blockchain and government

When is blockchain the right tool for the job?

Blockchain looks like an easy way to increase transparency, cut out the middleman and ensure data integrity.  But many have argued that the emerging technology is being applied to problems that could more easily be solved with a traditional database. 

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To ensure the benefits of blockchain go beyond finance applications and can be leveraged by the public sector, New America’s Blockchain Trust Accelerator has released a Blueprint for Blockchain and Social Innovation. The report includes a chapter to help stakeholders determine if blockchain is the right tool for their problem set -- or if they'd be better served by some other technology.

Project managers should ask:

  • Who’s accessing this data? Users on a blockchain should be unrelated parties working with a specific set of data. If all users are within a single organization, there are likely better solutions.
  • Is this an uncoordinated system? Blockchain best supports networks involving complex relationships among parties that do not trust one another -- competitors or parties with different goals.
  • What’s the existing intermediary? Situations when a trusted intermediary -- bank or government agency -- cannot be found are well suited to blockchain.
  • How sensitive is this data? Because blockchain's transparency can raise privacy issues with personally identifiable information, project managers should conduct a differential privacy test to be sure anonymized data can not be traced back to an individual.
  • Does this project involve off-chain data? Implementations that require validation from off-chain applications (QR codes, serial numbers or RFID tags) may require additional resources to ensure asset integrity.

The blueprint also covers general project management issues stakeholders should consider before starting a blockchain project:

Cost justification. Weigh potential savings against the cost of deploying an evolving technology and compare that to upgrading existing systems.

Team members.  Besides technology partners, users and stakeholders, consult regulatory experts and third-party auditors.

Metrics. Identify short-term goals to better understand how meaningful long-term outcomes will be delivered.

App design.  Developers should take a human-centered, multidisciplinary approach to ensure users will want to take advantage of the blockchain application.  

Risk management.  Be sure to identify risk areas, including data quality, platform lock-in and regulatory changes.

The report also includes definitions of 100 terms that are key for understanding blockchain  -- from accountability to zero knowledge proof.

Read the full report here.

About the Author

Susan Miller is executive editor at GCN.

Over a career spent in tech media, Miller has worked in editorial, print production and online, starting on the copy desk at IDG’s ComputerWorld, moving to print production for Federal Computer Week and later helping launch websites and email newsletter delivery for FCW. After a turn at Virginia’s Center for Innovative Technology, where she worked to promote technology-based economic development, she rejoined what was to become 1105 Media in 2004, eventually managing content and production for all the company's government-focused websites. Miller shifted back to editorial in 2012, when she began working with GCN.

Miller has a BA and MA from West Chester University and did Ph.D. work in English at the University of Delaware.

Connect with Susan at smiller@gcn.com or @sjaymiller.

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