain technology could alter the infrastructure of government everywhere.
The blockchain and similar distributed ledgers are databases that are not maintained by a single entity, such as a bank or government agency, but collectively by a number of their users. All changes are encrypted in such a way that they cannot be altered or deleted without leaving a record of the data’s earlier state. In theory, all sorts of information, from birth records to business transactions, can be baked into a blockchain, creating permanent and secure records which cannot be tampered with, for instance by corrupt officials.
While the blockchain originally sought a foothold in financial services, and digital currencies attracted early attention from investors, now interest in using the technology in the public sector is growing. Brian Forde, a blockchain expert at the Massachusetts Institute of Technology, argues that governments will drive its adoption—an ironic twist for something that began as a libertarian counter model to centralised authority. Backers say it can be used for land registries, identity-management systems, health-care records and even elections.
Fans argue that, if properly implemented, distributed ledgers can bring improvements in transparency, efficiency and trust. Naysayers respond that wider adoption may reveal security flaws. It is certainly early days for the blockchain: some compare it to the internet in the early 1990s, so growing pains are sure to follow. And blockchains can always be only part of the solution: no technology can turn crooked leaders straight and keep them, for instance, from feeding in spurious data…”