While the United States government has not yet publicly promoted or experimented with blockchain, other nations have used the secure and unchangeable platform technology to pursue new forms and applications of governance.
In May 2017, the U.S. Department of Homeland Security granted awards of $2.25 million each in research contracts to three blockchain startups as part of its Small Business Innovation Research program. The awards are promising steps towards meaningful collaborations between blockchain innovators and government.
As more of the administrative aspects of individuals’ lives move into the digital world, it makes sense for government to experiment in this realm while remaining vigilant in addressing the security and privacy concerns that arise in any conversation surrounding digitalization of public infrastructure and processes. The following are discussions of areas in which this is particularly important for city and local governments.
It is no secret that the United States has fallen behind most other developed countries when it comes to voter turnout. In fact, the Pew Research Center found that, in 2016, only 55.7 percent of voting-age Americans cast a vote in 2016. Blockchain can enable secure, real-time representation with decentralized voting.
It can also promote increased engagement in decisions related to city government, such as online participation in a referendum or city ordinance change. Organizations like Follow My Vote and Democracy Earth have developed ways in which individuals can vote in elections or delegate their votes in real-time.
Follow My Vote aims to increase voter turnout, as well as improve the security and accountability of elections. The organization promotes blockchain as a means to organize voting in any election securely from individuals’ cellphones or computers, or connected voting stations. In this scenario, individuals would register much like they do in today’s elections, but would be given their own secure accounts and identification numbers from which to cast their ballots.
Ballots, in turn, would be anonymously counted in real-time. Imagine a secure election with high voter turnout and results available the minute after “polls” close.
The list of states introducing and passing blockchain related legislation is growing. Most of these bills commission the study of blockchain while others seek to attract companies and start- ups with blockchain-based business models. In 2017, Delaware passed a measure that allows corporations in that state to “use [distributed ledgers or a blockchain] for the creation and maintenance of corporate records.”
Former Delaware Governor Jack Markell introduced the Delaware Blockchain Initiative in May 2016, committing the state to progressively deploying the technology. The initial phase involved using blockchain as the infrastructure for the state’s public archives. Smart records can now automatically comply with laws of retention and destruction, as well as being more searchable and accessible.
Delaware has since been followed by Illinois. The state launched its blockchain initiative as a way to build a collaborative space to inform an array of state departments about the technology, as well as to solicit input and collaboration from the private sector.
Since the launch of blockchain initiatives in Delaware and Illinois, other states including Nevada, Arizona, Vermont and Maine have all introduced or are considering legislation aimed at legitimizing the electronic signatures made on blockchain as an enforceable transfer of ownership. For a current map of blockchain related legislation, visit the Center for City Solutions at nlc.org/blockchain.
Subscribe to CitiesSpeak
The First E-Nation
Local governments in the United States are leading the charge towards blockchain-based innovation, but other nations are also fully embracing these trends. For instance, since its highest court ruled that the internet was a basic right in 2000, Estonia has become the world leader in digitizing government. The country has moved to what it calls “e-Estonia,” where everything from voting and business registration to cabinet meetings can be conducted online.
In order to do this, the government issues every Estonian an e-identification card which carries its own 2048-bit key encryption. Nearly 95 percent of the population uses their cards for everything from ling taxes and voting to picking up prescriptions and paying for public transit.
The gains in efficiency that Estonia has experienced are significant. For example, after moving title registration to its e-Land Register (a unique website that contains information on ownership related to real estate and land), the process time for land transactions went from three months to eight days. Their e-Justice system allows anyone to file a claim electronically and receive a hearing within the next hour. Evidence can be entered electronically, questions posed and legal representatives involved, all digitally. And if the case is simple enough, no court visit is necessary.
Businesses can now register themselves and file annual reports entirely online, reducing the time needed to register a business from 5 days to 18 minutes. This type of administrative streamlining holds enormous potential for cities and the ability for new businesses and start-ups to thrive in local economies.
For more information, read our full Blockchain in Cities report.
About the Authors: Camille Moore was a Carnegie Mellon Heinz Fellow in NLC’s Center for City Solutions.
Elias Stahl was the urban innovation intern in NLC’s Center for City Solutions and Applied Research.