Free Market

Can the Blockchain Benefit the Beehive State?

While many Utahns are familiar with bitcoin and other cryptocurrencies, there is less familiarity with the underlying framework, the blockchain. This innovation in technology has created a way to decentralize information in a trustworthy and secure manner.

Currently, companies or the government operate databases and computer systems that contain important data. These systems are subject to failure, corruption, hacking, and more. They are centralized; the information is generally concentrated into one location, and in some cases others as backups.

Blockchains involve a network of computers all running the same code, updating their systems with the same data. This eliminates a single point of failure, and it ensures that there is no fraudulent manipulation of data by a corrupt person with access or an external threat. In short, the blockchain enables records to be created that can’t be manipulated, even by powerful politicians or business magnates.

So the blockchain upends traditional information structures—a feat that not only can revolutionize entire industries, but the government as well.

On the business side, consider a simple example: the worldwide distribution of goods. Supply chain management is notoriously complex, with assets, paperwork, and money changing multiple hands at various locations and time. There are multiple points of failure, many inefficiencies, and plenty of potential problems. The different parties involved often distrust one another and have to rely on faith and credit. Putting this process onto the blockchain creates a ledger of data that all parties can rely on, automating their workflow and allowing them to depend upon the system with confidence because it is secure and trustworthy. Programmed code is trusted rather than people.

This same opportunity of increased efficiency and trust is sorely needed in government, which is famous for the opposite of these twin traits. And many states are taking interest.

Delaware has an official blockchain initiative. So does Illinois, which is piloting several projects. California has a working group. West Virginia is piloting an effort to vote using blockchain tech. Colorado is interested in moving recordkeeping to the blockchain. And there’s more.

The benefits of blockchain to streamline bureaucracy may be immense. For example:

Speaking to Illinois House members at a hearing in late February, George Chikovani, an executive at the Innovation and Development Foundation, said new blockchain systems could focus on other kinds of transactions, such as exchanging titles for houses, cars and more. He argued that instead of relying on one government agency’s computers, blockchain could decentralize the whole infrastructure for these sales, making them faster and cheaper, compared to what would normally be a slow, complicated trudge through bureaucracy.

So why not Utah?

Historically, the state has been a leader in introducing new tech in government, receiving many awards. Last year, the Center for Digital Government awarded the beehive state first place for “State Government Experience,” saying that Utah puts “its entire technological toolbox to work for its citizens.”

That won’t be true for very long if the state does not begin leveraging blockchain technology. Out of dozens of ideas that can be explored—land records, birth certificates, voting, identity, public meetings, business registration, legal tender laws, document storage, communication, and more—there’s clearly one or more that community leaders should coalesce behind and get to work.