Blockchain Comes with a Possibility of Reducing Governmental Burden – Here’s How
Researchers have projected that blockchain will save $20 billion annually in the financial sector by 2022 alone, with similar predictions in sectors like governments, healthcare, insurances, etc.
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Back in 1995, Bill Gates attended a tech conference with an aggregation of world tech leaders which then spoke of the potential of an emerging tech revolution – the World Wide Web. That time around, the world hadn’t experienced much of the online world, let alone online shopping, news updates, online gaming or entertainment. However, that did not stop Mr. Gates from returning to Microsoft and changing the company’s plan to focus more on the possibilities of the internet. Fast forward 20 years to today, we see a similar intrigue around the possibility of blockchain technology. While it is agreed that blockchain technology is unlikely to capture the kind of public attention or imagination the way the internet did 20 years ago, but that’s primarily because blockchain is expected to impact businesses behind the scene. So, chances are that you will not notice the percolation of this technology in the way you operate things on a daily-level. However, the potential is enormous and the possibilities are endless.
To put it simply, blockchain technology is a distributed ledger that chronologically records transactions in real time. It is essentially a protocol for exchanging value over the internet without an intermediary. It is immutable, decentralized, secure and allows transactions to happen at near real time, which means that it provides players with unparalleled flexibility, speed and security in conducting their operations through blockchain.
These benefits have led to several public-sector organizations to test the possibilities of the technology and run Proof-of-Concept in specific use cases. For about three years now, agencies in countries like the United Kingdom, UAE, Canada, India, China and Brazil are running pilots and tests to examine the broad utility of blockchain in different government services. For instance, the UAE government has been exploring a wide range of use cases for business registration, trade and central bank operations, while Estonia, is testing blockchain based solutions in health-care, voting and identity management.
By reducing dependence on existing institutions and their subsequent costs, layers and hierarchies, governments can use blockchain to eliminate significant resource burden and expenditure. And thus, by removing these layers of costs and redundancy, the government is left with more time and resources to lay its attention on other pertinent issues.
Another benefit in the recent times has been the ability to use different elements of blockchain to create a hybrid form of platform that enables players to use the pros of each platform, like remittances features of Ripple to Smart Contracts of Ethereum and consolidate them to create a new platform for governments to reduce trillions from their infrastructural burdens.
Take for instance, the hybrid platform Tradefinex that enables peer to peer financing between government, corporations, buyers and suppliers to make efficient use of capital and deploy projects without burdening the Government Treasury. It has combined the features of Ethereum, Ripple and Quorum to bring a strong and efficient platform for government bodies to work on. Such platforms in blockchain technology are expected to help local bodies, communities, corporates, financial institutions, end users, suppliers, and the list goes on. Not only blockchain enables financiers to channelize their money in profitable businesses but also takes the burden away from government by not having to take money out of their own treasury. Similarly, it also enables local suppliers to interact with global projects and financiers that helps them grow exponentially in their businesses.
Similarly, IT departments in governments can create rules and algorithms that will allow data in a blockchain to be automatically shared with third parties once the predefined criteria have been met. In longer term, blockchain may also allow individuals to gain direct control over the information that governments keep about them. This kind of transparency will make it easier for agencies to achieve a networked public service that is faster and more secure.
Researchers have projected that blockchain will save $20 billion annually in the financial sector by 2022 alone, with similar predictions in sectors like governments, healthcare, insurances, etc. While we wait to see the amount of time that governments take to transform their operations to blockchain, one thing that is sure is its ability to reshape processes and in turn the world economy.
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