Although blockchain technology was originally designed to be used as the network architecture of Bitcoin, it has now been used in various fields. One of these fields is government governance, where distributed systems play an important role and have great potential to improve the work of the public sector.


Why would governments want to adopt blockchain technology?

Blockchain technology has many potential advantages in government governance, and the main reason why government agencies consider using blockchain technology is that it can increase decentralization, improve data integrity and transparency, and better improve efficiency and reduce operating costs.


Decentralization and Data Integrity

There are many different ways to build a blockchain, but no matter what method is used, there is a certain degree of decentralization. This is because the blockchain network is maintained by a large number of computer nodes, which run synchronously to verify and confirm all data. And these nodes need to reach a consensus and reach a consensus on the state of the database in order to achieve a high degree of authenticity.

Therefore, blockchain systems are highly immutable, and their frameworks can be customized to specific needs, ensuring that access and modification of information can only be performed by authorized parties. In fact, each management agency can act as a validator and participate in the distribution and verification of data. This will greatly reduce the possibility of data tampering and fraud.

At the same time, non-governmental organizations, universities, and citizens can act as verification nodes to form a higher degree of decentralization. In addition, these verification mechanisms can also prevent some common types of errors such as data input errors (for example, data blocks lacking basic information or being rejected by distributed network nodes).

In addition, blockchain is likely to play an important role in the election process one day in the future. Fair and open elections are the cornerstone of democracy, and the high immutability of blockchain makes it an excellent solution to ensure that votes cannot be tampered with. In addition to providing additional security for voted data, blockchain is also likely to make secure online voting possible. Previously, West Virginia experimented with this technology in the 2018 US midterm elections.


transparency

Blockchain databases can be used to store and protect government records, making it difficult for anyone to manipulate or hide information. Currently, most government data is stored in centralized databases directly controlled by the authorities. This data is obviously in the hands of a few people, making it easy to manipulate behind the scenes. In this case, blockchain is a better choice because it can distribute the storage and verification process of data to multiple departments, thereby effectively achieving decentralization of power.

Therefore, blockchain can be used as a highly transparent database to reduce (or remove) the need for trust between government agencies and the public. For example, some European government agencies are exploring the potential use of blockchain-based registries to reduce property disputes. This distributed system allows government agencies and any citizen to access and verify data, and each party has the right to have a copy of official documents and statements.

At the same time, decentralized blockchains can also provide permanent access to records so that law enforcement and supervisory agencies can expose corruption and abuse of power. And blockchain systems can also reduce or eliminate the need for intermediaries in data sharing and financial transactions, making it more difficult for government officials to illegally transfer funds through a series of opaque entities.


Improve efficiency

Another major reason why blockchain can be used in government management is that it can maximize the efficiency of state agencies and thereby reduce operating costs. Since government agencies rely on tax funds to operate, it is particularly important to use the budget wisely. Blockchain systems and smart contracts can automate tasks and workflows, which will greatly reduce the time and money spent on "bureaucratic procedures."

Reducing administrative expenses is not only practical, it also helps to improve public trust and satisfaction. Lower costs and greater efficiency lead to higher approval ratings for administrative agencies. At the same time, the government can use the funds gained from lower operating costs to invest in other areas (such as education, safety, and public health).

Another area where blockchain technology can be used in government is taxation. Because of the blockchain's distributed ledger, the transfer of funds between parties becomes more streamlined (as per pre-set). This has the potential to reduce administrative costs associated with collecting, distributing taxes, and enforcing tax laws. For example, tax agencies can provide taxpayers with greater security by storing records and processing tax returns on a private blockchain, effectively protecting taxpayers from fraud or information theft.


Disadvantages and limitations

Although blockchain can effectively improve data integrity, transparency and efficiency, its use in the public domain still has certain limitations.

Interestingly, the immutability of blockchain can also be a disadvantage in some cases. The immutability of data makes it particularly important to input data correctly before verification, which means that some measures must be taken to ensure the accuracy of initial data collection.

Although some blockchains were initially designed to be more flexible in their execution, that is, to allow data to be changed, this change process requires the support of most nodes (consensus), and because the system is decentralized, the final result is a disagreement. However, this drawback can be quickly resolved on private blockchains that do not require a high degree of decentralization.

Once data is stored in the blockchain, it is permanently available to those who have access to it, so privacy issues are a concern. This may conflict with procedures for sealing documents, such as the expungement of criminal records. In some countries, the digital right to be forgotten is recognized in the laws and regulations, and those immutable records may violate existing laws or judicial precedents. The use of destruction functions or cryptographic techniques (such as zk-SNARKs or other types of zero-knowledge proofs) may solve this problem.

Finally, it should also be understood that governments themselves may have barriers to blockchain adoption. In some places, local government agencies may simply be unaware of the value of blockchain technology, causing them to overlook its many benefits. What’s more, governments where corruption is widespread are likely to resist the use of blockchain technology to protect their own interests.


in conclusion

Although blockchain may have some drawbacks in some aspects, there are still many viable applications of the system in government governance. From improving transparency to simplifying the tax process, distributed networks can be used to help governments improve efficiency and thus form a higher level of citizen trust. Some applications are still in the conceptual stage, while others have already become pilot projects in many countries.

It is worth noting that digital systems have been used in government governance long before the advent of Blockchain (in the early 21st century). Estonia is one of the pioneers, launching a digital identity program in 2002 and becoming the first country to hold elections over the Internet in 2005. In 2014, the Estonian government launched the e-Residency project, which mentioned the use of Blockchain technology to manage data and provide greater security for digital data.