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New Jersey may soon become the last state to begin exploring the use of emerging digital technology known as blockchain to improve government services and improve the security of public interactions.
At the start of next week, the Senate Budget and Procurement Committee will consider legislation that includes a special task force charged with conducting a thorough study of the blockchain, the technology perhaps best known as the basis of Bitcoin digital currency. .
The legislation is modeled on an ongoing effort in Illinois, which set up a blockchain task force in 2016. Nearby Delaware has also sought ways to use blockchain, even as part of its corporate services.
In New Jersey, the proposed task force would be asked to publish a report specifying the feasibility of using blockchain technology to improve the services offered by the state government, as well as county and local governments. At present, many state and local functions are often bogged down by outdated technology, but blockchain advocates say it could equip New Jersey with newer and more efficient systems.
Since taking office at the beginning of the year, Governor Phil Murphy has made innovation and technology, both in the private and public sectors, a key part of a broader drive to stimulate economic growth through the state. He created the position of chief innovation officer and suggested that the state now has the opportunity to jump on the forefront by embracing the latest technology.
Data chains
The next vote on the blockchain task force will be held a few days after federal authorities have announced the imposition of two Iranian men for conducting a series of expensive hacking incidents, including a 2017 ransomware attack on the Newark City Government. Such hacking incidents predate governments and other entities using conventional networks by exploiting weaknesses in systems such as Microsoft Windows to penetrate them. Hackers then use encryption to prevent access to the network unless a payment is made to release it.
Advocates say that blockchain technology is a much safer system because it is based on a complex system based on cryptography in which a shared database links or "chains" data together on a large number of peers. This makes it virtually impossible to make changes without being detected.
"The ledger is owned by all parties involved, which means that in the event of bankruptcy everyone can retain their copy of data and transactions," according to a report published by the Illinois Task Force Blockchain.
"This form of resilience and security offers the opportunity to create new identity systems in which users own data, which remain universally consistent and can not be destroyed," says the report.
The Illinois panel suggested that blockchain technology could eventually "reinvent public services" by better integrating government agencies and managing the exchange of digitized resources more effectively.
"Blockchain technology could simplify the management of trusted information, making it easier for government agencies to access and use critical public sector data while maintaining the security of this information," the report said.
Kean sponsors the creation of a task force
The bill to create a similar panel in New Jersey was sponsored by Senate minority leader Tom Kean Jr. (R-Union). It provides a 15-member task force, with the governor and majority leaders in the Assembly and Senate selecting each two members. The leaders of the minority party in each house would also have the authority of the selected member of the task force. Both legislative houses in New Jersey are currently controlled by the Democrats.
The official head of state technology and the commissioner of the Department of Banks and Insurances would automatically become members, as well as employees of the counties of Bergen and Monmouth. The mayors of Camden, Jersey City and Newark, or their nominees, would also be part of the group.
The task force would be charged with analyzing the "opportunities and risks associated with the use of distributed blockchain and ledger technology". It would also be required to recommend ways in which New Jersey law could be changed "to support secure and undocumented registration".
The task force would have received about six months from its initial meeting to issue a full report to the committees at both the Assembly and the Senate.
"The report should include a general description of the costs and benefits of state and local authorities using blockchain technology, recommendations regarding the feasibility of implementing blockchain technology in the state and the best approach to finance the costs of implementation, any bill that the task force deems appropriate to implement blockchain technology, and any other relevant information for the subject of the report, "according to the bill.
Kean Jr. said the blockchain is already being used successfully in the private sector by large companies and financial services companies to improve security and efficiency. He said he imagines that technology could be used by residents a day to do things like presenting a tax return to the state without having to worry about whether their sensitive information would be compromised.
"New Jersey must lean forward and look forward when it comes to technology," said Kean Jr.
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