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How Blockchains Could Make Governments More Efficient

For many, the idea of “government efficiency” is an oxymoron. There are multiple layers of bureaucracy and entire political movements that have emerged around this concept, to seemingly no avail.

But what if governments could be run more efficiently through open access to records and better delivery of services? That’s the hope that blockchain applications offer.

The most visible introduction of blockchain technology for government operations was recently concluded in Cook County, Illinois, one of the most populous counties in the U.S., which includes Chicago and several suburbs.

A pilot project by the Cook County Recorder of Deeds, which stores real estate transactions and records, recently explored the possibilities of using blockchains in a pilot project to store massive amounts of data.

“Our main takeaway is that it could reform the entire way that government develops and procures technology,” John Mirkovic, deputy Cook County recorder for information technology and communications, told the Chicago Tribune. “For real estate, it has the opportunity to remove people from the transaction who don’t add value outside the system. They provide value within a broken system. If you fix the system, they become unnecessary.”

But how, specifically, could blockchain technology improve the system of storing deeds and title records? An immutable database would eliminate the flow of paper from one party to another. Instead of rifling through a stack of documents, you could access the information you needed from a personal computer.

In practice, this is how the Cook County system would work, according to the recorder’s report:

“’Digital property abstracts’ can consolidate property information that is currently spread across multiple government offices in one place, empowering residential and commercial property buyers, as well as lenders and other interested parties while creating a framework for a digital property token.”

  • Asymmetric key cryptography can protect property conveyances (“akin to locking the transfer with a secret password”); it “would make unauthorized conveyances more difficult, protecting homeowners and lienholders.”
  • “Digital signatures could phase out ‘wet’ signatures from the public record and could thereby increase privacy and security,” possibly also enabling secrecy. “It remains important for Illinois’ land registry to remain open and continue to identify all who participate.”
  • “In many cases, a parcel could be easily conveyed using the Bitcoin (or another) blockchain, but if that process also included tokenizing title to the parcel and making the digital asset a bearer-asset; this further outcome may not be desired or, if desired, may create new challenges that must be addressed.”

The Cook County project, if successfully implemented, could be one of the first large-scale government applications of blockchains, although it still faces many technical and political hurdles.

Like many government operations, records storage has been done pretty much the same way for centuries. Land titles, deeds and other real estate transactions are usually committed to paper. Digitizing these documents has always proved challenging.

“Blockchain [technology], is not an all-or-nothing approach,” the county’s final report concluded. “Aspects of the component technology can be implemented individually or selectively to improve recordkeeping outcomes.”

Blockchains could also be used to deliver government services more directly. In Riyadh, the capital of Saudi Arabia, for instance, officials have partnered with IBM to streamline government services.

The Saudi government, in experimenting with blockchains, has held an Ethereum “boot camp” to explore the technology. Officials said they are hoping to create a “digital environment” under their national action plan to modernize their government.

"Through the collaboration between Riyadh Municipality, Elm and IBM, we will be able to help the Saudi government reimagine and transform the way in which services are provided to citizens, residents, businesses, and visitors,” stated Tarek Zarg El Aioun, an IBM executive. “It is a strategic step towards supporting the objectives of Saudi Arabia's Vision 2030."

In February, The Saudi Arabian Monetary Authority (SAMA) partnered with Ripple to test Ripple’s international payments technology for its banking system. A pilot program will permit Saudi banks to use Ripple’s xCurrent solution for cross-border payments.

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