Last week, Congress took a significant step forward in the technology space in the form of a resolution about the promise of blockchain. The resolution, authored by Rep. David Schweikert, R-Ariz., on behalf of the Congressional Blockchain Caucus, noted that “blockchain has incredible potential that must be nurtured through support for research and development and a thoughtful and innovation-friendly regulatory approach.”
Last week also marked the launch of a new report about blockchain released in consultation with the Blockchain Caucus and MIT Connection Science through the IBM Center for The Business of Government: The Impact of Blockchain for Government: Insights on Identity, Payments, and Supply Chain, by Thomas Hardjono, who leads the MIT Trust: Data Consortium within MIT Connection Science.
Understanding blockchain’s potential relies on recognition that business transactions such as orders, payments and account tracking take place every second. Often, participants to a transaction have their own ledgers—and, thus, their own individual versions of the facts. Having multiple ledgers can lead to error, fraud and inefficiencies—vulnerabilities that can be reduced by having a common view of a transaction end-to-end.
Blockchain technology enables a shared ledger to record the history of transactions with consistency and certainty. In a blockchain network, all parties to a transaction must give consensus before a new transaction is added—and once recorded in the blockchain network, a transaction cannot be altered. Blockchain eliminates or reduces paper processes—speeding up transaction times, increasing efficiencies, and building trust among participants to a transaction.
As Hardjono writes:
“Strong industry consensus exists around the belief that blockchain technology will be the leading edge of “next Internet” economy. It is imperative that government and industry work together to continue and strengthen technological and market leadership in this new area, and to address potential policy and regulatory incompatibility that may constrain growth of the emerging digital-blockchain economy.”
The report is intended to help government achieve goals set out in the congressional resolution, focusing on ways that blockchain can benefit agencies and drive economic vitality. The author addresses these and related challenges by drawing insight from three roundtable discussions in 2017-2018 among key leaders and stakeholders, hosted by the Congressional Blockchain Caucus, under the leadership of Rep. Schweikert and Jared Polis, D-Colo. The roundtables helped frame key issues, addressing how leadership and vision from government, collaboration with industry, and support for research into future applications can help drive progress in enabling blockchain technology to support digital identity, payments, and supply chain innovations.
We hope that this report provides timely insight on the potential for blockchain to help government, as agencies expand their implementation of this important technology in the years to come.