Can The UK Government Really Benefit From Blockchain?
IN DEPTH: Beyond the hype, can the government exploit Blockchain in the same way as other industries such as banking and insurance?
There are several obstacles for government when it comes to Blockchain.
There is the ridiculous amount of energy that is consumed by a Blockchain; the Bitcoin Blockchain was apparently using more electricity than Ireland at one stage. However, technological advancements are coming thick and fast, and the technology is more able to be scaled.
Lehmann suggests the biggest inhibitor to Blockchain technology is the co-ordination across government across various departments. He puts this down to different budgets and resources available to each department, and the commitment required to synchronise processes.
Departmental cooperation
He also says there could be political ramifications – whereby certain parties would resist this particular type of data sharing because of concerns about how much power the government has on them.
Ian Trump, global security lead at SolarWinds MSP, says that most governments are plagued by an abundance of legacy systems which don’t share data, with information held in separate discrete databases.
He thinks that it would take “a monumental technology investment” to re-write or re-build those systems to incorporate Blockchain, and that this is unlikely to be possible because of budgetary restrictions.
“It’s hard to host a ribbon cutting ceremony for the release of a ‘Blockchain application’ instead of a new community centre,” he argues.
Strategy and skills
The UK government must take note of the Isle of Man’s strategy of Blockchain – Donegan says his government was the first in the world to recognise the potential of Blockchain, and the first to choose the appropriate regulation for the technology, and this has enabled the firm to look at how it can exploit the technology going forward.
Adrian Sheddon, head of fintech at UK law firm Burges Salmon LLP says that from a legal and regulatory perspective, the main issue around the use of Blockchain solutions is the inability of current law and regulation to keep up with the development of novel applications and business models.
“In using any new Blockchain technology, the government will need to ensure it doesn’t find itself caught in the purview of the Financial Conduct Authority’s regulatory regime,” he says, adding that this is exactly what happened with crowdfunding platforms, and therefore emphasises that the government should take a proactive approach to engage with and support developments in this area.
When will see the benefits? Read more on page 4…
