Governance
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TL;DR
Although blockchain technology was initially designed to function as the architecture of , it's now being used in many different fields. One of these fields is that of governance, where distributed systems have the potential to greatly change the public sector.
A few main reasons exist for governments to consider using technology, even though it has numerous potential advantages in governance. The reasons for this include increased decentralization, data integrity, and openness, as well as improved efficiency and lower operational expenses.
A blockchain can be built in a variety of ways, but all of them, as distributed systems, feature some degree of decentralization. There are a number of in a blockchain network that work together to verify and validate all data. They must, in essence, come to an understanding and agree on the database's current state in order to preserve a single, distinct version of reality.
It is possible to adapt Blockchain frameworks to ensure that only authorized parties have access to or modify the data, making it virtually unchangeable. As a validator, various governmental entities may be involved, each of which would contribute to the distribution and verification of data. Data tampering and fraud would be considerably reduced as a result of this.
Another way to further decentralization is to involve non-governmental groups, universities, and citizens as validating nodes. Additionally, these procedures for verification can guard against other types of errors that are all too common, like data entry errors (e.g., a block of data that lacks fundamental information would be denied by the distributed network of nodes).
It's possible that blockchain technology could one day play a major part in the voting process. Democracy relies on free and fair elections, and blockchain's high level of immutability makes it an ideal solution for ensuring that votes can't be tampered with. Blockchain has the ability to make secure online voting a reality in addition to enhancing voting security at the polling station. As a real-world example of such a system, during the 2018 midterm elections in the United States, West Virginia used it.
Data may be stored and protected in a manner that makes it difficult for anyone to change or hide information using blockchain databases. Most government data is currently housed in centralized databases under the direct authority of those in charge. It's also possible to manipulate databases that are only in the hands of a few persons. Because it distributes the verification and storage of data to different people, a blockchain may be appropriate in those situations.
To reduce (or eliminate) the requirement for trust between government agencies and citizens, blockchain technology can be employed as a transparent database. Some European governments, for example, are looking into the possibility of blockchain-based property records to reduce the number of conflicts. It's possible to implement such a model using a distributed system that both government agencies and civilians may access and verify, and each side has a secure copy of the official papers and claims.
Law enforcement and watchdog groups may require permanent access to records stored on decentralized blockchains in order to ferret out instances of corruption or abuse of power. Additionally, blockchain systems could make it significantly more difficult for government officials to hide wrongdoing by routing funds through a variety of opaque private businesses. This would make it far more difficult to conceal.
Increasing the productivity of national institutions is another benefit of implementing blockchain in governance. Taxpayers want governments to be frugal with their resources, therefore this is critical. It is possible to automate operations and workflows using blockchain technology and smart contracts, which would save time and money.
Despite the practicality of reducing administrative costs, they can also improve public trust and satisfaction. Governing bodies' approval ratings are anticipated to rise as a result of increased efficiency and decreased expenses. Moreover, governments can increase expenditures in areas such as education, safety, and health care by reducing operational costs.
For tax collection, blockchain technology could have a significant impact. The use of ledgers built on the blockchain makes it possible to transfer money between parties quickly and securely. The administrative expenditures of collecting and distributing tax revenue and enforcing tax regulations might be drastically reduced as a result. Tax collection organizations, for example, may be able to better safeguard individual taxpayers from fraud or identity theft by storing and processing returns on private blockchains.
Some restrictions exist when it comes to the public sector's adoption of blockchain technology to improve data integrity, transparency and efficiency.
Imperturbability, which underlying many of blockchain's benefits, may potentially be a drawback in some situations. Because data cannot be changed once it has been entered, it is critical that records be entered accurately before validation can take place.
Some blockchain implementations may be designed to be more flexible, allowing for data to be altered, but this would require approval (consensus) from the majority of validating nodes, raising concerns about the system's decentralization and eventually leading to arguments amongst nodes. Even yet, in private blockchains with lower levels of decentralization, this problem might be rapidly remedied.
Finally, governments may obstruct the use of this technology. In certain circumstances, authorities fail to see the significance of blockchain technology, hence ignoring its many potential benefits. In more severe circumstances, governments may reject the use of blockchain technology in order to safeguard the interests of their own officials if corruption is pervasive and entrenched.
Despite these potential drawbacks, blockchain technology can be used in governance in a variety of ways. Distributed networks can help governments run more smoothly and gain the confidence of their constituents by increasing transparency and improving the revenue collection process. Despite the fact that some uses are still theoretical, numerous governments are already testing it out.
Although the blockchain was first created in the early 2000s, digitalized systems have been utilized for governance for much longer. With its 2002 debut of its digital identity program and its 2005 first Internet-based elections, Estonia serves as an excellent example. e-Residency, the Estonian government's digital data management and security program, was established in 2014 and mentions blockchain technology.
There are also privacy concerns, because records posted to a blockchain are forever available to anybody who has access to them. Expunction of a person's criminal record may conflict with this policy. Legal codes in countries that accept a digital right to be forgotten may also conflict with existing legislation or judicial precedent when it comes to immutable information. Burn functions and cryptographic approaches, such as zk-SNARKs or other , may be used to address these issues.