We all know that “time is money.” That adage still rings true, but in a world of digital transformation, a different currency may be eclipsing time in importance. Today, it can just as easily be said that “data is money.”
Within the government, agencies collect, access and/or store data on nearly every aspect of life, from birth to death. Much of that data is duplicative—collected by multiple agencies within siloed databases. Some data may be shared across programs or agencies via application programming interfaces (APIs). The government also acquires a significant volume of data from third-party aggregators, including data originally sourced from other municipal, county, state and federal agencies, such as driver’s license, property ownership, criminal conviction and tax data.
However, the emergence of blockchain promises a cultural change from discrete data ownership to a distributed consensus model. With blockchain, we now have the technology necessary to bring about a new era of cross-organizational data sharing without the need for intermediaries—a democratization of data.
Blockchain, or distributed ledger technology (DLT), offers significant benefits to government agencies. As the name implies, DLT enables wide distribution of data in a very controlled manner. On the blockchain, each transaction (or exchange of data) is recorded in each digital ledger (or node) that is part of the blockchain. Keys and signatures control what each participant can do within the shared ledger. The nature of blockchain holds significant promise for sharing of more accurate data with a speed and confidence not available today.
Take, for example, the transport of hazardous waste across the U.S. Within the federal government, agencies including the Environmental Protection Agency, Department of Transportation and Nuclear Regulatory Commission collect data associated with the transport of various hazardous materials. States and municipalities have a critical interest in understanding the hazardous materials traveling through their jurisdictions. Imagine a future where near real-time information related to hazardous waste transit—from materials in question to exact location—is available on the blockchain to those agencies with a need to know as those materials move across the country from point of origin to point of disposition.
Blockchain also has the potential to change the way we assess, verify and distribute government benefits. Today in the U.S., multiple government programs collect data from individuals to determine their eligibility for benefit programs. Individuals seeking aid must apply to each program separately, and their information from one application to another may vary, as forms ask different questions in different ways.
Using blockchain, information related to eligibility could be shared across a wider variety of programs using a simplified architecture connecting via API to one blockchain containing a broader wealth of information, rather than having each program building and maintaining APIs to the same data assets. Likewise, blockchain could provide a new level of transparency into how benefits are spent.
As blockchain technologies mature and initiatives move from proof of concept to production, I envision a significant shift in government’s reliance on acquiring other government entity data from third parties. Because blockchain can readily support complex data access protocols, it can maintain security of digital identity data like a driver’s license and increase accuracy when a person moves to another state. Challenges associated with data redundancy, timeliness and cost could be eliminated, removing the need for law enforcement organizations or eligibility programs to pay for access to such data through third-party aggregators.
Blockchain holds promise for government agencies in support of both mission and operational arenas:
- Improving data sharing between entities, with greater data integrity control
- Increasing transparency of transactions between agencies and citizens
- Reducing cost of operations, including reducing fraud and error in payments
- Increasing confidence in data accuracy and authenticity
- Reducing the need and expenses associated with acquiring data from third-party vendors
Will blockchain help democratize data? What will drive government agencies to adopt blockchain to more readily share accurate and timely data? Share your thoughts and check out our blockchain fact sheet.
Read previous entries in our government blockchain series
Blockchain: Should federal agencies use it? by Sean Curry
The time for blockchain proofs of concept is now, by Sarah Ropper