Blockchain in Government: Enhancing Security, Transparency, and Digital Trust

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By Danyil Poliakov
Designing DLT-blockchain solutions for the last decade, I have encountered numerous misconceptions and confusion regarding the role of distributed ledger technology in complex IT systems. As a technology, my primary aim is to support the adoption of DLT-blockchain solutions by explaining and demonstrating how they can enhance existing government processes.
While DLT solutions are widely embraced in the private sector, government implementation remains relatively limited. Some governments explore the DLT-blockchain potential through pilot-like projects. For example, the Japanese city of Tsukuba tested a blockchain-based system that lets residents cast votes to decide on local development whereas Estonia implemented a blockchain-based e-residency programme.
The overall success of these projects indicates that fully scaled blockchain integration in government services is expected shortly.
Notwithstanding this success, exploring the benefits of blockchain in government digitalisationand addressing challenges and common misconceptions is always important.
DLT-blockchain experienced rapid growth following the launch of Ethereum in 2015.
Like any emerging technology that evolves from a specific use case, it initially lacked robustness and flexibility. However, over time, it matured into a battle-tested framework capable of addressing key government digitalisation challenges rather than introducing new complexities. The technology is still young, making strong and credible expertise hard to find.
One of the primary challenges that DLT-blockchain can help resolve is cybersecurity citizens is a fundamental government responsibility, and addressing these threats requires careful consideration.
Beyond technical concerns, security risks arise from the need to trust system administrators, database managers, and other sensitive data personnel. The potential for data breaches and compromise increases significantly in such environments. By introducing blockchain-based notary services, governments can establish trustless layers where maintenance staff cannot access sensitive data. This approach benefits from the extensive security testing of thousands of ethical and malicious hackers, ensuring a robust defence against cyber threats.
Implementing a trustless layer requires the involvement of notary officials as SME’s and process owners. While this layer improves overall government efficiency, it limits the authority of corresponding government agencies. This creates additional challenges for the implementation projects.
Another critical issue in government digitalisation is the reliance on external vendors for software solutions in vital services. This dependence creates operational burdens and introduces security risks, as vendors may engage in unethical practices, such as embedding spying backdoors. Developing proprietary solutions is one way to mitigate these risks, but the costs can be prohibitive.
A more viable alternative would be the adoption of open-source blockchain solutions that have been thoroughly audited by the global community and successfully implemented in various use cases. Projects like the Ocean Protocol data marketplace and Ethereum Name Service (ENS) offer decentralised and secure alternatives that eliminate unnecessary vendor dependencies.
Accessibility is another key requirement for government digital services. Governments must ensure that all citizens have equal access to digital platforms, which often necessitates legislative changes. However, updating legal frameworks can be a slow process, requiring parallel support for paper-based and digital workflows.
This dual approach leads to inefficiencies, increased operational costs, and system failures. DLT-blockchain solutions offer a seamless alternative with simple, unified interfaces accessible from any browser. Due to their decentralized nature, they provide continuous uptime, ensuring uninterrupted service delivery to citizens.
Privacy protection remains a major concern in modern digital platforms, especially with stringent data protection regulations such as GDPR. Balancing these legal requirements with the technical aspects of digital government services can be challenging.
However, modern cryptographic techniques enable the design of privacy-preserving blockchain solutions. These solutions can range from government-controlled data structures to self-sovereign identity (SSI) models that empower citizens with full control over their personal information, allowing them to decide who to share this information with, almost instantly.
By leveraging these privacy-enhancing technologies, governments can create secure and compliant digital platforms, all of which may be interlinked to allow seamless transmission of information.
A digital government ecosystem empowered by blockchain-based identity and notary layers represents a transformative step toward a more efficient, secure, and transparent governance model. By adopting blockchain technology, governments can harness the full potential of modern advancements while ensuring security, accessibility, and privacy for their citizens.
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