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Blockchain technology could offer powerful opportunities for digitally-enabled councils says Socitm briefing

Blockchain technology – the same technology that enables Bitcoin, the digital currency – is set to disrupt many public and private sector business models, potentially shifting power away from current control centres and out towards service users.

Moreover, it may not be long before it is appropriate to include blockchain concepts and technologies in public service redesign exercises, particularly where new policy instruments are being designed. Consequently, Socitm members should be watching developments and even experimenting with the technology.

In its new briefing, Blockchains, Socitm explains how Bitcoin works and how the ideas and technology behind it can be applied far beyond financial transactions. The Government Office for Science is quoted on the potential of blockchains to transform the delivery of public and private services and become a major contributor to digital transformation by redefining ‘the relationship between government and the citizen in terms of data sharing, transparency and trust’.

Two key strands are emerging:

  • Use of private blockchains by individual organizations, ad hoc communities or formal consortia that do not need or want completely public access. For example, in a not uncontroversial move, the UK Department of Work and Pensions is part of a consortium piloting a system that tracks benefits claimants’ receipts and spending patterns in order to subsequently offer financial management advice to those who would benefit from it
  • new services in the open commercial marketplace, threatening leading intermediaries of the current virtual world with even lower cost peer-to-peer alternatives than established ones like eBay, Uber and Spotify

In terms public services, Blockchains envisages the potential of, among other things:

  • a private blockchain-based, self-auditing, database of immutable, secure records to provide what the NHS was trying to achieve with the controversial and now-cancelled, care.data programme
  • deeper levels of automation of tax billing and receipts processes, reducing opportunity for avoidance and fraud
  • expanded credit unions able to re-invent the business models of the finance using a less expensive distributed ledger system
  • identity and electronic voting systems that would be virtually impossible to compromise and eliminate the need for expensive manual vote counts
  • smart contracts linking councils, contractors, local residents and services managing service costs and delivery performance at an extremely granular level, for example, smart bins, lending and sharing schemes
  • blockchain-secured identity services that could provide effective and efficient authentication for citizens, businesses and staff using online services.

Blockchains is packed with references and sources of further reading. It can be downloaded free of charge by Socitm Insight subscribers at https://khub.net/

Further information:

Dr Andy Hopkirk                               andy.hopkirk@socitm.net

Head of Research at Socitm             01604 709456

Vicky Sargent                                     vicky.sargent@socitm.net

Socitm Press Office                           07726 601139