Blockchain in public administration and its benefits

24 January 2020

One of the most important duties carried out by public authorities is maintaining a record of our sensitive data: properties we own, people we are married to, taxes we pay, businesses we manage, criminal offences we commit, and so on. This is something that has to be done with extreme care and precision, as the minimum issue (e.g: data not matching, unauthorised access) leads to serious service malfunction for citizens. It is no surprise, then, that a lot of bureaucracy is involved, and a lot of paperwork is necessary every time we need to amend or cancel any data.

However, we also know that Blockchain has the potential of changing the way public administration authorities keep our data, making their management more efficient and secure.

We now want to list possible applications of Blockchain in public administration, in order to predict how this new technology will improve our everyday life.

Why should we introduce Blockchain in public administration?

Finding advantages is not that hard: first of all, digitising all kinds of data speeds up bureaucracy and makes archives more reliable and usable. Making them available on a blockchain is even better.

First of all, Blockchain in public administration would mean an extra layer of security, as it would make data manipulation nearly impossible, because any update and usage of any kind of data is recorded on the public ledger and its thousands of copies distributed among the network members, and that can not be changed, so in case a malicious attack happens, the system would defend itself.

A Blockchain system can guarantee that no ownership transfers are made without authorisation, a principle that can be applied to housing, water, mineral, and oil extraction rights. Regarding legit transfers, they could be completed in a matter of seconds, avoiding some minor, but still annoying issues, for example: have you ever moved to a new home and received a bill or a communication from local authorities to the previous homeowner or tenant?

With Blockchain updating data in such a short timeframe, this kind of mistake would never happen again, as well as double invoices, wrong payments, and so on.

Local authorities could also be in total control of the buildings they own: how many times we came to know of unused buildings owned by public administration that could be refurbished and used for housing and services?

Delays in cases like this are very common, because in order to comply with the law, public administration bodies have to track the records of all past ownerships transfers, repairs carried out, and the original cadastral registration. Not to mention when such assets are sold to private investors, and deep ID checks must be performed (especially when the assets have been confiscated and previous owners might try to buy them again in illicit ways).

Thanks to the immutability of the records on a blockchain, operations like this can be performed within seconds.

Blockchain in public administration can even improve bookkeeping, thanks to its ability to track sales and tokenised assets, which, together with a smart invoicing system that works automatically when certain criteria are met.

Germany is setting an example

The German government is well aware of the high potential of Blockchains applications, not only in public administration, but in other fields, too.

With the green light signal arrived from the government in Q4 of 2019, the new Blockchain strategic plan is now being implemented on various levels. The goal is creating a federal blockchain for the whole public administration apparatus, taking advantage of all the opportunities Blockchain can offer, and become in the near future an attractive Blockchain hub for businesses and investors.

We believe Blockchain in public administration will change the way citizens get their services, and this will likely happen in the near future.

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