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How Blockchain can Transform Government Data Collection

Bank of Canada Test Shows Blockchain Can Settle Equities

Data is the lifeblood of any effective government, and blockchain has the potential to revolutionize the area. Governments require information in order to protect and provide for their citizens through laws, policies, programs, and public services.

Unfortunately, data collected from the public often comes incomplete or in fragments.

Fragmented data has been a significant challenge for governments, especially in the technological age. Despite leveraging private intranets and the cloud for data storage, governments are failing to collect high-quality data that forms the foundation for their decision making.

Governments around the world are currently testing private blockchain networks where they can collect sensitive information from individuals and allow them to gain direct control over their personal information.

With the blockchain network, the government can access higher quality data and make better-informed decisions. Individuals, on the other hand, can rest assured that hackers cannot access their information.

Current data management practices in the public sector

Incomplete data makes effective decision making extremely difficult, especially in government. The lack of digitization aggravates the problem. With many records existing only in paper form, people need to appear in person to update their information.

Governments also regularly work with individual private agencies, all of which have their own collection of data and information management protocols. These nontransparent, fragmented systems create misinformation and scattered data that is difficult to weave together. Governments are also not allowed to access sensitive information from individual private agencies.

Government services, therefore, require duplication. Evaluation of successful programs becomes difficult, tax dollars go uncollected, infrastructure maintenance is inefficient, and even health care dollars often go to waste.

Even when the government implements data analytics to help make better decisions, the analytics are only as good as the data itself.

Improving the data management process

Many governments recognize the importance of having an efficient method of collecting data. With big data analytics, governments can modernize existing government services and aid their economies.

While problems concerning data collection range from error-filled data input, to untrained workers, and problems with data collected by private sector contracts, the largest issue is the original, centralized databases. In certain government sectors, systems are so inefficient that workers stopped inputting information altogether simply because it was too time-consuming for them to do their jobs.

Not only are governments furthering inefficiencies, they miss out on huge growth opportunities. Global consulting and research firm McKinsey & Company estimates that digitizing information and applying analytics to improve decision making catalyzes more than $1 trillion in global economic value for governments around the world.

The blockchain is an example of a transparent, decentralized, digital network that could help governments effectively collect and store data.

In 2017, IBM surveyed 200 government leaders in 16 countries on their experiences, with 9 in 10 government executives planning to invest in blockchain by 2018 to streamline their government services.

Initially, blockchain technology could simplify the management of trusted information by allowing individuals to upload and update their personal information. While governments have used this approach via the internet, online systems are not updated regularly and easily hacked.

The United States government database saw two hacks in 2015, for instance, exposing sensitive information for at least 22.1 million people.

More trust in government through blockchain technology

A more secure infrastructure like the blockchain network can decrease inefficiencies from the older system and gain greater trust and adoption by the wider public.

Over time, with a blockchain network, the government can create rules and algorithms that automatically share data with third parties once the parties fulfill the smart contract’s terms. These smart contracts remove the need for additional human resources as well, which can be costly and time consumptive.

Taking a long-term view

In the long term, blockchain can even allow individuals and organizations to gain direct control over their personal information that they provide to the government. This way, no one can access their sensitive information without their permission.

With a growing global population, it’s crucial for governments to collect high-quality data for important decisions that affect their people. Before the public can interact with a government blockchain network, however, the government would most likely implement smaller scale networks behind the scenes to pilot and test the technology.

Unfortunately, blockchains are not yet highly scalable and therefore governments must wait for large-scale implementations. Nevertheless, with further research and development, there exists the huge potential for collecting and storing big public data on the blockchain network.


Image credit: Wikimedia Commons


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