Christopher ZeniosSix years on it seems people are able to separate the two and appreciate the technology of blockchain. Now both governments and businesses are eager to integrate and create blockchain projects.
There are numerous examples of Governments commissioning blockchain projects, one example in Canada. The Canadian government awarded a contract for steel tracking to onchain. Another example is in Davos Switzerland where the government is in talks to use blockchain for data collection and environmental solutions. Another example of governmental use is Thailand who is set to integrate blockchain technology for travel visa systems.
Although the blockchain community is happy to see governments embrace blockchain technology not everyone is convinced. Lior Yaffe is the director and co-founder of Jelurida, a blockchain software company that maintains the Ardor and Nxt chains and develops enterprise solutions. Yaffe commented,
permissioned blockchain solutions alone cannot unleash the full potential of the technology since they ultimately depend on the goodwill of only a few parties. “Yaffe went on to comment on the need for “hybrid solutions where the main consensus engine is public and decentralized, while specific applications (for example child chains) can be permissioned for specific use cases by specific actors.”
The reason why governments are commissioning permissioned blockchain is to avoid building on Bitcoin and Ethereum. The public ledgers have a trustless nature with the difficulty of enforcing KYC and AML. It appears the words Bitcoin and Ethereum still hold a reputation of doubt whereas blockchain has been fully accepted.
Yaffe goes on to explain the main value of permissioned blockchains, it is to enable “cooperation between third parties who do not trust each other.” Examples of use could be governments “using their power to force competitive corporate entities to cooperate using a single ledger not controlled by any single one of them for the benefit of their taxpayers”. Voting is another example of use according to Yaffe “shareholder voting to government internal vote tracking to the city and even national elections,” he added:
“But in order to get blockchain voting, you also need to figure out identity, which is a very privacy-sensitive application. For this to materialize we need stronger built-in privacy mechanisms such as zero-knowledge proofs to become more mature and harder to misuse. Chains that support these functions will always become semi-public for people to be able to review and audit them. The more public and global blockchains become adopted (at government and enterprise-level), the higher the trust they will earn that they cannot be manipulated”
As blockchain technology is embraced, scaled and tested by government agencies, banks, and others it will prove to have a trustworthy reputation whose data and integrity are reliable.
Image source by CB Insights
