Blockchain bits: Market forecast, state initiatives, cryptocurrency
As blockchain use cases and applications grow, governments at all levels continue learning about the technology.
"By 2025, public blockchain will provide a core interoperable foundation for global decentralised identity management," Gartner analyst David Furlonger wrote in ComputerWeekly.com. That gives governments opportunities to use the developing technology to secure elections, document humanitarian aid and social services to refuges and homeless populations and streamline decentralized, multiparty transactions and manage records.
While blockchain's ability to secure data is attractive, the technology also requires data-intensive computation and adequate storage for unstructured documents and records, Furlonger said.
Elsewhere the market research firm warned that by 2021, 90% of enterprise blockchain deployments will require replacement within 18 months to remain up to date, competitive and secure. Complicating matters, offerings in the fragmented blockchain platform market overlap, making technology choices confusing for IT decision makers, it said.
“Due to the lack of an industry consensus on product concept, feature set, core application requirements and target market, we do not expect there to be a single dominant blockchain platform within the next five years. Instead, we expect a multiplatform world to emerge,” Gartner Senior Research Director Adrian Lee said.
Blockchain-secured mobile voting
Utah County, Utah, announced in July that it would use the Voatz blockchain-secured mobile voting app for active-duty military, their eligible dependents and overseas voters in and Aug. 13 election. The results were audited in a Facebook video that demonstrated the authenticity of 24 election votes that were cast through the blockchain-based app.
The results were encouraging to Amelia Powers Gardner, Utah County’s clerk and auditor, who said the results represent a 38% turnout, compared to a 25% turnout countywide. The app has also been tested in West Virginia and Colorado.
State actions
The Colorado Council for the Advancement of Blockchain Technology Use announced the publication of its final report covering use of the technology in government operations and establishment of Colorado as a national hub for blockchain innovation.
The report identified eight issues including vague and unclear definitions around the various types of tokens and digital assets and overall lack of regulatory clarity governing cryptocurrencies in relation to taxes and banking services. Legislative proposals have been introduced to address some of the roadblocks, but many of the concerns are still being clarified with conversations among stakeholders.
The council made some suggestions on government-specific blockchain applications including training state judges to better adjudicate smart contracts issues, setting up pilot programs to test blockchain secured digital identities for birth registries and banking as well as a voting platform for a Denver municipal election.
New Jersey Gov. Phil Murphy signed legislation creating a Blockchain Initiative Task Force charged with studying the opportunities and risks associated with using distributed ledger technology, how it can be applied to practices in New Jersey and how the legislature can modify current state laws to support secure, paperless recordkeeping. The task force's final report will include the costs and benefits of government agencies utilizing blockchain and recommendations concerning implementation.
California's Government Operations Agency announced appointments to a newly established blockchain working group established to research and document the developing technology’s potential uses. The members are evaluating risks and benefits to state government and California-based businesses and required changes to statues affected by blockchain deployments.
Cryptocurrency
The rising use of cryptocurrencies has short-circuited traditional methods of tracing money and left regulators worldwide exploring new ways to keep track of questionable uses. The Securities and Exchange Commission will be using software by CipherTrace to help it investigate and trace cryptocurrency transactions. The tracing tool, said the agency in its August Fedbizopps filing, would bolster its mission to protect investors and maintain fair, efficient financial markets.
The head of the International Monetary Fund, meanwhile, encouraged the financial sector to be open to opportunities provided by digital currencies. In an address to the Economic and Monetary Affairs Committee of the European Parliament, IMF Chairman Christine Lagarde said that when it comes to digital currencies, central banks and their supervisors should be alert to risks to financial stability, privacy and crime but also recognize "the wider social benefits from innovation" and granting it space to develop.
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