Distributed Ledger Technology Application by the Government

  • Building Trust with Citizens
According to the Pew Research Center, American trust in government is near an all-time low. Only 18 percent of Americans say they can trust the government to do what is right most of the time. Reasons for this distrust are numerous and complex, but there’s potential for Distributed ledger technology to contribute to a reversal of this trend. A key feature of Distributed ledger technology-based solutions is transparency through decentralization, allowing participating parties to see and verify data. A Distributed ledger technology for some citizen services could allow for independent verification of governmental claims. For example, the governments of Sweden, Estonia, and Georgia are experimenting with Distributed ledger technology-based land registries, enabling multiple parties to securely hold copies of the registry. This model could help quickly resolve property disputes or prevent them altogether. When citizens and governments share access to records, the potential for distrust decreases.

  • Protecting Sensitive Data

Breaches of personal data have become a fact of life in today’s digital world. The full names, Social Security numbers, birthdates, addresses, and driver's license numbers of 143 million Americans were exposed in the 2017 Equifax database breach. Just 2 years earlier, more than 20 million records of past and present government employees were stolen from databases maintained by the Office of Personnel Management.

As the default record keeper for society, governments are large targets for hackers. But rather than accept such attacks as the cost of doing business in the information era, they could be mitigated or avoided through the responsible deployment of Distributed ledger technology data structures. Such data structures harden network security by reducing single-point-of-failure risk and can make attempting a breach prohibitively challenging.

Government agencies, like the Department of Homeland Security, are getting serious about Distributed ledger technology applications in cybersecurity. DHS is funding Distributed ledger technology startups to conduct research and development and explore new approaches to cybersecurity. According to a DHS official “Distributed ledger technology have the potential to revolutionize the way we manage online identity and access the internet; this R&D project will help bring this potential closer to reality.”

  • Reducing Costs & Improving Efficiency

Government agencies must fulfill their mission while responsibly managing scarce resources. For government leaders walking this budget tightrope, blockDistributed ledger technology hain may be a much-needed lifeline. In the right context, Distributed ledger technology could reduce redundancy, streamline processes, decrease audit burden, increase security, and ensure data integrity.

Take, for example, the GSA FastLane process. This system—used by GSA to manage incoming proposals from vendors—currently takes 40 days to process incoming proposals, but GSA is hoping a Distributed ledger technology can help meet a target time of 10 days. A GSA official recently stated that a Distributed ledger technology could “lower the direct costs of analyzing a proposal by close to 80 percent.”

To further illustrate how Distributed ledger technology could increase efficiency, consider the federal government’s ongoing challenge with reconciling intragovernmental transfers. At any given time, there are trillions of dollars in unreconciled funds in the federal budget. The process of reconciling these funds is time-consuming, expensive, and creates budget uncertainty. A payment and accounting system that used Distributed ledger technology could provide a permanent audit trail and facilitate faster reconciliation.

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