Blockchain: Towards a world of governments in the cloud

Internet and the technological development of cities has allowed public administrations and governments to digitize their functions in order to improve the efficiency of processes and, in short, guarantee better services for citizens.

But digitization of the public sector also poses some fundamental questions. In a globalized and highly connected world, should the national identity of a citizen be limited? Should the services of a state be limited to its geographic borders? Or should those frontiers be expanded, just as the services of companies have been expanded?

Some pioneering initiatives have sought to answer these questions, with proposals that require us to re-imagine the traditional role of the state, and which offer a broad spectrum of services founded on the concept of digital citizenship.

Estonia

Estonia was the first country to pose the question of what a digital government in the cloud would be like, when it launched e-residency, a model of digital transnational identity that allows you, regardless of the European country where you reside, to access a wide spectrum of legal, registry, voter, and signature services, all managed by the Estonian platform itself.

Although this initiative began at the end of 2014, it was not until mid-2016 that citizens began to make use of the advantages stemming from the transparency, immutability and efficiency that blockchain provides.

On the basis of this digital identity, the Estonian government has permitted citizens to establish remote models of digital certification and registration of  property, through the use of blockchain and KSI technology with digital signatures, doing away wit the public and private passwords that are characteristic of public sector cryptography. Likewise, they have developed a service to manage electronic medical registries, which are able to unify, in a single health registry, the information which is spread throughout different health care providers; they have also facilitated online voting in shareholders’ meetings that do not require a physical presence, using Chain and Nasdaq technology.

These latter two services have been developed jointly with Linq, a platform for simplified issuance of shares by companies that lack the size or maturity required for an Initial Public Offering (IPO). Linq hugely simplifies the bureaucracy associated with these processes, by dividing share capital into tokens that can be traded freely on Over the Counter markets.

Other countries such as Sweden, Honduras and Georgia are using blockchain for public registries, starting with land ownership.

Smart Dubai

The government of Dubai, using a more extensive approach, has launched an initiative called Smart Dubai,  which seeks to transfer all the existing information to blockchain before the year 2020, in order to facilitate the access to and management of it. The objective is to propose a more efficient model of government which replaces the processes based on paper or communication by fax or telephone, with digital documents and intelligent contracts that facilitate traceability and the management of delivery of goods and merchandise.

The Lyra Network

In the Spanish context, with the launch of the multisectoral network Lyra (comprised of Banco Sabadell, Banco Santander, Bankia, BBVA, BME, Caja Rural, Cajamar, Cepsa, Correos, Ejaso, Endesa, everis, Garrigues, Gas Natural Fenosa, Grant Thornton, Iberdrola, Comillas ICADE, MásMóvil, Momopocket, Notarnet, Roca Junyent and Scytl),  a principal focus has been established: the development of a digital identity standard based on blockchain and smart contracts in which notaries are the ones who certify and validate that a digital identity corresponds to  real identity.

Beyond the efficiency of the processes, the significant improvement in transparency and the reduction of bureaucracy enabled by blockchain and autonomous software such as smart contracts, a standardized model of legal identity will allow the electronic signature of agreements, the issuance of electronic invoices with automated tax payments, or even transparent and direct voting models and citizen participation in local communities.

In short, blockchain will allow citizens to have full control over their information and their will to act, with models of representative and personalized government in which citizens can choose those services, in a global context, which best adapt to their needs and improve their quality of life.

This new context also poses a series of questions. In a world where the services offered by states escape both the normal competencies and territorial borders, in which intelligence applied to data is the principal source of value for decision making and the development of products, and in which autonomous software arbitrates the exchange of information, goods or services, thus eliminating bureaucracy, risk and uncertainty, one must surely ask: Will these states compete with the principal digital companies (Google, Apple, Facebook, Amazon, AliBaBa) in offering value added services for citizens? Or will these companies be the ones to broaden their services to include ones that traditionally were provided by governments?

The question remains open until the new models of government that are made possible by the Internet of value begin to become a reality.