As the world adopts a more decentralized approach to governance, the United States finds itself facing an opportunity which it simply cannot afford to ignore
Still a relatively new form of technology, blockchain is becoming increasingly prominent in multiple business sectors as a more efficient alternative to traditional data storage and transaction management. Although associated most with Bitcoin, the applications of blockchain technology extend beyond the financial sector and could prove to be a valuable asset toward building a more secure, regulated and transparent future for the public sector. Blockchain has the potential to introduce a more effective way to handle a whole range of transactions, from payments, to derivatives, settlement, securities, trade finance and more. In application, introducing the blockchain database into the US public and foreign policy sectors would solve issues surrounding speed and reliability that plague the current system, as well as assist in mitigating the threat of cyber-attacks.
Blockchain is a database, or ledger, which is decentralised and shared amongst a computer network made up of several networks at various locations. Each transaction is recorded as a ‘block’ of data, connected to other blocks which predate or follow the transaction. With each block being time-stamped, a chain of data is created which represents a sequence of transactions. The nature of the network as a de-centralised database divided between multiple networks means that no one user has the authority to retroactively alter an existing ‘block’ or input a new block between two existing blocks.
Blockchain technology has been successfully implemented by multiple countries and international organisations to improve data recording and storage. The UN has reportedly made use of blockchain technology in a number of creative areas, such as disbursing funds to Syrian refugees via blockchain-verified iris scanning technology and eliminating the need for personal ID cards. Similarly, the Estonian government has utilised blockchain technology to produce digital ID’s for its citizens. It is clear that the international community is moving toward the technological future offered by blockchain technology.
In a world that is becoming increasingly secure and digitised, the US risks being left behind in the dark ages. The adoption of blockchain technology is considered to have the potential to advance and improve American diplomacy and development strategy. There are three key benefits of adopting blockchain technology within the US public and foreign policy sectors: increased security, reliability, and efficiency.
Security is ensured as a result of the de-centralised structure of the network. The peer-to-peer design of the Blockchain network removes the need for a trusted third-party for transactions. This form of data collection and storage achieves decentralised security while taking out the requirement for trust for an individual or authority. The structure and design of Blockchain makes it nearly impossible to change, hack or cheat the system. The decentralised nature of the database means that altered transactions remain unaltered on the overall system, exposing the individual server of the hacker as the root of the amendment.
At the government level, the security provided by blockchain proves itself to be a useful asset to internal and external government financial transactions, records or documents which contain sensitive and confidential information. Utilising Blockchain allows for more secure and reliable storing and transfers of such data. Similarly, the inability to hack or alter pre-existing transactions increases the reliability of the information stored within the database.
Higher levels of reliability and efficiency are achieved by Blockchain through the automatic digitisation and recording of transactions, without a need for authorisation from a human central authority. By eliminating the need for human intervention, the system eradicates the risk of human-error. Not only does this technology make the database more reliable, but the digitisation of information becomes instantaneous. There are no delays in processing time, and information from previous blocks of data can be accessed instantly. According to the Department of Homeland Security, this instantaneous digitisation and reliability facilitated by blockchain technology would enhance the auditing of public service operations and improve the delivery of services to organizations and citizens.
These elements of Blockchain technology also simplify and optimise the process of international trade, as they reduce logistics costs and streamline the digital reliability required for cross-border certifications and customs clearances. The introduction of standardised digitisation provided by Blockchain technology allows for easier international cooperation and communication through quick and transparent transactions which would reduce the rate of outdated and slow paper processes which traditionally dominate the fields of foreign policy and development programs.
In a quickly shifting technological world, the US cannot afford to be left behind. Following the successful implication of blockchain technology by the UN and other nations, the US must look forward to the future that is being paved around us. The merits of blockchain technology unequivocally serve to improve and develop international transactions and data storage, rendering unreliable and slow paper systems, as well as centrally controlled digital systems, things of the past. It is important for the government to utilise this new technology within the foreign policy sector in order to keep up and take part in the growing international database. The increased levels of security and efficiency provided by blockchain technology will facilitate a more streamlined, secure future for the public and foreign policy sectors, an opportunity which the US today cannot afford to ignore.