By Greg Forst, Director of Marketing at Factom Protocol – an open source, enterprise grade, developer friendly, ready-to-use platform to efficiently build blockchain solutions, utilized by the U.S. Department of Homeland Security, the Bill and Melinda Gates Foundation, and other leading enterprises.
Over the past number of years, the perceived potential of blockchain technology has been slowly decoupled from the volatility of the crypto market, with household name companies endorsing the technology and exploring Distributed Ledger Technology (DLT) applications. While the involvement of mainstream enterprises is a significant seal of approval for this nascent technology, the involvement of government departments will be pivotal in facilitating widespread adoption, and yielding positive outcomes for businesses and citizens alike.
1. Address longstanding inefficiencies and protracted processes
Blockchain technology continues to be heralded as the gateway to new levels of cross-sectoral innovation promising increased speed, security, and decentralization. However, DLT’s promise of innovation lies squarely in the technology’s suitability in addressing longstanding inefficiencies that have plagued processes in a myriad of industries from banking and finance to education, real estate, and healthcare, amongst others. The technology offers proven use cases that relate to payments, exchanges, smart contracts, digital identity, supply chain management, governance, and compliance management.
In addition to this, governments’ willingness to accept DLT as a means of proving compliance with regulation across industries will undoubtedly reduce costs and remove inefficiencies plaguing traditional methods of audit and compliance checks. Blockchain technology offers an immutable ledger upon with to store and transfer records, proving compliance quickly and effectively.
2. Imbue sense of trust in government processes
Since the global financial crisis of 2008, world leaders have been pursuing innovative ways to add much needed layers of transparency across different areas of government. Dynamic technologies like blockchain can be harnessed to replace certain centralized roles of government, improving speed, security, and transparency in relation to transaction recording. Once a lofty ambition, the notion of using blockchain to cast your vote is now within the realms of possibility for constituents as a means of making mobile voting more secure and reliable. This is just one example of how DLT can pave the way towards greater transparency in governance.
3. Explore new educational avenues and broaden employment opportunities
European countries have been driving forward regulation and innovation within the blockchain space with countries such as France, Switzerland, and Gibraltar leading the charge. Government-led support like this can send positive signals around the technology’s long term viability, and encourage educational institutions to dedicate resources to crafting bespoke blockchain courses. This can help ensure that prospective blockchain projects have a conveyor belt of talented blockchain-literate professionals to build their companies in the years ahead. Similarly in the US, a number of top-tier universities have developed tailored blockchain courses, including New York University, and the University of California, Los Angeles (UCLA). This comes at a time when student sentiment towards blockchain and cryptocurrency education is on the upswing in 2019, with twice as many students having taken a crypto or blockchain course compared to 2018.
This swell in interest around blockchain courses comes amidst a surge in blockchain-related jobs, as highlighted by LinkedIn’s 2018 US Emerging Jobs report which identified the role of blockchain developer as the most rapidly growing job in the US – growing 33 times over the previous year. This trend has continued, with the ConsenSys Blockchain Jobs Report 2019 illustrating the ongoing growth of the DLT jobs market globally. Governments that recognise the potential of blockchain technology can lay the foundation for a spike in employment opportunities for citizens in an exciting new sector.
4. Establish secure connections between IoT devices
Governments have a vested interest in setting security and regulatory standards when it comes to the abundance of Internet of Things (IoT) devices coming to the market. Consider the example of a food supply chain. As a matter of public health, governments should be able to verify the source of food products, particularly in cases of contamination. IoT connected devices, while providing means to track sources, harbor security risks. Blockchain-based digital identities allow for certainty in device identities, preventing tampering or false data. IoT is an emerging technology that is rapidly gaining precedent across society and business sectors. Governments can ensure new systems are managed correctly by harnessing DLT.
5. Set the guard rails and pave the way for inward investment
The incentives for prioritising the pursuit of blockchain initiatives are becoming more pronounced. Taking an active role and encouraging the growth of the DLT sector offers governments the opportunity to set the guard rails and allow blockchain technology to play a crucial part in business and society. Beyond this, governments will create new avenues and catalysts for inward investment. By establishing purpose-built regulatory frameworks to oversee DLT activity, jurisdictions can trigger the creation of a new economic sector with boundless potential, and in the process, attract interest from DLT projects. When it comes to enticing ambitious blockchain projects to a jurisdiction, the needs of industry should be the central consideration. For project leaders assessing the merits of different jurisdictions as prospective locations to set up, supportive regulatory environments can be a major differentiator, as we have seen in countries such as Gibraltar, Malta, and Switzerland which have quickly ascended as popular DLT destinations.