New British Report Looks to Blockchain to Improve Function of Government
A new report from the UK argues that the efficiency and public perception of government can be improved using blockchain technology. However, it fails to convincingly make the case that distributed ledgers are the solution to complex social problems.
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Great Hope Placed in Blockchain to Solve Societal Problems
The report, entitled “Unlocking Blockchain: Embracing new technologies to drive efficiency and empower the citizen,” was authored by British MP Eddie Hughes with the support of Freer, an initiative of the Institute of Economic Affairs, a British think tank promoting free market economics. Hughes argues that blockchain — along with other technologies — can help increase public trust in government and improve its efficiency.
Yet, in the end, the report is less than satisfying. It places a great deal of hope on what is effectively a new form of database technology to solve large-scale societal problems, with an unknown chance of success.
Proposals to Increase Government Transparency, Improve Efficiency
In the report, Hughes says that blockchain and distributed ledger technology (DLT) can be used to increase citizen’s trust in government. The report talks about the “trust deficit” that British citizens have towards their government, which is backed up by data: PR firm Edelman’s Trust Barometer found that in 2018 only 36 percent of the British public has trust in the government.
In order to rebuild this lost trust, Hughes suggests giving citizens back control over their personal data:
“Trust in public services grows as they become more transparent. Citizens should be able to own, see, hold, and control the use of their own data—the data that others are so keen to access, and that our security and wellbeing increasingly depends upon.”
The report examines Estonia, a country where citizens can do nearly all their transactions with the government online except “purchasing property, getting married, and getting divorced,” as Hughes notes. As detailed by Andrew Keens in his book “How to Fix the Future,” the system allows citizens to know when government officials have accessed their data, to the point where an Estonian can even see when a police officer ran their car’s license plates.
It should be noted, however, that Estonia’s system isn’t a blockchain in the sense of having multiple distributed ledgers like Ethereum does. As writer David Gerard points out on his blog, the actual system used by Estonia, called KSI Blockchain and made by a company called Guardtime, uses one part of the blockchain system, hash-linked time-stamping (also known as a Merkle tree), to ensure data integrity.
Hughes’ point about transparency leading to public trust is backed up by the data, as both Estonia, as well as Singapore, which has also implemented a national digital ID card system, do very well on that measure. In Singapore, 58 percent of the public trusts public institutions, according to 2018 data from Edelman, while trust in the police and legal system is also comparably high in Estonia.
Hughes, however, dismisses the Estonian model on privacy grounds, saying that “any kind of mandatory state-run ID card is neither a viable nor a desirable solution for the UK.” Yet, if personal data can’t be trusted with the government, then how will “[c]itizens … be able to own, see, hold, and control the use of their own data” as Hughes puts it? It appears through blockchains run by private entities.
Applications Seen in Healthcare, Banking, Food Supply
In the report, Hughes sees three areas where blockchains can be used: healthcare, food supply chain, and banking. He gives several examples. For healthcare, he says blockchain would allow results of medical tests to be easily shared throughout the care system in a secure and transparent way, leading to quicker diagnosis and better treatment.
While this is a possible area where blockchain could be used to give citizens control over their data in the UK’s publicly run National Health Service (NHS), it’s not clear that this would lead to a more general improvement in public trust of government. The NHS is already generally very well regarded by the public, outranking both the monarchy and the army in terms of popularity as of 2013. It’s unclear if giving patients more control over their medical data would improve public sentiments of anything other than the NHS.
The report also mentions food supply chain as another area could benefit from a blockchain system to increase transparency and trust. There are industry consortiums already working on this. And it makes sense in terms of Hughes’ thesis, as government is generally the first institution the public blames when people become sick due to impure food.
But when looking at a third area, banking, Hughes focuses mostly on the promise of blockchain to cut costs in the financial industry.
There are several other ideas in the report, such as having a new “Chief Blockchain Officer” in the government, creating a one percent spending cut target of government operations, and having a national blockchain competition to encourage innovation. It’s unclear what chance the proposals have of becoming law in the UK, though the Financial Times reports that Prime Minister Theresa May was enthusiastic about the report and suggested Hughes distribute it to all members of parliament.
A Case of Techno-Utopianism?
The report seems to imply that technology has the ability to solve large-scale societal problems without having to deal with messy politics. History, however, suggests that technology is a double-edged sword, offering benefits but also drawbacks. Recent examples of the downsides include Facebook’s numerous and ongoing failures to protect customer’s data and the potential dangers of smartphones and social media.
What’s your take? Should more governments continue deep dives into the possibilities of blockchain tech? Or is blockchain + governments over-hyped? Sound off in the comments below.
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