The benefits of Blockchain are manifold
3 min read
If the state embraced Blockchain’s benefits it would be rewarded with increased social freedom, efficiency and trust, writes Eddie Hughes
Having thought a lot about it recently, the deep secret of blockchain seems to me that even those people who talk the most about it don’t always seem to be completely sure what it actually is. We’ve seen the adverts on TV. We’ve heard how it offers opportunities to the private and public sectors, alike. Maybe you’ve even invested in bitcoin. But what exactly is it?
I know some of you reading this will be more experienced in this area than me. But, in case even you would like a refresher, my new FREER paper on the topic — Unlocking Blockchain: Embracing new technologies to drive efficiency and empower the citizen — includes an easy one-page explanation of the ‘whats’ and ‘hows’.
Simply, blockchains are a subset of distributed ledger technologies — or DLTs — which are also known, in the business world, as shared ledger technologies — or SLTs. Traditional ledgers — the kind you might see in any business — take the form of a ‘master version’. That version is held by one person, and everyone else involved can either access it or ask for a copy when they need it. DLTs, however, take the form of multiple versions of the same thing, which are all updated whenever any user updates their version. Effectively, anything that’s a ledger can be adapted into this new form, thanks to technological progress in processing power, encryption, networking, and coding.
As I point out in my paper, the benefits of all of this are manifold. Particularly, blockchain offers security, in terms of transparency, immutability, and decentralisation. And it offers efficiency, especially regarding the elimination of the need for third parties.
Technologies like blockchain, therefore, not only offer obvious advantages to business and a tremendous chance to cut the bureaucratic costs of economic activity. They also represent an unparalleled chance to rewire our necessary interactions with the state.
At the heart of my paper is the argument that the state should focus its attention on using blockchain to enable social freedom, to increase efficiency, and to rebuild societal trust. The state should not be allowed to use such technology to intrude into the lives of individuals, but rather the technology should be used to empower individuals in their necessary engagements with the state.
I suggest in my paper that what we need now, therefore, is a transparently coordinated response to how DLT can aid public-service provision. I propose that the opportunities of this technology should be fit explicitly into a ministerial brief, and that a public-facing ‘Chief Blockchain Officer’ should be appointed from within the government’s existing taskforce to coordinate the UK’s strategy regarding the application of DLT to public services and data—and that this role should be expanded to include other key new technologies, such as AI, as and when they converge.
I also contend that we could send an important and inspirational message about a renewed UK focus on efficiency and the opportunities of new technology if we were to introduce a long-term governmental departmental target for efficiency savings driven by embracing blockchain and associated technologies.
I look forward to discussing my paper and its proposals further, and I look forward to thinking more about this topic. If we can use the energy of entrepreneurial spirit created by new world-changing technologies like blockchain, I firmly believe we can ensure the future will be freer.
Eddie Hughes is Conservative MP for Walsall North and author of Unlocking Blockchain
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