The government’s first use of blockchain technology is likely to be for monitoring the distribution of grants, Cabinet Office minister Matt Hancock has suggested.
In 2014, the government gave the Alan Turing Institute £10m to investigate digital currencies and distributed ledger technologies. A distributed ledger is an asset database that can be shared across several networks, sites or institutions. All participants have their own copy of the ledger and changes made in one site are reflected across all copies.
Speaking at a brainstorming event on blockchain in government yesterday, Hancock said that officials believe blockchain would be well suited to monitoring grant distribution.
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He said: “Monitoring and controlling the use of grants is incredibly complex.
“A blockchain, accessible to all the parties involved, might be a better way of solving that problem.”
Hancock said that the Bitcoin cryptocurrency had proved that distributed ledgers could be used to track currency as it passes from entity to entity.
He said: “Think about the Student Loans Company tracking money all the way from Treasury to a student’s bank account.
“Or the Department for International Development tracking money all the way to the aid organisation spending the money in country.”
A report published earlier this year by Sir Mark Walport, chief scientific adviser to the government, said blockchain technology had the potential “to help governments to collect taxes, deliver benefits, issue passports, record land registries, assure the supply chain of goods and generally ensure the integrity of government records and services".
However, Hancock said that blockchain technology was unlikely to work in every context within government.
He warned: “When a trusted body already exists, for example, that can hold canonical data, that’s often the best solution.
“But the fact that data held in the blockchain comes with its own history, and that history is a fundamental part of proving its integrity, this fact is enormously powerful.”
Yesterday’s event to brainstorm uses of blockchain within government was run by Digital Catapault and Imperial College’s Centre for Cryptocurrency Research and Engineering.