Is the blockchain right for your agency?
Blockchain is hot now. But how can it be harnessed in the federal government?
First, a brief explanation. Blockchain is a distributed digital ledger that records and verifies transactions between two parties. Anything of value – property, patents, author rights, etc. – can be monitored and negotiated via blockchain. Because it is a shared ledger, it can be used to log any transaction and track the movement of any resource, which creates greater visibility and eliminates opportunities for malicious parties to modify previous blocks or data transactions.
In short, blockchain offers trust. It is not necessary that an intermediary manages information or resources, so that users can own their data and decide with whom to share them.
Providing trust and emerging technological foundations
Agencies can use blockchain to bring trust in their ecosystems with immutable, distributed, and proven data. Rather than managing data centrally, creating data silos and points of error or vulnerability, blockchain distributes data between the ecosystem of various parts and agencies.
The data is also encrypted. This cryptography works together with the distributed properties of the blockchain to keep data more secure, freeing it to be used as a fundamental technology that others, such as microservices, artificial intelligence or process automation, can exploit.
Even with all the benefits that the blockchain can produce, it may not be suitable for every agency. In cases where IT managers simply try to aggregate or analyze data sets, for example, a simple and inexpensive database will suffice.
How to determine if blockchain is right for your agency
Government leaders should explore the use cases and start asking questions. First, they must decide if their use case is truly aligned with the blockchain architecture, or if a traditional database will achieve their goals.
The use cases that best align with the blockchain are those in which there is a constant flow of shared data and where there is a risk that data may be modified, lost or exposed – for example, in voting, in identity management or in supply chain applications. Where traditional databases require investments to ensure and maintain data integrity and security, blockchain already offers these features.
Identification of use cases
While the implementation can be difficult and expensive for the government at the beginning, blockchain can solve more expensive problems along the way, such as the following:
Data integrity: The Department of Homeland Security and Customs Protection Agency is trying to use the blockchain for secure data collected at the borders of the United States. Because the distributed nature of blockchain prevents strangers from altering the transaction history, DHS can protect data collected from sensors, cameras and other devices connected to the Internet, which will help them identify counterfeit devices that have been added to the network to allow the entry of illegal goods into the border.
Safe supply chain: Because each transaction is placed in the ledger as a block for all nodes in the ecosystem to be validated, blockchain can provide immediate access to information on the origin of any product. For example, the Navy is responsible for the logistics and shipping of critical mechanical parts necessary for aircraft. Using the blockchain, Navy officials could track these parts at every point of contact on the supply chain, ensuring they are safely delivered to their destinations.
Identity authentication: Federal agencies can use blockchain to speed up the process of visitor control in all agencies without the need to share sensitive data. Each agency would have its own encrypted network with information about its visitors. If a person who has been previously identified as suspicious in the system of another agency tries to enter a different agency, that person will be "reported", ensuring that government buildings are safe from external threats.
Ultimately, blockchain has the potential to protect government transactions by creating trust-based environments. If data is reliable, agencies can provide powerful tools such as microservices and artificial intelligence to be more effective and unlock new potential. While blockchain may not be the solution for all situations, where there is potential for use cases, the benefits far outweigh the costs.
Cesar Tavares is director of Octo Consulting technology.