Governments may use Blockchain technology and government regulators to improve security, streamline processes, and integrate hyper-connected systems while also increasing transparency and credibility. Today, the emphasis is on virtual currencies that are issued by the central banks.
In essence, there is no central body or government that controls the issuance of bitcoin tokens. It also has nothing to do with cryptocurrency as a means of trade. Without the involvement of a third person, operations on the blockchain are conducted, verified, and published on the public ledger.
Blockchain and government regulators
The hard challenge for governments and regulators is to strike a balance between blockchain innovation and customer and market safety. To do so correctly, governments and regulators must first comprehend the potential of modern technology, not only for member companies but also for government systems and public welfare. Government agencies may use blockchain technology to simplify difficult and antiquated procedures ranging from company licenses to taxation to transactions, making our lives simpler across all areas of industry, government, and community.
Several publications regarding blockchain in government and regulation were published by the Blockchain Research Center and its research collaborators, such as:
- Combining Multiple Account balances with Blockchain is a report that looks at how blockchain might help governments simplify and enhance effectiveness by providing a digital single record for all transactions.
- CoBitcoin for Ohio Income Taxes highlights the usage of cryptocurrencies for taxes as possible use of blockchain in the banking markets.
- mpany Licensing: state Blockchain Governance identifie the advantages that blockchains may bring local governments in terms of speeding up the establishment of new enterprises, assisting entrepreneurs, and strengthening development times.
Blockchain benefits in government
Increasing Citizen Trust
Pew Research reports that American faith in the government is at an all low. Just 18% of Americans believe they can expect the people to do the right thing the majority of the time. The reasons for this mistrust are diverse and complicated, but blockchain can help change this situation.
Visibility through decentralization is a crucial characteristic of cryptocurrency systems, allowing all participants to access and value information. Some citizen operations might benefit from a blockchain technology that allows for independent confirmation of government arguments. Sweden, Estonia, and Georgia, for example, are exploring cryptocurrency land registers, which allow different parties to safely maintain copies of the registration. This model may be useful in resolving land disputes fast or preventing them completely. When individuals and governments exchange records, the risk of mistrust is reduced.
Secure personal data
In today’s digital environment, personal information thefts have become commonplace. The 2017 Bloomberg database hack revealed the complete names, Credit Card numbers, dates of birth, residences, and driver’s license numbers of 143 million Americans. More than 20 million data of former and current federal employees were taken from the Department of Personnel Company’s databases just two years prior.
Governments are attractive targets for hackers because they are the primary record keeper for civilization. Rather than accepting such assaults as a cost of conducting business in the age of information, they might be minimized or avoided by using blockchain-based data architectures responsibly. Such data architectures strengthen information security by lowering the chance of a single point failure, and they can make initiating a breach technically infeasible.
Government organizations, such as the Homeland Security Department, are taking blockchain technology in cyber security very seriously. The Department of Homeland Security is financing blockchain firms to perform research & design and test novel methods for security. “Blockchain technologies have the potential to transform the way we maintain online identity and use the internet,” according to a DHS official. “This R&D effort will help bring this possibility closer to reality.”
Cost-cutting and efficiency enhancements
Government entities must fulfill their objectives while wisely trying to manage limited resources. Blockchain might be a lifeline for government leaders balancing budgets on a knife’s edge. Blockchain technologies, when used correctly, may minimize redundancies, speed operations, reduce audit load, improve security, and maintain data integrity.
Consider the GSA FAST Lane procedure, for example. This process, which GSA uses to manage new vendor bids, now takes 40 days to complete. But GSA is hopeful that a blockchain system would help it achieve a goal time of 10 days. According to a GSA official, a blockchain reduces the direct expenses of reviewing a proposal by close to 80%.
Take the central government’s continuous difficulty with harmonizing government debt transactions and how blockchain technology could improve efficiency. There are billions of dollars of irreconcilable money in the national budget at any moment. The procedure of balancing these monies is time-wasting, costly, and inconvenient for the budget. A blockchain-based payment and bookkeeping system might enable a permanent inspection.
Is it possible for the government to regulate virtual currency?
Hardline cryptocurrencies supporters and mainstream investors alike have raised the subject of how the state can control Bitcoin. To answer this topic, we must first recognize that Bitcoin and the majority of other ICO-issued currencies are decentralized.
What exactly does this imply? In essence, there is no central body or state that controls the issuance of bitcoin tokens. It also has nothing to do with cryptocurrency as a means of trade. Without the intervention of a third party, operations are performed, verified, and published on the shared blockchain.
China has adopted the toughest step, shutting down markets in their nation and escorting miners out via land-use restrictions. Naturally, this has had no impact on the price of a cryptocurrency or the speculative bubble.
The difficulty in controlling Bitcoin and other cryptocurrencies is that they operate on a peer-to-peer network. While authorities have been effective in banning online marketplaces such as Pirates Bay and Silk Road. There are a large number of cryptocurrencies. The biggest distinction between cryptocurrencies and traditional currencies is that payments are made through exchangers or directly through your coin wallet.