Increasingly, more and more authorities, as well as governmental departments, are looking into the use of blockchain technology. Blockchain technology is being looked into for its transparency as well as technologically secure infrastructure. The latest addition to the list is US Department of energy and National renewable energy laboratory. The organizations announced on January 23, 2018, that they would be partnering up with the blockchain company by the name of Blockcypher to build a peer-to-peer blockchain based system for energy trading networks.
The system would be put to the initial test in order to find out how it handles the distributed energy resources related transactions. According to the senior engineer and principal investigator for National renewable energy laboratory, Dylan Cutler, the system would provide a more affordable as well as efficient electric grid which would connect all the stakeholders like government, agencies as well as utility providers.
The head of growth at BlockCypher, Karen Hsu, highlighted the fact that such a system would be specifically useful in times of crisis and to ensure that the growing demand for power can be accommodated.
The main aim of the organization is to utilize the benefits of blockchain technology in order to make the electric grid highly efficient and to cover the losses in the electric grid.
According to Butler, currently energy assets are underutilized and the utilization can be increased with the help of such a platform.
He further added that such an arrangement which would settle the contracts in real-time and utilize the underutilized capacity which would be beneficial for the power grids.
The private sector is also undertaking their own efforts to develop such a peer-to-peer system. The companies which are trying to build such a system include Royal Dutch Shell, British Petroleum, Tokyo Electric Power Co.
NREL is trying to increasingly use blockchain in order to provide better services to the customers as well as help the energy producers utilize their entire capacity. This program would also be able to trace the results and make the entire grid of United States much more efficient in the future.
It remains to be seen whether the system is successful in the initial test runs or not. If indeed, it is successful there are high chances that it would be rolled out all across the country and other nations would also take inspiration from it and use blockchain based systems for their energy grids.
How can governments use blockchain to build better public services?
According to a story published by Computerworlduk, Experts from the European Parliament and private sector discussed the potential of blockchain in government at London Blockchain Week.
The blockchain hype keeps growing and governments are starting to take notice. Widespread adoption of the distributed ledger technology remains a long way off, but it could help address some major public sector challenges.
Advocates envision blockchain ledgers creating a future connected government that is paperless, interoperable, auditable, distributed and tamper-proof.
“Blockchain offers governments a fast, secure, efficient, transparent means of being able to deploy government services and communicate with their populations,” Dr Jane Thomason, the CEO of research firm Abt Associates-Australia, argued at London Blockchain Week on Wednesday.
“This is the panacea. This is what we’re going for,” she added.
Potential government use cases include supply chain, health records, transportation, voting, provenance, energy, taxation, land titles, industry creation, tokenising welfare payments, engagement with citizens, digital currencies and fast payments, to name just a few.
It could provide easy and secure permission to access public sector data and use digital IDs to support simple on-boarding for services, benefits that a number of tech-savvy governments are already exploring.
Use cases for blockchain in government
Eastern European governments have often led the way on blockchain adoption, most notably Estonia’s, which has been testing the technology since 2008. Since 2012, it has used blockchain across registries including national health, judicial, legislative and security.
Georgia’s government has also experimented with blockchain, in a land registry project developed with the Bitfury Group.
It previously took three to four days for the government to process a citizen’s land title, a slow process that didn’t evince full trust from its users.
Around four million land entitlements have since been added to the new platform, which is anchored to a bitcoin-like network that provides proof of the transactions.
“We’re able to process around about 3,000 transactions by the second and a clearance time of around 2.5 seconds for any transaction,” said Willem-Jan Bruin, the director for Western European blockchain-based solutions at BitFury Group.
Lithuanian MEP Antanas Guoga has made investments of his own in blockchain, and believes the general authorisation of documents will be the most successful early use case for the technology.
“Everything can be on blockchain; when you purchase your title, whenever you’ve had a service done that’s important, whenever you’ve been to the doctor and you have to show your insurance numbers,” he suggested.
Ashley Fox, the MEP for the Southwest of England and Gibraltar and leader of the British Conservatives in the European Parliament, adds access to criminal records to the list.
Employers who need to check these records in the UK currently have to contact an agency in most cases, a slow and costly process that blockchain could completely transform.
“Individuals would know what the state held on them and could then grant access to a school or a nursing home, and that whole process would be speeded up enormously, and that would grant great reassurance to citizens and to future employees,” said Fox, a member of the European Parliament’s all-party Innovation Group.
Thomason from Abt Associates-Australia is also enthusiastic about the potential for blockchain voting, which the Flux party in Australia is using for its voting systems.
She said that every voter in a state election in Australia costs the government around AU$2,500, which a new platform developed by Melbourne blockchain startup Horizon State promises to cut to 50 cents.
To put this into practice, the platform would first need to gain the elusive trust of both citizens and government though.
Challenges to government adoption of blockchain
There are currently numerous constraints to widespread adoption of blockchain. Governments are particularly worried about cyber security, the dark web and regulatory compliance.
They will also be concerned that the pathway to adoption will be costly and complex. To overcome this barrier, both Bruin and Fox recommend starting with simple pilot schemes that can demonstrate success to attract support for further applications.
“You’ll find that most politicians are really very nervous of using new technology, of introducing new schemes, because they’re fearful of what will happen when it goes wrong,” said Fox.
“So I think governments will be quite slow to introduce blockchain technology, even though it has great potential.”
Citizens will also be concerned about their privacy and the security of the system, particularly when the hype hits its peak and crashes down to reality, as the cryptocurrency collapse recently proved.
The bitcoin boom attracted investment from many members of the public, and the bust then lost their trust.
Their anger could also trigger a draconian response from governments.
Tips for government use of blockchain
Gibraltar has made some early inroads of its own with the technology, including the Gibraltar Blockchain Exchange, a subsidiary of the stock exchange plans. Its government plans to soon create a new a licence for startups working with blockchain.
Fox attributes the territory’s success to its focus on quality.
Gibraltar takes a principles-based approach to regulating its gaming industry, with a focus on honesty and integrity that mean nine out of every 10 licences are turned down. If they later misbehave that licence will be taken away.
Receiving a Gibraltar license therefore shows a company is a serious player. Fox believes a similar approach to granting blockchain licences will support quality applications.
“It’s just impossible for politicians to draft a law that’s going to deal with every eventuality in the future, and I think that were we to try we would fail,” he explained. “So I think a principle-based approach is entirely right.”
Lithuanian MEP Guoga believes that blockchain will develop best if government limits regulations and allow it to be tested in real environments. “This is where we have to let people in and be open-armed,” he said. “Give leeway and allow them to develop.”
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