What's wrong with government blockchain?

How governments of different countries use blockchain, what problems are solved with its help, and why the state distributed registry is not decentralized.

Blockchain solves the most important task of democratic states: preserving information unchanged in a society where trust (or blind obedience) to power is not the basis of its functioning.

The only correct solution to the cryptographic problem about Byzantine generals has become the basis for creating a virtual distributed registry, so it is used by countries far from autocracy. Blockchain allows the government apparatus to be transparent, and society to control its actions.

A number of countries can already share the experience of its successful implementation:

• Estonia;
  
• Lithuania;
  
• Georgia;
  
• USA.

They use a distributed data registry in different areas: public insurance, medicine, education, real estate registers, databases of law enforcement offenders.

Estonia is a pioneer on the blockchain path

The state decentralized electronic database was launched in Estonia back in 2002, when there was no talk of either the blockchain or cryptocurrencies. It was called X-Road and was used in law enforcement and legislative bodies. The data was stored on mainframes controlled by the authorities. But in 2007, the system was subjected to a cyber attack by Russian hackers and demonstrated its vulnerability.

Since 2008, the Estonian government has been using storage repositories on KSI blockchain platform. Its developers guarantee the preservation of confidential data in the event of massive hacker attacks.

But all budgetary institutions are still connected to a single X-Road system. It connects the servers of government organizations and service centers of the country with each other.

Blockchain is used in the following sectors:

• state compulsory insurance;
  
• healthcare (maintenance and storage of medical cards);
  
• taxation and mandatory contributions to the budget;
  
• pension payments;
  
• notary office (registration births, marriages and deaths);
  
• electronic voting.

In addition, the capabilities of the KSI platform are used by private businesses: banks, trading exchanges, IT companies..

Georgia is a leader in the digitalization of the public sector

Georgia is not the first, but so far the most successful platform for the digitalization of government processes. Open registries on the blockchain are the most striking detail of this trend.

The “immutable ledger” technology is used in almost all spheres of life of Georgian citizens:

• notary services;
  
• education;
  
• cadastral data;
  
• macro- and micro-financial lending;
  
• purchase and registration of real estate and cars;
  
• fines for violating traffic rules;
  
• calculation of taxes and obligatory payments (including VAT refund);
  
• receipt of social assistance from the state;
  
• real estate activities;
  
• payment of utilities;
  
• crossing borders and obtaining visas;
  
• medical insurance.

The Public Notary blockchain platform allows you to make records of births, marriages, deaths and obtain the necessary certificates in any region of the country. Data on property rights, judicial restrictions and even alimony arrears are stored here.

Thanks to the use of this technology, the so-called “Single Window” has been operating successfully in Georgia for a long time. By contacting the House of Justice, any citizen in a matter of minutes can receive from the system operator officially certified data regarding his social status: from a copy of a birth certificate to a certificate of no criminal record.

The Georgian National Blockchain Agency (GNBA) is involved in the implementation of blockchain in the sphere of private business. The organization helps entrepreneurs and companies establish working models using a distributed registry.

GNBA works in conjunction with regulators and helps develop a system of laws that relate to cryptocurrencies, digital assets and tokenization of property rights.

Ukraine - a test of the pen

Unfortunately, Ukraine cannot yet boast of great achievements towards the “blockchaining” of state institutions. This is explained by the high level of government corruption, which does not strive for transparency and is happy to manipulate data in the public sphere.

The Ministry of Digital Transformation makes loud statements about supporting developers on the blockchain and that it will contribute to the introduction of distributed registries in all spheres of public life. But so far, except for the “Diya” application, not a single working project has been created.

We can only note the E-auction 3.0 operating on the blockchain, which belongs to the Derzhmain Foundation. It is sold through it collateral and lease rights to state assets are issued. The platform was launched in 2015, and its organizer and inspirer was the former Minister of Justice of Georgia, Georgy Vashadze.

Attempts are also being made to save data from the State GeoCadastre of Ukraine in the form of a distributed registry in order to facilitate the registration of ownership of land plots. But after the adoption of the Law on the Land Market, which led to a surge in raider activity, it became practically impossible to obtain information from the cadastre. impossible.

Ukraine confirms the words of Vitaly Buterin: “Where there is a blockchain, there is no corruption.”

What is wrong with the state blockchain?

Blockchain is the best possible alternative for protecting information from cyber attacks, because no attacker can hack the entire network. There will always be intact nodes that store and verify the integrity of data.

State ones. distributed registries have a built-in function of prohibiting overwriting, and all data included in them remains unchanged.

The problem is that the information is stored on state servers and, therefore, is under the centralized control of the authorities. Ordinary citizens cannot participate in storing and verifying the correctness of the data entered into the electronic journal.

Therefore, we believe that blockchain under the control of the authorities is inherently not much different from national cryptocurrencies (CBDC). It is not a democratic system without a control center, as imagined by the author of the Bitcoin White Paper - Satoshi Nakamoto.

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