The prospect of digital currency and cheaper transactions have excited the private sector for blockchain, but inside government there will be other uses of the emerging technology.
Australia is already a leading player in the field, with the appointment of Standards Australia as the Secretariat of the International Technical Committee for the development of blockchain standards by the International Organisation for Standardisation (ISO), and the recently unveiled blockchain implementation plan of the ASX.
But the public sector still needs some carousing to go beyond the existing implications, particularly where government has a regulatory role or monopoly.“Departments will have significantly reduced friction in the processes of information sharing and government transactions.”
The launch of CSIRO’s digital research and innovation unit, Data61, the largest such group in Australia, is aiming to unlock the potential of distributed ledger technology. Research is delving into the different applications of the technology, far beyond that of bitcoin, to build more efficient and trustworthy public and private ecosystems.
Rob Hanson, senior research consultant at Data61 recognises Australia’s critical position in the development of this technology and how the preliminary uses differ from initial expectations.
“We are currently in the midst of a Cambrian explosion of innovation and at Data61 we’re working alongside global leaders in this space to understand the opportunities, production functionality and security risks that come with the implementation distributed ledger technology.
“There are almost endless potential uses for this technology and the benefits will go far beyond lower costs for financial transactions.”
Preliminary findings suggest some of the first uses within the public sector, will be non-financial, focusing on creating permanent records of transactions for information assets such as land titles, all types of registrations and licenses, while significantly improving efficiencies and reducing cost.
“It is likely blockchain will enter the back-end of business information management systems, quickly disappearing from public view but all the while creating revolutionary changes to institutional interactions. Vendors and government departments will have significantly reduced friction in the processes of information sharing and government transactions,” says Hanson.
A major hurdle for the implementation of distributed ledger technology in government is the level of comfort the sector has in the novelty of the new functionality provided by blockchain to by businesses, the public sector and consumers. Hanson warns that processes and techniques need to be established in order to satisfactorily handle toxic data stored on immutable ledgers, and deal with their ever increasing length.
“The world’s eyes will be on the launch of the distributed ledger technology back-end infrastructure in the ASX’s new technology platform that will manage the transactions across their $12 trillion dollar market. Its much anticipated success will most likely mark a turning point for wider acceptance, trust and confidence in the technology by the private and public sector alike.
“All new functionality runs the danger of being implemented prior to any risks and security issues being appropriately dealt with. Lessons need to be taken from exemplars like the ASX, the field is so new that for most organisations mistakes will just be part of the learning curve. We need to reimagine the risks of the future from a blank slate, thinking beyond what we recognise as risks today.”
Nick Giurietto, chief executive of the Australian Digital Currency & Commerce Association applauds Australia’s strong regulatory environment, saying it will contribute to the successful adoption of distributed ledger technology.
“The advantage of implementing distributed ledger technology in Australia is the secure regulatory environment that already exists. However, the public sector will face a challenge; historically government technology is developed within a silo for a single purpose, with little connection to the outside world or thought for wider business applications.
“Processes, functionality and risk analysis that has a wider application outside of the public sector must all be considered at this critical time of development.”
The opportunities, impacts and threats of distributed ledger technology will be discussed by Rob Hanson and Nick Giurietto at GovInnovate Summit in Canberra on November 15. Giurietto will also host Blockchain Bootcamp — The coming transformation of government service delivery, alongside Bit Trade Australia co-founder Jonathon Miller on November 16.