Blockchain technology is in no way new. You’ve probably seen it in the news. But what you may not understand is the impact it will have on your government organization and why you need to care.
The Definition of Blockchain and Cryptocurrency
Essential to an understanding of blockchain’s impact is the knowledge of what it is. Blockchain is a distributed, decentralized, public ledger. It allows for multiple parties to share access to a single ledger. This means that all parties are operating off a single source of the truth.
The most common type of blockchain is cryptocurrency, a digital medium of online exchange. “Crypto” refers to the cryptographic techniques used to decentralize payment systems and prevent fraud and counterfeiting. One of the most common types of cryptocurrency is Bitcoin. But there are a great deal of other use cases for cryptocurrency and blockchain technology.
Learn more about blockchain’s potential applications and growth potential.
Why Cryptocurrency in Governments
Blockchain has been around for more than 10 years. However, organizations are just beginning to recognize the use case for this technology. States such as Illinois, Delaware and Arizona have current projects relating to public records, business registries or smart regulations.
While most governments are not seeing significant impact from blockchain applications, there are governments legislating the use of cryptocurrency on blockchains. States such as Wyoming, Colorado and Montana have passed legislation regarding the treatment of cryptocurrency within each state.
Other states are likely to pass their own legislation in the future as cryptocurrency becomes more prevalent. Current impacts to state and local governments could be in the terms of what is allowed for cryptocurrency.
These questions cannot be answered today. But they are important to consider as you look at the impact of cryptocurrency and blockchain on state and local governments.
The Future of Blockchain for Government Organizations
Areas such as property and real estate titles, procurement, budgeting and financial management, payroll tax collections and smart contracts have the potential to be impacted by blockchain technology. Blockchain can provide better, more reliable information, in a streamlined manner.
The idea of tamperproof and transparent transactions as digital records could be considered for public records relating to property titles. This transparency of public information would provide time-stamped documentation of any future changes while available to parties in an accessible environment. Other blockchain applications could provide more timely processing of transactions along with authorization of who is required to be involved in the transactions.
With most of these ideas and concepts in the beginning stages, the main area for governments to consider is education. Understanding blockchain and its impact on their organizations will be vital. With all ideas, there will be challenges to overcome and legislation would be required for a number of the changes to happen.
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