Crypto is supposed to be exciting, right? Hacking, fraud, overnight billionaires, international fugitives. Sure. But, far from the high drama of crypto finance, governments around the world have been quietly putting blockchains to a more, well, boring use: recordkeeping. Though these experiments lack the drama of crypto finance, they do convert on a promise of blockchain technology: that it creates a durable and transparent distributed record of activity. And they raise the prospect that blockchains may soon be coming not just for your wallet, but most other aspects of your life that the state takes an interest in, like birth, death, marriage, and your very identity. Already, New York City, Chicago’s Cook County, and South Burlington, Vermont, have all explored or deployed programs to put property records on blockchains. California is moving to put car title records on-chain. And if you can’t quite remember whether you really got hitched in Reno last weekend, Washoe County, Nevada, will verify your marriage certificate online using a blockchain. Much of the experimentation is overseas: National governments in Honduras, Ghana, and Georgia, have pursued blockchain based systems for property records, in addition to local projects in places like El Salvador. The biggest plans for putting government on-chain in the U.S., though, may be the ones taking shape in its smallest state. Rhode Island’s Department of Commerce is currently looking for vendors to help it integrate records from agencies across state government into a single blockchain-based system. The hope is that it will make it drastically easier to register a business — a task that currently requires dealing with many different agencies running their own siloed systems. Unlike its more exotic crypto-finance cousins, this blockchain system was designed to be “boring and not risky,” says Commerce Secretary Elizabeth Tanner, who tells DFD that opening a restaurant in Rhode Island currently requires accessing 11 state websites. Tanner determined that the use of a distributed blockchain database was the best way to create a single records system used by multiple agencies. To keep things as boring as humanly possible, she enlisted both Rhode Island’s Division of Motor Vehicles and the state’s certified public accountants for a proof-of-concept pilot program that concluded in June. The accountants were able to get a digital ID card from the DMV, then use the digital credential to prove their identity to the Department of Business Regulation, which in turn issued them a digital copy of their CPA license. One issue with blockchains is that they’re designed to be accessed by several parties — sometimes millions, in the case of public chains — meaning that they’re not a good place to store sensitive information in an unencrypted form. In Rhode Island’s model, most information is stored privately by the government and in users’ digital wallet apps, while the shared blockchain stores public keys — published by the issuing agency — that can be used to verify the authenticity of a user’s digital credentials. Tanner said she became interested in blockchains about five years ago, when she was serving as the director of the Department of Business Regulation. After dealing with the hassles of opening businesses as an attorney in private practice, she wanted to create a more user-friendly experience for Ocean State entrepreneurs. Tanner said she quickly discovered that the systems used by other U.S. states were just as clunky as Rhode Island’s. She looked further afield and became enamored of the high-tech approach of the tiny Baltic nation of Estonia, which first began putting government records on a blockchain in 2012. Tanner credited then-Gov. Gina Raimondo, now the U.S. commerce secretary, with greenlighting the project early on. Of course, there's a reputational issue. Government recordkeeping requires bedrock public trust, and the meltdown in crypto financial markets has created a serious political liability for projects like Tanner's by tainting the underlying technology in the public imagination. “It’s becoming a big problem for me,” Tanner said. “I rarely use the word blockchain anymore.” Tanner said she takes special care in describing the project to legislators, who oversee the project’s funding. In the course of our conversation, Tanner dropped the less polarizing term “DLT,” an abbreviation of “digital ledger technology.” This broader concept refers to a set of methods for distributed record-keeping that includes blockchains as well as other techniques — including some employed by central bank digital currency experiments — that do not require sequential blocks of data. The project puts Rhode Island in league with a constellation of other technophile governments. Tanner said she is keeping tabs on initiatives as far afield as Dubai, Singapore and Lichtenstein. In October, she traveled to Estonia to learn more about systems there, and she keeps in touch with the governments of Aruba, Ontario and British Columbia about their own blockchain forays. For now, the state is fielding an avalanche of questions from potential service providers trying to wrap their heads around the project: Tanner said she hopes to settle on a vendor by the beginning of May. In the meantime, any crypto firms in need of emergency audits know where they can find a group of accountants who have used a blockchain.
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