Blockchain: great hope or great hype?

Posted on August 20, 2018

Nexus recently attended a seminar on blockchain technology, which is a type of digital distribution ledger or database that contains a record of every transaction at every stage of the supply chain. It is decentralised, with no single owner of the data (such as a bank or government agency). The technology is starting to be adopted by governments internationally, for purposes including:

  • corporate registrations
  • livestock movements from farm gate to retailer
  • property conveyancing
  • document verification in immigration
  • vehicle maintenance.

The key benefits to blockchain include increased security and trust, reduced risk of fraud, reduced transaction costs and faster execution. For example, instead of moving property deeds from the bank to the broker and then to other parties, everyone has access to the deed and can make updates online in real time.

“Blockchain will revolutionise public service delivery the way the Internet revolutionised communication.” Alan Thurlow, IBM Global Business Services

The idea is that by providing everyone with access to the data, it is inherently more secure. However, this can create trust issues with the general public. The recent debacles with the government’s robodebt program and My Health Record shows people are hesitant to give up control of sensitive data and share it with the world.

This erosion of trust will make it far more difficult to establish blockchain technology in the future. It was one of the challenges discussed in the seminar, which included:

  • governance: how do you get everyone to agree to use a blockchain?
  • trust: even though the technology has increased security, how do you get governments and the broader community to trust a complex, decentralised technology?
  • confidentiality: given that a premise of blockchain technology is that all parties are checking and validating data integrity, how is sensitive data protected?
  • capability: do government employees have the technical skills to use sophisticated technologies like blockchain, or the ability to develop education and skills in this area?

Only using blockchain when transparency is required, encrypting data or keeping data off the ‘chain’ may provide solutions to some of these issues. However, it’s important to remember that like any technology, blockchain is a means to an end and needs to solve a business problem.

Technology companies are touting blockchain as the next big thing, but whether it will revolutionise public service delivery or not is yet to be seen. Regardless, the first step is to identify the business problem. If you need help reducing unnecessary processes, inefficiencies, costs or multiple handling, feel free to get in touch.