Blockchain technology is the subject of intense and growing attention among governments, technology developers, and private investors. The most prominent contemporary applications of blockchain technology are cryptocurrencies such as bitcoin. The research and deployment of other practical applications remains limited, however.
This paper uses bitcoin as an example to illustrate the basic underlying principles and properties that allow blockchains to function—the creation, distribution, and protection of distributed ledgers as well as the potential to ensure the integrity of sensitive data records. It then discusses the integration of private blockchains into governmental services, with a special emphasis on the Estonian case.
The paper argues that the Estonian government’s use of blockchains to support public services demonstrates the technology’s many advantages. These advantages range from higher transparency to process efficiency to increased resilience against various cyberattacks. The paper also discusses the technology’s potential application in other contexts and countries where blockchains are attracting increasing government attention and for which the Estonian experience offers potentially useful lessons.
Ivan Martinovic is Associate Professor of Computer Science (Department of Computer Science), Lucas Kello is Senior Lecturer in International Relations and Director of the Centre for Technology and Global Affairs (Department of Politics and International Relations), Ivo Sluganovic is a DPhil Candidate in Computer Science (Department of Computer Science).
Download Working Paper No.7