Revolutionizing the way information is stored and received, blockchain is one of the most influential technologies of the past decade. Mostly known for its success with the digital payment system, Bitcoin, blockchain also has potential to transform the public sector, and further, the way citizens interact with government. Many states are considering this potential, but are stuck asking the most basic question: How can the public sector implement blockchain? The first step is to understand exactly what blockchain really is.
Blockchain―What is it?
At the highest level, blockchain is termed a Distributed Ledger Technology (DLT): data within a blockchain is not controlled by a single, centralized entity, but rather, is held by millions of systems simultaneously. This “chain” of systems, or DLT, not only decentralizes data, but also ensures it is incorruptible, as each “block” of data in the DLT connects using highly advanced encryption technology. Further, you can share each “block” without exposing the entirety of the blockchain’s data, enabling data sharing without compromising sensitive information. Blockchain’s opportunity lies in the core of its model, as being able to securely share records (containing sensitive information such as birth certificates, marriage licenses, property deeds, professional licenses, etc.), could connect different government services and create more efficient processes.
States across the nation are intrigued by the potential of blockchain, but unsure of just how to implement it successfully. Illinois, through the Illinois Blockchain Initiative, has been a leader in exploring blockchain’s possibilities in government. Here is some of their first-hand insight and advice.
Blockchain in Government―Illinois’ Perspective
Sunil Thomas, Cluster CIO, State of Illinois, assisted in the creation of the Illinois Blockchain Initiative in 2016, and is now a leader in testing and implementing blockchain technology across state services. BerryDunn connected with Sunil in August 2018, and he provided unique advice for other states considering a blockchain initiative.
Specifically, Sunil broke down the processes the Initiative used to advance the technology within the state, and shared three key pieces of advice for successful blockchain implementation:
|1.||Host a statewide education campaign for blockchain to ensure all state leaders, including legislators, are equipped with a clear understanding of blockchain technology and its place in government. This education campaign may include extensive research into blockchain technology. Illinois, for instance, began their initiative by issuing a Request for Information (RFI) from vendors within the blockchain market. Additionally, Illinois collaborated with a local start-up that specializes in blockchain in order to gain subject matter expertise into blockchain development.|
|2.||Initiate organized pilot projects to guide the direction of blockchain in the state and select what use cases should go through the full implementation process. At first, you should use blockchain projects to complement current state services. This ensures continuation of services, and allows for comprehensive transition time. Additionally, states should ask the questions: Why shouldn’t this service be delivered using a traditional solution?, and further, Why do we specifically need blockchain for this solution?, before each pilot. This will help you leverage the right services, with the greatest potential, as pilot blockchain projects.|
|3.||Create a statewide roadmap for blockchain to build an ecosystem that supports the technology. This “Blockchain Roadmap” should highlight a navigation plan for both state and federal regulations, and ensure that blockchain procurement strategies are understood. The roadmap can include a comprehensive cost-benefit analysis to determine a return on investment (ROI) for specific services considered for blockchain leverage. Overall, the roadmap will act as a guide throughout the entirety of the blockchain initiative, and will ensure the state’s vision for blockchain is achievable.
These key pieces of advice can provide a foundation for state’s looking to leverage blockchain to improve services; although each state should tailor blockchain technology to its specific needs. The Illinois Blockchain Initiative’s experience clearly demonstrates there is a way to navigate blockchain successfully in the public sector, and shows that the technology truly can assist in the transformation of government services moving forward.