Blockchain has the potential to improve the public sector by enabling secure and immutable data management. The technology can reduce government expenditures by acting as a public ledger and, hence, eliminating intermediaries. Let’s shed some light on the three areas where blockchain can come in handy for authorities.
Blockchain-backed Currency Can Become Our New Reality
Have you ever heard that by the early fall 2018, there were almost 2,000 cryptocurrencies, and their number is still soaring? What’s even more interesting is that in August 2018, Venezuela announced the adoption of its new currency, bolívar soberano, that is warrantied by the oil-backed cryptocurrency petro. This step has been taken in order to combat inflation estimated at 1,000,000% in 2018. That was the first incident of this nature, but we’re likely to hear more in the near future.
The Role of Blockchain
The blockchain decentralization and data storage algorithms protect cryptocurrencies from any fraud, such as hacking or data forging. As blockchain’s witness nodes monitor every transaction, no money ownership rights can be transferred illegally. In addition, as blockchain scales and serves as a public ledger, these transactions are made fast and cost-efficiently.
Countries Are About to Adopt Blockchain for Land Registry
After Haiti’s hurricane in 2010, a lot of land tenure issues came up. It was a hodgepodge of and boundaries and the ownership rights for land and buildings built before the hurricane and after among the debris of destroyed property. In attempts to prevent similar cases in the future, some countries started collaborating with blockchain-driven startups that work to enhance the land registry mechanisms.
In some cases, blockchain adoption is managed at the country level; in others — at the level of municipal agencies. For instance, the City of South Burlington (USA) has announced its collaboration with the startup Propy in order to securely store the property rights.
In Sweden, the government is currently being assisted by the startup ChromaWay that introduces blockchain-powered land property transactions, while also planning to switch to Lantmäteriet, a more scalable blockchain-led solution. Meanwhile, in the Netherlands, the platform Computable is going to be onboarded for these purposes. And that’s not all cases, as the list can be continued.
The Role of Blockchain
Smart contracts can be considered the most important feature of blockchain improving the land registry. They trigger money transactions and ownership transfer as soon as a land purchase agreement is signed.
Other benefits of blockchain relevant here are immutability and immediate traceability of every transaction. Once recorded, data can’t be copied, forged, or deleted without all the witness nodes confirming the action or a trail left in the system.
Although a lot of new startups operating within the land registry are popping up on the market, the opportunity for newcomers to step up and take their place in this domain still exists. To do it faster than competitors, you can build your own solution on top of genEOS, a ready-to-use blockchain ecosystem. It’s characterized by decentralization, smart contracts, and easy scalability.
Taxation to Be Taken to the Next Level
Blockchain can improve two key aspects of taxation: to collect taxes in a more cost-efficient way with no third parties required and to allocate funds transparently via smart contracts and digital ledgers.
Do you know about the gigantic proportions of tax avoidance in the USA and China? They are estimated at almost $200 bn and $70 bn respectively every year. This shows that the tax evasion detection rate is rather low, so more people are likely to risk and hide their real income. Blockchain’s incorruptible ledger would prevent such violations.
When it comes to taxes allocation, taxpayers are concerned with the integrity of responsible government bodies. Introducing more visibility into where the money goes and how exactly it is spent can be an ultimate purpose of blockchain solutions here.
The Role of Blockchain
Blockchain-led smart contracts can trigger tax payments once an individual receives income. In addition, blockchain allows immediate tracking of all records and provides all its members with real-time data.
When it comes to guaranteeing fair tax allocation, blockchain-based data can’t be forged, and every transaction gets monitored by the chain members, so no penny will be left untracked.
Summing Up
In the public sector, cryptocurrencies help prevent embezzlement and make transfers cheaper comparing to fiat currencies or e-money, all thanks to blockchain-based digital ledgers.
Blockchain-led solutions can also enhance the land registry by providing all the system members with the same immutable data immediately. In this case, the ownership details will be error-free, legit, transparent, and traceable.
And the last but not least, blockchain-driven smart contracts could improve tax collection, whereas an incorruptible ledger could guarantee fair allocation of taxes.