Blockchain for Government Has Already Arrived

West Virginia Capitol Dome in Charleston

West Virginia Capitol Dome in Charleston Theodore P. Webb /


Connecting state and local government leaders

COMMENTARY | State governments are testing projects—and, no, it’s not (just) about cryptocurrencies.

Blockchain technology is perhaps the most talked about—and yet the most misunderstood— emerging technology in the world today.

Widely viewed through the lens of cryptocurrencies, surveys have shown that consumers are largely aware of  Bitcoin, the most well-known cryptocurrency, but do not know or understand the blockchain technology that is the technological foundation for Bitcoin and hundreds of other cryptocurrencies.

Blockchain technology—which creates secure, transparent and tamper-proof transaction and data records—has broad applications and is used by major corporations and forward-thinking policymakers to make a wide variety of corporate and government operations more efficient and secure.

But blockchain won’t truly realize its tremendous potential as the technological infrastructure for everything from records management to financial payments and supply chain management unless the we take steps now to nurture it.

While tech analyst firm Gartner has estimated that blockchain technology could be worth $3 trillion in private business value by 2030, it also holds tremendous potential for solving intractable problems in the public sector, according to a new CompTIA report.  

Over the past few years, blockchain pioneers at the state, local, and federal levels have been exploring ways to capture the technology’s various benefits, such as easier audits, enhanced cybersecurity, simplified data sharing and consolidation of databases; and end-to-end visibility into an entire network.

Close to 20 states have either started pilot programs, enacted blockchain legislation or are considering bills. States could use blockchain with management of their programs, such as Medicaid, unemployment insurance, workers’ compensation, student loans and tax collection.

West Virginia announced recently a blockchain-powered pilot program that is intended to securely record the votes of active duty military service members who are serving overseas.

Illinois is eyeing blockchain for IDs and public asset management. Earlier this year, an Illinois government task force detailed in a report that using a blockchain-powered platform would allow residents to access and store all of their ID information, such as tax records, voting histories and driver licenses as decentralized notes.

Delaware envisions a blockchain network for firms incorporating in the state. Later this year, the state plans to launch a proof-of-concept for a blockchain-based business filing system that will allow corporations to take advantage of smart contract technology to automatically track stocks and collateral assets in real time. This technology will also give lenders and borrowers a more efficient and accurate record with which to transact business and meet state and federal regulations.

And in Colorado, a bipartisan bill before lawmakers encourages state agencies to research uses for blockchain technology to potentially reduce costs by eliminating redundancies and preventing fraud. The bill’s advocates and the state’s blockchain community said it has a greater message: Colorado can be a powerhouse for the burgeoning technology, and the public sector is integral in making that happen. But more must be done. In order for blockchain technology to truly become the technology that powers government programs in a secure and transparent way, policymakers must encourage more innovation and experimentation.

First, to facilitate the maturation of this nascent technology, Congress should create a working group of private industry, academics, non-profits, and trade associations to provide recommendations on how to plan and encourage the growth of blockchain technology. The working group should make actionable recommendations on how to create an efficient regulatory environment, industry standards that safeguard security and reliability, and best practices for how government agencies can begin to adopt blockchain solutions. This model can also be applied on the state level.

Second, the creation of regulatory “sandboxes” will be key to ensuring that blockchain innovators can experiment with public and private sector technological solutions without being penalized. Sandboxes also will help regulators to craft rules that encourage even more innovation.

State and federal governments have as much to gain as businesses if blockchain technology is given the room to live up to its promise. Acting now to help harness the blockchain revolution will go a long way to helping make sure that we can make the most of this transformative technology in the future.

David Logsdon is the Senior Director of New and Emerging Technologies at CompTIA Advocacy.

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