Blockchain Revolution

Integrated Government
Estonia is cutting administrative inefficiencies and providing integrated services to its
residents and businesses by creating an electronic ID card for everyone and using a
blockchain-enabled Internet backbone known as the “X-road” to connect across
multiple programs and databases in both public and private sectors. Others can do it,
too.
Many countries such as Canada, the United Kingdom, and Australia have
explicitly rejected the concept of a central population registry and single government
ID as a matter of public policy. This decision stems from a concern for personal
privacy and an aversion to expanding state power, especially in granting or revoking
identities.

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However, as Estonia shows, if we hash official documents (passport, birth
certificate, marriage license, death certificate, driver’s license, health card, land titles,
voter ID, business registration, status of tax payments, employment number, school
transcripts, etc.) that currently exist in multiple databases into a single blockchain,
blockchain-enabled networks could deliver integrated services without going through
any central processing. Not only could this model protect privacy, it could enhance it
by allowing people to verify the accuracy of their information, and to see who
accessed or added to that information (i.e., a permanent information audit).
In fact, in the future it makes sense that each citizen owns her identity information
rather than a government. As we explained in chapter 1, just as networks and mass
collaboration can eliminate the need for a government to issue currency or for a bank
to establish trust, people won’t necessarily even need a government-issued identity
card. Said Carlos Moreira of the cryptographic security company WISeKey, “Today
you need an organization with endowed rights to provide you with an identity, like a
bank card, a frequent flier card, or a credit card. But that identity is now yours and the
data that comes from its interaction in the world is owned by someone else.”
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On the
blockchain, the individual owns the identity. Your “personal avatar” could decide
what information is provided to whom under your command. It could also make
choices about integrating data. However, rather than everything you do with
government being integrated in some massive government database, the integration is
achieved by the virtual you—owned and controlled by you.
Better integration would support life events such as marriage. Melanie Swan,
founder of the Institute for Blockchain Studies, explained: “The blockchain—with its
structure that accommodates secure identities, multiple contracts, and asset
management—makes it ideal for situations such as marriage because it means a
couple can tie their wedding contract to a shared savings account, and to a childcare
contract, land deed, and any other relevant documents for a secure future together.”
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Some have suggested that the blockchain could become a public documents registry
outside any government sanction or involvement. The world’s first blockchain-
recorded wedding took place at Walt Disney World, Florida, in August 2014. Smart
prenuptial contracts, anybody?
Beyond integrated services, governments could register and manage documents
with transparency and reliability. Consider the staff time spent in issuing, verifying,
updating, renewing, and replacing people’s official government records. In addition to
ensuring document veracity, blockchain-enabled registration through peer-to-peer
networks would support self-service, where people verify a document through the
network, not through a registrar, as well as personalized service—when you generate
an official document, it automatically contains your relevant information and access

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rights to that information, and tracks who accesses and uses it in the document
metadata.
For example, the U.K. government is investigating the use of the blockchain in
maintaining numerous records, especially for ensuring their integrity. Paul Downey, a
technical architect with the U.K. Government Digital Service, noted that the perfect
register “should be able to prove the data hasn’t been tampered with” and should store
a history of the changes that have been made, plus “be open to independent
scrutiny.”
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Blockchain-based systems can infuse efficiency and integrity into document
registries of all kinds and many other government processes. Let’s combine supply
chain management with the Internet of Things to tag a new piece of equipment with a
smart chip that communicates its provenance, ownership, warranties, or special
information. Government procurement offices could track items and automate
processes at every step: purchasing, releasing payment, paying sales taxes, renewing a
lease, or ordering an upgrade. That’s simply better asset management, reducing
administrative costs to taxpayers while increasing revenues to governments.
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