The Uses of Blockchain Technology

Note: To go along with this paper, I wrote a code based on the idea of a blockchain for the citizenry. It can be found here.

Blockchain technology is a revolutionary new technology that has emerged in the past decade or so and is rapidly picking up speed around the world, including in China, Venezuela, the UK, Estonia, Dubai, and the United States, among a few others. According to Google, Blockchain is “a system in which a record of transactions made in bitcoin or another cryptocurrency is maintained across several computers that are linked in a peer-to-peer network”. In simpler words, it is an online, unhackable, cryptographically protected database without a central authority – the epitome of democracy. The idea was first created by Satoshi Nakamoto, a pseudonym for a person or a group of people who suggested the idea of a blockchain. It has a number of uses around the world, especially as they are introduced more and more into technology.

What is blockchain technology, first of all? The blockchain is a piece of computer code that keeps a running list of transactions, not just in cryptocurrency but in anything, that is linked across many computers. Being connected across many computers makes the database a pure democracy: it has no central authority. It is possible to gain influence of course, like it is in every system. In Bitcoin, for example, a cryptocurrency that uses blockchain technology, mining groups such as AntPool can be formed that work together to mine blocks and add them to the blockchain. The biggest group has the most power. Blockchains are also virtually unhackable. There are many computers with copies of the list of transactions, so for a hacker to edit the information, they could have to change the list of transactions on every single computer. Even further, every single block is hashed to protect the information on it. Every block’s hash is based on the previous block’s hash, so if one block in the middle of the chain is changed, it will not match the blocks that come after it, and chances are someone on the network will notice that their blockchain version differs from everyone else’s, alerting them to the hacking that has transpired. The blockchain is immutable – change means hacking. It throws some people off that blockchain’s list of records are kept public, but all the information is hashed carefully so that all people can see are the block hash and the block transaction. Actions that are taken on the blockchain furthermore have to vetted by people, so if these validators see something wrong with the action they will not add it to the chain. Once something is added, it is unchangeable, and this running list of digital information (blocks) cryptographically hashed using elliptic curve cryptography and stored on a public database (chain) has a number of uses, especially in the government.

Governments around the world have started implementing blockchain into their technologies – the United Kingdom and Estonia come to mind. Estonia, for example, since 2012, has been using blockchain to protect national data, e-services, and smart devices both in the public and private sector. Blockchain is used in Estonia’s data registries, like national health, security, legislative areas, judicial areas, and more. The US has even taken after their example, with NATO and the Department of Defense using Estonia’s blockchain, KSI Blockchain by Guardtime. Some uses of blockchain that come to mind based off of having a blockchain for the citizenry are in voting, land, and taxation. This all centers around the government using blockchain for the citizens – for all their information. Currently, citizen’s data and information are stored in large databases that can be hard to find information in; a blockchain could help resolve these issues. Every citizen of the country would be a block on the blockchain with their own signature. All their information would be linked to their signature – data the NSA collects, their name, address, job, degrees, education–everything. It would be public only to those working in the government, and even then cryptographically hashed.

There are a lot of ways in which this centralized citizen blockchain could be helpful for the government- taxation, for example. Solidity is a programming language created by Ethereum centered around making smart contracts in decentralized applications to fulfill a purpose. Mixing the two could be amazing for stopping double taxation – Solidity would run a smart contract that would go to every single “user” on the government blockchain and tax them before moving on. The computer would not mess this up unless it was hacked, and the way Solidity and Ethereum Smart Contracts works is that once a Dapp is published, it cannot be changed. Security is another – Estonia, which is using blockchain for all of its important databases, is immutable and virtually unhackable because all the data is cryptographically protected and if it was hacked, only one copy would be changed, a change that would be instantly detected. Voting is another aspect of government which could be changed. A new blockchain could be created for each candidate for the final voting process. A form would be sent out that each citizen would have to log into using the information that they know, and is stored on the blockchain. They pick a candidate – A or B. If A is chosen, the citizen’s name is added as a block to Candidate A’s blockchain, and its index is upped by one. Citizens would not vote more than once – if their unique hash is already on the blockchain, their vote is deleted. In the end, the blockchain with the higher index wins. It could not be miscalculated, and only citizens would be able to vote. This wouldn’t just have to be in voting a president – picking a prime minister, congresswoman/man, or any other position that requires a vote could use this technology. Fake degrees are another new idea that has come up – people have been forging degrees in order to get a good job. Instead, if universities and colleges logged every degree a citizen earns onto a new blockchain, linked just with names from the citizen blockchain under the degree they have gotten, it would be much easier for employers to check which citizens have what degrees and to make sure that the degree they have been presented with isn’t fake. Land could be tracked on the blockchain; the pieces of land that citizens own would go under the blockchain under their name. Organizations would have their own “citizen” just for land and taxing purposes.

Objectively, this would be great. Data would be more organized and easier to access. The voting process would be cleaner, forged degrees would be unusable, and double taxation would cease to exist. This is the best case scenario, and blockchain has other uses. Just looking at Estonia, and how the country is running on blockchain and how well it is doing, despite being a small country, is an example of what could be. The blockchain itself is a remarkable idea, with hundreds of applications across the world. Cryptocurrency is only one of the uses, as seen in Ethereum’s innovative use of blockchain technology to create decentralized applications. One can only wonder what other uses for blockchain will pop up in the future, apart from taxation, land, degrees, voting, and security, among other uses.

Links:

https://www.coindesk.com/information/what-is-blockchain-technology

https://blockgeeks.com/guides/what-is-blockchain-technology/

https://www.investopedia.com/terms/b/blockchain.asp

https://www.computerworlduk.com/galleries/applications/how-governments-are-using-blockchain-3680393/