Merging the Federal Government and the Blockchain

People can regain trust in the government. According to K. Werbach, “At a time when trust in the government is “at an all-time low,” systems that don’t rely on trust have tremendous potential” (Werbach, 2018). If integrated successfully, the blockchain solution can also decrease costs and increase security. The government also does a large amount of record keeping, which blockchain can streamline, as information, “can be put on a blockchain to make [it] more secure and more accessible” (Werbach 2018). Another use case that adds efficiency is distribution of benefits, such as Social Security. Smart Contracts can allow the government to make quick, predetermined payments.

According to J. Ubacht, “Security, scalability and flexibility are identified as the main technological challenges” (Ubacht, 2018). This could make blockchain implementation hard for the government. The blockchain is also not 100% secure (Maruti, 2022). A 51% attack could ruin the entire system and leak a substantial amount of information to bad actors. Finally, blockchain regulations would need to be in place before the government can adopt it. This could take a notable amount of time due to how new blockchain technology is (Maruti, 2022).

Here are two potential ways the blockchain could be implemented. One is a “3 layer” design, which splits the blockchain into groups that fulfill different roles - the Social layer, which deals with human actors, culture, etc., the Data layer, which tracks data and records, and the Technical layer, which includes protocols and code to keep the blockchain functional (Worldbank, 2021). The second involves addressing problems at a slower methodical pace. Once a problem has been identified, the government could determine the costs, technology capacity and compatibility, etc., needed to address the simplest form of the problem, develop the blockchain needed to fix it, and scale it to more complex variations of the problem (McKinsey, n.d.).

Some US States already use blockchain for simple tasks. For example, “In Delaware, the blockchain is used for corporate share issuance” (Werbach, 2018), and in, “West Virginia [, they] just did a pilot test to use the blockchain for voting in its recent primary” (Werbach, 2018). The following infographics include other potential use cases for the government and why they could be beneficial.