Are we headed for a blockchain revolution? Maybe so!
Two words – blockchain and cryptocurrencies – became major buzzwords in 2017. By 2018, citizens, taxpayers and the public at large have no option – we must understand these concepts because both will likely touch our lives in the very near future. Governmental agencies are already beginning to use blockchain – an incredibly interesting and potentially disruptive technology.
Blockchain technology was created in 2009 to support the trading of bitcoin, a form of internet currency or cryptocurrency. The future of bitcoin is still somewhat uncertain but it has been called “digital gold.” That’s because of its acceptance, which has pushed the total value of the currency to approximately $9 billion in the United States.
Blockchain technology is being called a second Internet by some and it is important to every individual because of the impact it is destined to have on all types of interactions in the future – with banks, healthcare organizations, government and almost every type of business. Blockchains display information from hundreds or thousands of sources and, once captured, the data cannot be copied or altered. It is transparent and available to everyone so essentially, it will remove all secrets if it is public information. But, secure data will be available only to the people who are impacted.
Blockchain technology has expansion capabilities and it is touted to be totally safe from cyberattacks because it is not held in one particular place. To understand the technology behind blockchain, think of a long string (or chain) of information that is segmented into blocks. Anyone with access can add to the information but only by creating another block in the chain. So, while everything is transparent, all data goes into separate blocks that no one else can access, change or delete. To those readers who are more tech savvy, this technology is comparable to a distributed database.
Unlike a normal spreadsheet or shared document, two people can be working on a blockchain at the same time. The accumulated history of blockchain documents cannot be altered. President Trump commissioned a research study to examine the use of blockchain for cyber security. Now state and local governments are getting involved, using the technology for all types of record-keeping and databases.
Three-fourths of recently surveyed state CIO’s say that blockchain technology is on their agendas, yet more than half of state agency heads say they are very unfamiliar with the technology. Since January, 11 states have considered passage of blockchain legislation. But, perhaps most startling of all is the fact that experts estimate that we may be only a few years away from an announcement by a major government that will be issuing a sovereign digital currency using blockchain technology.
The city of Berkeley, California, in desperate need of funding for city projects, is reported to be considering an initial coin offering for a cryptocurrency and that would be using blockchain technology. The city would create its own currency, digitally rather than on paper, and the currency would be backed by government municipal bonds. Sound futuristic?
Last November, the state of Illinois created a Legislative Blockchain and Distributed Ledger Task Force and the group’s mandate was to focus on integrating the technology into governmental tasks. The Initiative has already piloted a project to transition the state’s land registry to blockchain and is seeking to transfer all Medicaid documents.
Last year, the Arizona legislature passed a bill that not only defines blockchain and smart contracts but also encourages the use of blockchain for state government contracting. Since the law’s passage, the state has seen a growth in startup firms moving to Arizona to take advantage of the blockchain-friendly government marketplace.
South Burlington, Vermont, is likely to become one of the first cities in the country to set up a registry using blockchain. The hope is to become completely paperless, thereby saving money. City leaders also say the extra level of protection from cyberattacks is very attractive.
Florida may become the first state to use blockchain for a digital driver’s license system. A bill currently under consideration by legislators would pave the way for the state to create a blockchain database for driver’s licenses.
These examples of how blockchains are being used are just the tip of the iceberg. Technology experts throughout the world are proclaiming that blockchains may indeed change the world – and it may happen much quicker than we might think.
A new internet? A blockchain revolution? There’s no way to predict exactly what to expect, but blockchain technology is likely to create a digital revolution that will impact business, government and the economy in ways we can only imagine.