5 Significant Ways Governments Can Benefit From Using Blockchain
Blockchain technology first thrust into the scene with the introduction of the first cryptocurrency. Over the years, however, the technology has proven to be beneficial to more than just the financial industry. Although governments worldwide have primarily been against adopting blockchain and cryptocurrencies, many are now warming up to the technology.
Blockchain’s features, such as transparency and immutability, make it a viable option for many government services. The technology’s usability ensures that governments across the world can use it to provide efficient services to its citizens. So, what benefits does it pose to governments? And why should more sovereign nations think of ways to incorporate blockchain into their operations? Here are five significant reasons.
Building Trust with Citizens
Most citizens have low trust for their government. This trust issue can, however, get resolved by the government implementing the use of blockchain. The transparent nature of blockchain means that members of the public can track all the transactions in the blockchain. Therefore, citizens have access to public funds data and can verify the government information on expenditure. This transparency increases citizens’ trust for the government.
Sweden is an excellent example of a country that is using blockchain to build trust among its citizens. The government of Sweden established blockchain-based land registries. Therefore, the concerned parties can access documents on land registries, which resolves and prevents property disputes.
Georgia also launched a blockchain integrated land registry system. This government aims to establish straightforward rights for property owners in Georgia; thus, building trust with its citizens. This blockchain-based land registry system is successful because up to now, there are over 1.5 million land titles registered.
Reducing Costs and Improving Efficiency
In daily operations, governments usually incur huge costs, which they can reduce by incorporating blockchain technology. It can also improve the efficiency of some government operations. For example, implementing blockchain technology in payment and accounting systems ensures that reconciliation of funds expedites, the cost reduces, and the audit is more accurate. Blockchain also gets rid of third parties who act as intermediaries, hence, saving on the cost incurred when they are involved.
The government of Dubai is incorporating blockchain technology in document processing. The government has estimated that it will save a lot of hours and around 5.5 billion dirhams in administrative costs annually. The saved resources will improve the growth of Dubai’s economy.
Securing Sensitive Data
The immutable nature of blockchain enables data to be more secure and hack-proof. The government is a significant target for hackers, and therefore, incorporating blockchain technology is critical to protect its sensitive data.
Blockchain technology doesn’t permit the modification of government data stored on it. Therefore, the crucial data about a country and its citizens remain mostly safe from hackers.
Some government agencies, such as the Department of Homeland Security (DHS) in the USA, are incorporating blockchain technology to enhance cybersecurity in the country. DHS is funding some projects to research on the best blockchain approaches to use to strengthen cybersecurity. Therefore, it is evident that blockchain technology can revolutionize how online data and identity are managed.
Reduced Corruption and Abuse of Public Funds
Blockchain uses public ledgers, and therefore data is visible to citizens when the government incorporates blockchain technology. Thus, it is challenging to abuse public funds because the members of the public are monitoring them. The government’s implementation of blockchain technology reduces corruption and saves public funds from embezzlement.
Through the incorporation of blockchain technology, the city of Valls in Spain has established a Municipal Data Portal project. This data portal will enable the residents to view public funds data and how their resources get utilized. Therefore, corruption will end because members of the public keep an eye on how their funds get utilized.
In another use case, the government of Mexico plans to establish projects on local agricultural activities integrated with blockchain technology. Local farmers will have access to the information concerning their farm produce and general farming activities.
Reduction of the Labor-Intensive Process
Blockchain technology is machine intensive, and therefore it saves the cost of paying laborers. Incorporation of blockchain technology saves the time used when many people work on a single process. This technology also enhances the accuracy of outcomes, thus, reducing the drawbacks that come with labor-intensive processes.
The Tanzanian government got rid of 10000 ghost workers who got registered in the public sector through blockchain technology implementation. The blockchain system facilitated the audit of public payroll and saved the Tanzanian government 195.4 million USD used to pay ghost workers every month.
Blockchain technology is essential to citizens and governments using this technology. Through the use of blockchain, governments can end corruption and focus on the country’s productivity. Blockchain technology ensures a country’s resources are appropriately utilized, which, in turn, reduces the poverty of individual citizens.
Operations carried out using blockchain technology are fast and less costly. Blockchain, therefore, enhances efficiency and saves public funds. This modern technology also protects government information from unauthorized personnel. Undoubtedly, blockchain technology has several benefits to offer, and governments across the globe ought to embrace this new way of doing things.