Many local authority and government services have long been at the mercy of paper-based processes, or at best those processes are made available via a web page in which the forms still have to be printed and mailed for completion. Information sharing across public sector organisations and internal departments isn’t known for its efficiency (or whether it exists at all) but these issues could be a thing of the past if Blockchain in public services becomes the norm.

The new report, titled Distributed Ledger Technologies in Public Services, commissioned by the Scottish Government Digital Directorate in collaboration with wallet.services, is based on a study of international best practice, including interviews with technology experts and local public sector agencies, and lessons learnt from real-world use cases and public sector implementations.

The report also identifies a number of processes in Scottish public services which continue to rely on the use of paper and highlights the importance of effective and appropriate information sharing in enabling cross-agency collaboration to improve citizen services.

What Is A Distributed Ledger?

The simplest description of a Distributed Ledger is that it is like a spreadsheet, which instead of resting with a single provider, is shared across a network. Every change is replicated, recorded and agreed by everyone.  Distributed Ledgers use cryptography to make them resilient to attack or unauthorised change. Usually the ledger’s cryptography builds up over time so it becomes more and more difficult to hack.

This makes it “immutable”—it is extremely improbable that anyone could go back and subvert the ledger’s history.

“The result can be a more open, transparent and verifiable shared database”, says the report.

Why Use DLT In Public Services?

Citizen services have long been exposed as disconnected and fragmented, where information is lost or not correctly recorded or amended, data sharing between departments is rare and not transparent, and can be prone to security risks as a number of high profile data breaches have highlighted such as Wannacry.

Using Blockchain in public services “has the potential to redefine the relationship between government and the citizen in terms of data sharing, transparency and trust”, the report says.

“DLT makes it possible to register and record, share and transfer value or valuable information in a secure and tamper-proof way, to only the intended recipients. It represents a new opportunity for the creation of natively digital public services.”

Where Can A Distributed Ledger Be Used?

The report discusses a number of areas where the usage of DLT can add value for public sector organisations and processes in Scotland.

1. Streamlined collaboration: DLT can be applied to scenarios where multiple organisations must collaborate to achieve outcomes, but each may only act in a way that all other consent to.
2. Security and Resilience: DLTs can be more “cyber-resilient” as they deal with encryption and integrity “by default”. In addition, their security compounds over time—data can be encrypted and permissioned, and then distributed to make it more robust against subversion or external attack.
3. Privacy and Confidentiality: DLTs reduce the need to retain multiple copies of sensitive information amongst co-operating parties, so reducing risks of that information being compromised.
4. Compliance and Oversight: DLT can be used to track the provenance of all data and interactions involved in completing a process, particularly in demonstrating a “chain of custody” in a regulated process.
5. Paperless reconciliation: An obvious application of DLT is in banking, where each institution maintains its accounts and their balances. A shared distributed ledger makes reconciliation unnecessary, eliminating an administrative step and improving efficiency.
6. Registration and Recording: DLTs can produce a permanent and irrefutable digital record of what happened.

Scotland’s Place In The Worldwide Blockchain Community

Scotland has a thriving blockchain community with several startups and SMEs already working on commercial DLT applications.

The academic sector has strong cryptography representation with specific focus in Edinburgh, Napier and Stirling Universities. Edinburgh’s position as a financial centre drove many to take an early interest in Bitcoin and other cryptocurrencies.

This has helped establish the growing community of computing scientists, cryptographer mathematicians, and cyber professionals with skills which can be brought to bear on DLT engineering and in applying these tools to vertical industries.

Stewart Pavitt, chief product officer at wallet.services, commented, “Scotland’s knowledge and expertise is well placed to help develop and implement blockchain solutions needed across these industries.  Blockchain offers a new tool for solutions that up till now have been impossible to digitally implement due to the requirements placed on organisations to share infrastructure, technology and administration.”