Blockchain in Government: Hollow, but hopeful

For Estapé, the most promising use cases are those that enable governments to trace food or medicines or those that empower “citizens with the control of their identity and all personal data”. There are also hopes that in countries “where public trust in government runs low” (for instance, due to corruption), blockchain solutions can provide “trusted information about individuals and activities, as they ensure immutability and non-repudiation”.

Blocked up

Despite great promise, the blockchain revolution has failed to materialise in the public sector. Very few projects “have gone beyond proof of concept or small pilots” and there are no success stories where “transformative services have proved a significant social impact”.

On the surface, you wouldn’t have guessed the public sector is devoid of blockchain substance. Headlines abound with revolutionary government case studies, but they tend to obfuscate the (very ordinary) truth. “Too many marketing announcements are just smoke and mirrors,” says Estapé.

The hype can be traced to “inflated opportunities, misunderstandings, and much confusion about how blockchain works.” This is why Estapé’s role in researching the technology is so important. It’s imperative that government agencies get a handle on what blockchain’s strengths and weaknesses actually are. “The blockchain is a disruptive technology, but to take real advantage of it, we should have a clear understanding of its limitations,” he explains.

For starters, blockchain simply saves logs and doesn’t record detailed information. It is also neither “cheap or fast”. As has been documented before, scaling blockchain networks is a mammoth task. A fundamental criterion for any successful public sector digital service is that it can serve all of its citizens. Applications that work in the research petri-dish but buckle in the real-world are rubber ducks. Then  there’s privacy. It’s hard to see how a transparent ledger of immutable records safeguards citizen data. “This a big issue in government transactions,” says Estapé.

Nevertheless, testing blockchain applications in sandbox labs is still the “best way to learn” and “increase blockchain understanding”. Sandbox labs ensure any government agency can “prove a concept with small effort and cost, using the ‘fail fast, fail cheap’ approach”. “In these labs, we have the opportunity to evaluate some critical privacy and legality implications, especially regarding the intentional “right to be forgotten” and accidental private key destruction,” explains Estapé.

Additionally, it’s important to have a full view of the tech options out there. The digital transformation expert recommends that government agencies objectively compare blockchain solutions to alternative technologies when solving business problems. If they do not focus on “addressing the needs of users and exploring solutions to meet that need” they risk “creating a problem where we already had a good solution.” Additionally, public agencies should monitor the market to look for “opportunities to enhance service delivery” while viewing “with scepticism claimed ‘successful uses’ that are too often full of hot air”.

Nevertheless, it is still early days. Estapé says we’d be foolish to disregard blockchain just yet. Of course blockchain has failed to live up to its potential – it’s potential is so great. Estapé notes Gartner’s latest blockchain hype cycle report which places blockchain as “sliding into the trough of disillusionment” (as experiments thus far have failed to produce results). This doomsday-sounding dynamic is common with emerging technologies. And Estapé expects the market to climb out of the trough as the “technology matures, and pragmatic use cases uniquely supported by blockchain continue to roll out.”

“Blockchains have immense powers that are waiting to be unleashed. Public authorities must build their knowledge in this area and consider blockchain’s possible applications if they do not want to become irrelevant in the future.”