The number of use cases for blockchain technology is virtually unlimited, and it is very encouraging to see a growing number of US state governments trying to deploy distributed ledger technology projects into their IT environment. Blockchain is indeed under evaluation or being implemented by several state governments to improve transparency, efficiency, and trust in information sharing for better delivery of public services.
One of these states is Colorado, where a cautionary approach to the implementation of blockchain technology in the public sector led to the adoption of a bipartisan bill promoting the use of blockchain for government record keeping.
The state of Delaware is also implementing blockchain to improve various aspects of public service. In 2016, the state launched the Delaware Blockchain Initiative to accelerate the adoption of blockchain technology and smart contracts in both public and private sector within the state. One of the first blockchain projects hopes to put all the state’s public information to a blockchain for easy public access and to secure the records. It recently awarded a $738,000 contract to IBM to design a blockchain-based corporate filing system that will allow companies and investors to automatically track stocks and collateral assets in real-time.
Delaware is a haven for many Fortune 500 companies and numerous startups due to its business-friendly laws. The blockchain pilot solution, which will be built on the Hyperledger Fabric, aims to provide companies with a more secure, accurate, and efficient platform to file business registration and retrieve related information.
Similar to Delaware, the state of Illinois launched the Illinois Blockchain Initiative in 2017 with the goal to utilize the distributed ledger technology to improve the delivery of public and private services through data sharing, transparency, and trust. Real-world use cases include waste management, social welfare distribution, disaster recovery grant distribution, and improved tax credit visibility. County Cook, Illinois, recently concluded a pilot project known as County Cook Recorder of Deeds to store real estate transactions and records securely on the blockchain.
While these states pursue a broader role for blockchain in their economies, others are focusing on implementing blockchain for specific applications in government functions. For example, West Virginia just completed a pilot project to use blockchain application for mobile voting in its recent primary elections. The state hired a blockchain developer Voatz to create a system that lets overseas military securely vote using a mobile device and record all the voting related data on a blockchain.
Across the US, the momentum around blockchain is rapidly picking up as there is a desire to attract blockchain businesses, investors, and high-tech jobs locally. Vermont, for example, passed a law that recognizes data stored on blockchain as admissible in the court system. In Arizona, signatures, transactions, and contracts made on the blockchain are recognized as legally valid which means residents are allowed to pay their income tax in cryptocurrencies. Other states that have passed blockchain-related laws include Tennessee, Nevada, Ohio, and Wyoming.
It’s still the early days for US state governments and blockchain. The technology still needs to address challenges related to scaling, implementation costs, and security in order to be competitive with centralized databases. Indeed some early projects have run into problems as expectations meet reality. For instance, the state of Vermont was considering a blockchain-based public recordkeeping system but a study found that the costs of such implementation would not match possible benefits.
But many experts believe that state governments have nothing to lose. Using blockchain seems to be a logical move for them since the technology has the potential to transform key functions such as regulatory compliance and record-keeping, as well as to enhance the delivery of public services.