These exact characteristics could potentially advance the realm of taxes as well, which is why U.K.-based organization DigitalCatapult, a catapult center meant to innovate the digital economy, is entertaining discussions on the topic. Moving tax information and accounting records onto a public blockchain system would inherently provide “more useful information and more certainty” to everyone with a stake in a nation — not just tax agencies, but also citizens, business tycoons and government officials alike. As a result of storing a nation’s wealth on a public blockchain, real-time data could be used to increase organizational efficiency and cut down on waste within large organizations — which governments are — where inefficiency and disarray are endemic.
Opacity within government fiscal policy also distances the citizenry, discouraging citizens from researching matters and forming opinions. The increased visibility and inherently uncompromising transparency of blockchain-based systems would help make government budgets and spending more clear, thus lessening the barrier between government and the citizenry, and ultimately encouraging more involvement in democratic processes.
The characteristics which make blockchain technology incredibly valuable extend beyond the realm of finances and the tracking of assets. For example, democratic countries could benefit by using the ability to track transfers of value on a public yet incorruptible ledger system to fundamentally change election processes.
Though different forms of electronic voting are used around the world, the functions and results are nearly identical to, albeit simply more efficient than, physical ballot voting. Ballots go into a black box and election results come out. This method has advantages, but it has drawbacks as well. This system is based on a trust relationship with the third party or government collecting and counting ballots, meaning common citizens have absolutely no way to guarantee that their votes were counted correctly, or that no election fraud was carried out behind the scenes. It’s no wonder voters have little faith in the system, and that countries suffer from low voter turnout and a politically apathetic populace.
Blockchain solutions for the problem of centralized elections have been proposed by the Follow My Vote project, which has designed open source election software based on blockchain technology. The system would represent transfers of value on the blockchain not as currency, but as a voter’s ballot. The transparency of the system would not only allow voters to verify that their individual votes were counted correctly, but also allow citizens to conduct an independent “audit [of] the ballot box” by scanning the blockchain where all votes are cast. The system would also sport strong security against both external cyber attacks and internal election fraud through the immutable and distributed ledger.
While these different applications just begin to scratch the surface, it's clear that blockchain technology could profoundly affect the relationship between governments and citizens by increasing transparency and information sharing.