How the world is experimenting with blockchain

Blockchain technology offers the promise of more efficient and accurate processes because of how it works. And for governments that is exciting given the amount of data that they hold on citizens and how they are pushing to digitize much of that. Nations are also responsible for a massive amount of record-keeping which could move to the blockchain.

Let’s a take a look at some key trials of blockchain technology in government.

Voting

Elections are susceptible to fraud and human error. Blockchain has been touted as a solution to fix that. A number of trials have happened around the world. One of the most recent happened during West Virginia’s primary election in May. Select votes could use a blockchain-based mobile app to vote. It was created by a company called Voatz.

So how did blockchain voting work in this situation?

People voted via a mobile app which was essentially the equivalent of a ballot paper. The mobile ballots are “tokens” or potential votes which are cryptographically tied to a candidate. The voter makes their decision, it is verified by a number of different servers or computers known as “validating nodes.” Upon verification, the token or ballot paper is debited from the voter’s ledger and put on the candidate’s ledger. This is an automatic process and means that a single person cannot vote twice. And it’s now on a blockchain that cannot be tampered with.

Credit checks

China has been cracking down hard on cryptocurrencies and ICOs, but it has been focusing heavily on DLT. Earlier this year, Chinese President Xi Jinping said that blockchain has “breakthrough” applications.

Parts of the Chinese government have been working with blockchain firms in various areas such as credit scoring. One of those companies is Points which has partnered with a subsidiary of China’s Ministry of Industry and Information Technology and the China Academy of Information and Communications Technology to create blockchain solution for know your customer (KYC) and credit scoring.

The KYC product removes the need for institutions to repetitively conduct the process manually.

“With its partnership with the Chinese government, Points has access to verify ID and criminal records on 1 billion people in China. Thanks to Points’ blockchain protocol, the normally time-consuming KYC process which would normally be done manually, increases the efficiency for institutional partners,” founder Sarah Zhang told CNBC by email.

“It does this by reducing the institution’s need to store data on their own servers as Points because they can simply verify identities or other relevant information through blockchain that has already been verified before.”

This process could be used all around the world but requires data to be opened up to allow verification of a person’s identity and their credit score.

Supply chains

Supply chains are very complicated with several parties involved across many countries. Goods are passed between various parties and lots of contracts are involved in the process. This is a scenario where DLT has been tested.

At a government level, the U.K.’s food watchdog carried out a pilot using blockchain technology in a cattle slaughterhouse. In the pilot, both the Food Standards Agency (FSA) and the slaughterhouse had permission to access the data. They were able to share information on the supply chain, working off one ledger, rather than various different documents.

Blockchain-based supply chains is something several companies are trying out too.

These are just a handful of examples where blockchain has been trialed with many more in the works.

What next?

Blockchain is without a doubt one of the most-hyped technologies this year with people working in the industry seeing it as a silver bullet solution to many processes, which indeed it may not be. Trials are underway but there’s a long way to go before this becomes mainstream.

A number of competing blockchain platforms from Ethereum to Hyperledger are battling to become the dominant player. But one big problem for DLT is scalability, that is, whether it can work on a wide scale efficiently, which would be crucial for it to be effective at a national level.

Hileman said that with the price of cryptocurrencies rising and falling many developers of the underlying blockchain technology may have taken their “eyes of the ball,” but are now back to creating solutions that may come to market soon.

“We will see further work done in the next 12-to-18 months in testing various scalable solutions that will deliver on the promises we have heard about,” Hileman told CNBC.

“There are questions that have not been answered, but I’m confident they will be. There are smart people with different blockchain designs and one of these will work, several of these will work. Resources are there, brain power is there, it’s just a matter of time and I think we will see major advances in scalability.”