A better life for citizens thanks to blockchain is not an illusion
Most people have already heard of Blockchain in the context of Bitcoin. But the technology promises solutions at all levels of our lives, not least in the public sector. Here, the blockchain could provide transparency in administrative actions, automate processes and thus reduce costs. Some even speak of a revolution within the public sector. Nations all over the world have recognized this. Even the German government, which has paid little attention to technology so far, is planning to implement it. What can governments do with blockchain? Fantastic things – here are some actual things already happening.
Do you know thi feeling? An important election is coming up on Sunday, but you don’t feel like going? On the one hand, you want to make use of your democratic right on the other you don’t want to stand in the long queue of the polling station in your free time. Unfortunately, It’s already too late for a postal vote. So what now?
Well… why not vote over the internet? I mean it is the twenty-first century, right? Why would we still vote as we did 100 years ago?
The answer is quite simple: We want to prevent hackers from interfering with the democratic process.
However, with the blockchain, nothing stands in the way of voting from home or anywhere else in the world as it cannot be hacked. The small Swiss town of Zug, which is also known as „Crypto-Valley“ due to its progressive use of technology, has already recognized this potential. Since 2017, the residents of the city own a blockchain-based digital identity, which can be used to vote since 2018. This method is of particular interest in a country like Switzerland, which has elements of direct democracy. No wonder, then, that the Swiss federal government is planning to introduce a nationwide „E-ID“.
Since the Midterms last year, the US state of West Virginia has been using the Voatz election system for its soldiers abroad. In its presidential elections in 2016, the US had only an 11% turnout among its hundreds of thousands of foreign servicemen. The reason is simple: either the soldiers were not sent a request to vote, or their ballots arrived too late for counting in the US. This problem is now solved, at least for West Virginia.
How does it work? Every eligible person gets a wallet, a digital purse, with one coin. This coin corresponds to one vote. The coin is sent under a pseudonym to the polling station and is automatically counted. The advantage: Voting from all over the world, no lost ballots or incorrect counts. The challenge, on the other hand, is to ensure the secret of the election guaranteed by the constitution. However, this problem can be solved both by law and by the blockchain technology itself as Blockchain-based solutions for anonymity have been developed and implemented for years.
Social benefits and development aid
Social benefits account for a large part of the federal budget. However, a not inconsiderable part of this money does not reach the needy due to ineffective structures and heavy workload. The blockchain could remedy the situation and thus relieve the burden on social security funds so that more money would reach the unemployed and pensioners. Smart Contracts could be used to check whether the applicant is entitled to the benefit he or she applied for automatically and if so, the payment is being made directly. An opportunity for automatic payment would also be an advantage in the area of development aid to ensure that the benefit arrives where it is needed. Thus, the diversion of funds by political regimes could be prevented.
The UK Department of Labour is currently working with GovCoin to test the payment of social benefits. The money is paid to the smartphone of the unemployed, who in turn uses the smartphone for payments. Advocates for data protection strongly disapprove as authorities record the payments of the welfare recipients to be able to check them for social fraud. In addition, they hope that the analysis of payment transactions will enable them to adapt state benefits in the future.
Our healthcare system is characterized by a high degree of specialization. Patients usually first visit their family doctor, who will refer them to a specialist or hospital if necessary. This branched system results in the patient’s file going through many hands.
Using a block-chain-based patient file, the patient could release individual data or the file as a whole to the respective physician, who could then add his or her findings to the file. In the event of an accident, the attending physicians would not first have to call the family doctor to ask about the prescribed drugs which could lead to adverse effects of the drugs to be administered in the hospital. A glance at the patient file is enough. Existing medical examinations would not have to be repeated due to a lack of information and then send by fax. Unnecessary waiting times can thus be eliminated. This system could also be used to record, manage and forward doctor’s fees to the health insurance provider.
The living will and the organ donor card could also be transferred to the blockchain so that relatives would not have to make difficult decisions.
Estonia and Dubai are already working on such solutions.
Environmental protection and civic participation
Several further fields of application of the blockchain would be conceivable. Guido Weiland, head of the Innovation Center at Materna GmbH, expressed an idea to reduce emissions: Citizens should be given a financial incentive to set up measuring stations with which the city can obtain a more accurate picture of emissions in addition to its own facilities. For example, citizens could upload their measured data to an online portal and in return receive a coin issued by the city, which they could exchange for museum visits or other municipal services.
Administrative transparency and effectiveness
Should public authorities enter into transactions with the private sector using private administrative law, all transactions could, where appropriate, be publicly registered in a blockchain. Also, many of the recurring contracts could be automated using Smart Contracts, and thus reduce bureaucracy.
Communication between authorities
Effective communication between authorities can quickly become a challenge, especially if each authority is paper-based or if the authorities, ministries or organizations work with systems that are not interoperable. The traditional paper-based file leads to frequent duplication or unnecessary sending of files between each other. The blockchain could also help here: Digitization could make parts of the file work redundant. Joint systems between states, with the EU, or with the UN could lead to effective data exchange between them, which would also strengthen international cooperation.
In the future, even the state will experience increasing digitalization. In April 2018, 22 member states of the European Union signed a declaration to establish a European blockchain partnership to lead Europe into the „pole position“ in matters of blockchain. Mariya Gabriel, Commissioner for Digital Economy and Society, made the following statement:
“In the future, all public services will use blockchain technology. The Blockchain is a great opportunity for Europe and the Member States to rethink their information systems, to promote user trust and the protection of personal data, to help create new business opportunities and to establish new areas of leadership, benefiting citizens, public services and companies. The Partnership launched today enables Member States to work together with the European Commission to turn the enormous potential of blockchain technology into better services for citizens.”
But the Estonian Vice-President of the Commission also warned that we would need to „catch up a lot.“
In November 2018, the German government announced a blockchain strategy to be developed by summer 2019 to create suitable framework conditions for the technology and to tap the potential of the technology to implement it in the areas of economy, healthcare and development aid.
This will be necessary so that Germany can keep pace with other nations. As a result of globalization, states are increasingly competing with each other. Where in the past the nation held a monopolistic position towards the citizen or the company, the digitalization of our lives will create the possibility of operating with the entire world from anywhere you want. Countries such as Estonia and Dubai are adapting to this trend. They are leading the digitalization of their administration and reducing bureaucracy to serve citizens as service providers rather than imposing excessive bureaucratic hurdles. This will increasingly attract people from all over the world. In particular, the „high potentials“ who are being courted can choose their center of life and will make their decision for or against a state dependent on the „state services“ offered.