Applying Blockchain in Government
24 Jun

Applying Blockchain in Government

Today, “blockchain” is tossed around as a solution to many problems, but many don’t understand the specifics of how it works or how it might be applied, particularly in government. A new report from the Data Foundation, Bringing Blockchain Into Government: A Path Forward for Creating Effective Federal Blockchain Initiatives, set out to better define how and why blockchain can help in solving key government data sharing and security challenges.

This report looked at successful ongoing projects involving blockchain to begin identifying what effective adoption and use of the technology looks like, as well as improving understanding of when blockchain should be considered.

The report looked at seven blockchain projects that have moved into a proof of concept phase. These projects included the Food and Drug Administration’s (FDA) pilot to allow patients to have control over what data is shared for research purposes, the Department of Treasury’s effort to more efficiently track agency-issued mobile device use and whereabouts, the Department of Health and Human Services’ (HHS) use of blockchain to streamline the procurement process, and the Department of Defense’s (DOD) work to increase use of 3D printers in the field by using blockchain to “establish the provenance and security of 3D print files and to record file usage.”

We were excited to have the HHS GrantSolutions project included in the study as well. Dovel supports the program, a shared service platform that serves over 50% of all Federal grant programs (nearly 1,500 grant programs) and manages over $80B in annual Federal grants obligations for a community of 100,000 users. GrantSolutions’ blockchain effort is focused on reducing the application and reporting burden on grant recipients and reduce overall data management and technology costs of government agencies. This blockchain initiative enables grant recipients to access data directly rather than rely on legacy paper documents and PDF files from multiple systems that require costly and error-prone duplicate data entry, reducing costly data “hand-offs” to funding agencies.

GrantSolutions team members participated in a panel discussion as part of the report launch. Along with fellow panelists from Treasury and the General Services Administration (GSA), they defined several keys to blockchain success:

  • Defining governance– there needs to be a defined way of gathering and sharing data for the blockchain to work.
  • Data standardization– it is tricky and time consuming to go through all the data and decide how to pull information from different places into one set, but it is a critical step that needs attention.
  • A culture of sharing — agencies internally and across the government must be willing to share data and this is a bit of a culture shift for many. This culture shift has to be accepted at all levels of the organization.
  • Focus on the value blockchain provides — like the lights in your house, you don’t really care how they work you just want to know that when you flip the switch the light turns on. Agencies need to stay focused on communicating the value they are looking to get from the solution.

Blockchain becomes even more powerful when combined with other advanced technologies, such as machine learning (ML). Using ML algorithms, data on the chain can be analyzed to identify patterns that can help reduce waste, fraud, and abuse; flag unusual activity; and provide suggestions to Federal decision makers on areas of potential concern or excellence, so that they can be further investigated.

It is still early in the “Age of Blockchain,” and it will be exciting to see how implementations like the ones discussed in the report and others come online.  As they do, it will become evident where blockchain works (and doesn’t work) to solve real business challenges.  And not too far down the road, blockchain will likely move from being a buzzword in search of an application, to simply a better way to build solutions that deliver real value.