How Blockchain Can Transform the Government and Public Sector?

Blockchain, the technology underpinning Bitcoin, has been sparking innovation across the globe in all verticals. In fact, it is one of the most over-hyped technologies that have become a mainstream topic in the recent years. What contributes to the hype surrounding this fledgling technology? It is not only about the security and transparency it offers, but also how it redefines the expectations of trust. This distributed and decentralized ledger technology provides a robust approach to data security and reduced transaction costs. And that is why enterprises across the domains are piloting and testing blockchain applications for payments, identity management, data sharing, and more. Similarly, governments and public sector organizations can leverage this ingenious technology to increase trust, security, and efficiency of their existing systems.

The existing centralized systems of government and public sector are insecure, costly and inefficient. Moreover, the structure follows age-old administration practices and is laced with corruption and bureaucracy. Introducing a blockchain-based system for the public sector organizations and government sectors can help in eliminating third parties, merging the fragmented branches of government and granting an improved level of transparency for its citizens. There are many prominent ways in which blockchain can transform the operations of the public sector. In this blog post, let us discuss the potential use cases and applications of blockchain for the government.


Elections serve as the backbone of a democracy. However, the security of the voting system has been questioned and criticized over the years. In fact, the presence of centralized servers which is susceptible to breaches and hacks has started to undermine the legitimacy of elections. With blockchain technology application , the entire voting process could be encrypted and made transparent. The convenience of digital voting is combined with the immutability of blockchain in order to eliminate issues such as double voting, vote altering and vote deleting.

Building Citizen's Trust

Public trust in government has been declining rapidly and this leads to lower rates of compliance with rules and regulations. Lack of trust in government and public sector can delay investments and innovation. Trust is a crucial input for implementing reforms as it directly influences the attitude and actions of people and organizations. In short, building and maintaining citizen’s trust in government is critical for effective policy making for a country. The potential of blockchain could be leveraged to reverse this distrust by introducing decentralization and efficiency. Blockchain-based solutions introduced in the public sector would help in combating corruption. Bringing a whole new level of transparency, blockchain will allow citizens to view and verify government spending records and check how budgets are formed and tax dollars are spent. Since every transaction is recorded in the distributed ledger, it would enable the participants to view, share and access the records. And this would increase the citizens' trust in government and the public sector.

Securing Data

Any organization that handles the sensitive data of people are always vulnerable to cyberattacks. In 2015, the databases maintained by the US Office of Personnel Management were breached as it exposed the personal information of approximately four million people. The information stolen included sensitive data such as social security numbers, birth dates and addresses of current and former federal workers.

Government systems and public sector organizations that handle a huge volume of sensitive personal data are always a target for hackers. This could be avoided or mitigated by deploying blockchain-based data structures.This distributed ledger technology has three key traits that bolsters cybersecurity – decentralization, cryptographic security and tamper-proof ledgers. Rigorous encryption and data distribution protocols across a peer-to-peer network ensures that the data remain safely intact and out of reach of hackers.

Streamlining Administrative Processes

Government operations and public sector departments are often criticized for their inefficient functioning, outdated practices, higher costs and slow pace. Moreover, a major share of government procedures still rely on paper-based records systems. Storing and managing paper based systems is an exorbitant affair. Digitizing the records and introducing blockchain enabled systems can simplify the administrative processes by eliminating the third parties, increasing efficiency and cutting down costs.

Building a blockchain-based system for public sector organizations can help with identity management of citizens, asset management, smart regulations, budgeting and financial management and more. Transactions recorded on the blockchain network are immutable and transparent ,which makes it easy for all the parties involved to gain a greater clarity within the government operations. Records linked on a blockchain network can be tracked across the value chain. Having a robust and transparent impact tracking and measurement systems would help in reducing unnecessary costs, eliminating corruption and boosting levels of trust. The other potential application of blockchain is that it can be a platform for ‘smart contracts’ - which has the ability to be self-executing and self-maintaining, thereby eliminating the need of intermediaries.

A blockchain-based system has enormous potential to solve the legacy pain points and inefficiencies. That is why many government agencies and public sector organizations across the world have launched or are preparing to launch blockchain projects to meet the demand for secure, transparent and efficient transactions.

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