Why Blockchain is a Key Technology for State and Local Governments


This article has been republished from The Conversation. Read the original article.

People hear a lot about blockchain technology in relation to cryptocurrencies such as bitcoin, which rely on blockchain systems to keep track of financial transactions between people and businesses. But a crash in public confidence in cryptocurrencies like TerraUSD—and therefore a massive drop in market value—doesn’t mean their underlying technology is also worthless.

In fact, there are many other uses for this type of system, which do not depend on centralized storage and how many people can participate safely, even if they do not all know each other.

As a computer scientist exploring new technologies for future smart communication network technologies, I, along with many engineers and developers, have shown that blockchain technology is a promising solution to many challenging problems in trust and security for next-generation networked applications. I see several ways blockchains prove useful that are not related to cryptocurrency.

Supply chains

Modern global supply chains require a huge amount of information for the huge number of products shipped around the world. They suffer from limitations on data storage capacity, inefficient paper processes, disjointed data systems and incompatible data formats. These traditional centralized data storage methods cannot effectively trace the origin of problems, such as where a poor quality product came from.

Storing information on a blockchain improves integrity, accountability and traceability. For example, IBM’s Food Trust uses a blockchain system to track food from the field to retailers. The participants in the food supply chain record transactions in the shared blockchain, which makes it easier to keep track.

Health Service

Data ownership and privacy are main concerns in the healthcare sector. Today’s centralized systems cannot meet all the different needs of patients, healthcare providers, insurance companies and government agencies. Blockchain technology enables a decentralized system for access control of records where the interests of all stakeholders are safeguarded.

Blockchain systems not only allow healthcare providers to securely share patients’ medical records, but also allow patients to track who has access to their records and determine who is authorized to do so.

Banking and finance

Banking and finance benefit from integrating blockchain networks into their business operations. Instead of trying to develop cryptocurrencies with new or different capabilities, the financial sector has recognized that blockchain systems are a reliable way to store information about traditional currencies such as the dollar, euro and yen, as well as financial products.

Blockchains give consumers the convenience of being able to monitor their transactions as they are processed, in near real-time from anywhere. Banks also benefit from blockchains, with the ability to conduct business between institutions more efficiently and securely.

Property register

Today’s manual process of registering property rights is burdensome and inefficient. Traditional paper documentation is time-consuming, labour-intensive, non-transparent and vulnerable to loss. Blockchain technology eliminates inconveniences, inefficiencies and errors, and reduces costs by migrating the entire process to digital form.

Blockchain systems allow owners to trust that their deeds are accurately and permanently recorded. Remote access is especially important for people living in areas without adequate government or financial infrastructure.


Validating votes and maintaining voters’ privacy seem like contradictory requirements. Blockchain systems hold promise as a means of facilitating a fair and transparent modern voting system. Because a blockchain-enabled voting system is nearly impossible to tamper with, it can maintain a transparent election process.

In the November 2018 midterm elections in West Virginia, a blockchain-based voting system was used and found to be secure and reliable.

Smart cities

A smart city builds information and communication technology into its facilities, infrastructure and services to provide its citizens with a practical, intelligent and comfortable living space. A smart city is essentially a network of many devices that can communicate with each other to share data. Connected devices can include people’s smartphones, vehicles, electric meters, public safety monitoring systems and even homes.

These systems have performance, security and privacy requirements that centralized information systems cannot handle. Blockchain is a key network technology for building smart cities because it is able to optimize operations, improve security guarantees and increase mutual trust among participants.

The future of information technology is about decentralization. Today’s centralized architecture fails to meet the increasingly diverse needs of people who want the freedom to personalize their own services, control their digital assets and more easily participate in democratic processes. Blockchain is a key technology for building any secure and durable decentralized information system.

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