Corporate Finance, DeFi, Blockchain, Web3 News
Corporate Finance, DeFi, Blockchain News

Governments Love Blockchain

by Ilias Louis Hatzis.

In September, Nikos Kostopoulos, Secretary for Scientific Organizations at New Democracy, the main opposition party, invited me to speak during the Thessaloniki International Fair about how governments around the world are using blockchain to improve the lives of their citizens.

As the new year starts, I thought it would be good to touch up on this topic again. Blockchain’s incredible potential becomes increasingly evident to governments worldwide.

We live in a world where centralization powers society. This includes banks, schools, health and so on. Blockchain has hit the world with force, bringing changes in almost everything out there. However, Bitcoin has been the catalyst for the growth of blockchain. Bitcoin's price has skyrocketed from just $1000 in early 2017 to $19,000 in December of the same year. While prices in 2018 have dropped more than 80%, with Bitcoin hovering today around $3,800, over the last year the number of crypto users has almost doubled reaching 35 million people and on the commercial side we have things in the pipeline like Bakkt, the SEC decision on a crypto ETF, Facebook getting in the crypto game and so many other developments.

PricewaterhouseCoopers (PwC) reported that many of its customers are spending "big money" on blockchain, and that spending will keep growing, as it is expected to reach $1.7 billion this year.

Many governments around the world have a love and hate relationship with cryptocurrency and blockchain. On one hand they show their love for blockchain and how they can use it, and on the other they take actions to prohibit or even ban the use of cryptocurrencies.

The best way to describe blockchain: A shared, decentralized, secure, immutable digital ledger. Blockchain lets a group of people, that are complete strangers, agree on the state of transactions and build trust.
A map published on March 2018 by the Observatory of Public Sector Innovation (OPSI), shows there are currently at least 202 government blockchain initiatives in 45 countries around the world.

The blockchain supporters, love it because it cannot be tampered with or changed because of its decentralized nature. The practical applications are limitless.

Earlier this December, Swisscom and Swiss Post, the Swiss national telecom and postal service, announced the launch of a 100% Swiss infrastructure on blockchain technology. The aim of the initiative is to provide end-to-end blockchain related services to Swiss citizens and companies.

The Dubai Blockchain Strategy initiative, a collaboration between the Smart Dubai Office and the Dubai Future Foundation, is almost ready to implement 20 different blockchain based services. The aim is to create a paperless government, where 100 million documents currently processed each year, including visa applications, land deeds, receipts, license renewals, and voting ballots, all become electronic. Smart Dubai estimates, that almost $1.5 billion, will be saved just from document processing alone.

Blockchain has the power to disrupt and strongly reorganize accounting and the way tax collections are processed. With smart contracts, escrow conditions can be built to divert payments automatically and in real-time, without back office costs. In June 2018, Georgia, announced the government was going to explore how to use blockchain to administer all taxes. The new the tax system could reduce double payments, map payments and refunds to individual and businesses, ensure accurate tracking mechanisms, and ease the administrative burden. Last month in the United States, Ohio became the first state to accept Bitcoin for tax payments.

Over the years, the legitimacy of the voting process has been under scrutiny with reports about tampering and manipulation of election results. Countries like the United States, Germany, Russia, and China have had incidents. For this year's upcoming elections in Greece, think of voters casting theirs votes directly from their smartphone and because of blockchain the process and results becoming transparent and immediately verifiable.

Estonia the small Baltic nation of 1.3 million people, is the first country in the world to adopt blockchain technology in 2008, with their e-residency program. Estonia utilized the distributed ledger technology to create their own identity system, improving citizen satisfaction and substantially reducing bureaucracy. In the last three years, with its e-residency program, Estonia has offered foreign entrepreneurs the freedom to easily start and run a global business in the country, opened its doors to 23,000 people from 138 countries that signed up to the program.

Ghana is building a blockchain-based land administration platform. With its current inadequate centralized system, based on paper records, its impossible for property to be used as a collateral on transactions made by banks. Using blockchain will allow Ghana to modernize its technology and organization, creating immutable land records that are easily verifiable.

Blockchain’s potential to build trust and transparency, support data protection and privacy has been well established. In countries where corruption and inefficiencies rule, blockchain has the potential to restore faith in government. Blockchain technology can make management and regulation immutable and instantaneous. We can move from a paper-based, delayed-reporting reality, to one that is dynamic and real-time.

Ilias Louis Hatzis
Ilias Louis Hatzis
Ilias Louis Hatzis is the Founder & CEO at Mercato Blockchain Corporation AG.
He writes the Blockchain Weekly Front Page each Monday.

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Mardi 8 Janvier 2019