Australia gets government app with blockchain

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In terms of where we’re going to be able to drive adoption and drive adoption faster, it is in places where there is one or more players who are able to work together to drive a standard, such that the vast majority of transactions can leverage that standard.

Matt Higginson: It’s funny, we often get asked, to paraphrase, “What’s the right path to adoption?” Easy. You’ve got to have an authoritarian government, which can drive adoption because that’s a good thing for the citizens—or at least the government presents it that way. Or you have a very dominant industry player who essentially has a majority say as to how technology gets adopted. Or—and I think this is the most exciting one—there is a compelling business case to truly modernize an industry. Trade finance is an example. Either one of those three will drive adoption.


Brant, your great example of looking at healthcare records. There is no implementation today that would say you’d put the actual healthcare records themselves onto a distributed ledger.
Instead you use it as an index, as metadata for locating your own healthcare records.

So on today’s implementations, there are still many limitations. Are we seeing evolutions? Absolutely. And I would argue that the blockchain protocols that we are seeing and reading about today almost certainly are not going to be the ones we’re going to talk about in two or three years’ time.
This is a technology which is evolving rapidly. And, in fact, many flavors of these protocols are evolving specifically for specific purposes.

Brant Carson: Matt, your answer, I think, was excellent.

Simply put, blockchain is a decentralized network, which is sometimes called “the new Internet”.

However, blockchain has a much greater impact on the world. Let’s look at one of its use cases – cryptocurrency.

It has made financial transactions transparent and got rid of additional bank fees. The crypto coins like Bitcoin and Ethereum have revolutionized the traditional economy.

Later we are going to answer the one most widespread question – how much does it cost to create cryptocurrency, so if you are into it, keep on reading.

Today, blockchain is mostly associated with the crypto market and all the infrastructure related to it: cryptocurrency wallets, trading platforms, live games like CryptoKitties and a bunch of other crypto applications.

But blockchain is not limited to cryptocurrencies. There are many different apps for various industries.

Without them, I think you’re going to struggle to see a use case really get to full adoption.

Simon London: And, again, we go back to this point: the disintermediation of a central authority is not always, or maybe not even in the majority of use cases, what’s creating the value.

Matt Higginson: You’re right. But I want to make one more comment on that, which is this piece, again, around business case.
In our conversations with clients across so many different industries, the biggest hurdle, if you like, within the industry is, “Do we have a compelling business case? Is there financial value? Is there a good return on investment, investing in a technology which is still, to be fair, nascent?”

You may not need disintermediation. You may not even need true democratization of data.

They provide a way of sharing data securely across multiple parties. Things like supply chain or trade finance would be absolutely perfect for that camp.

I do think there are a lot of folks who are saying, “Actually, maybe it’s not about the technology. But maybe there’s something around using blockchain as a banner to modernize an industry, to move an industry forward—and also to bring that industry closer together, to collaborate, to solve perennial problems—even if the eventual technology solution is not necessarily blockchain the way we think about, but it is much more around digitization and collaboration.” I think there are a lot of clients thinking in that space.

Then I think there’s, cynically, a third group, who are looking at blockchain purely for its reputational value and saying, “I want to prove to shareholders and the rest of the world how innovative we are.

“This does not use blockchain technology,” they said.

“The Agency has no plans to introduce blockchain or SmartMoney technology for NDIS payments.”

What about ethics? What about the participants themselves?

A key problem with the Making Money Smarter report is that there’s almost no consideration of ethical issues.

“Given the horrendously complex NDIS environment, defective processes and vulnerable people, there needs to be considerable caution in the application of blockchain technology,” wrote former NDIS Technology Authority chief Marie Johnson in a submission [PDF] to the Parliamentary Joint Standing Committee on the NDIS.

“Blockchain in itself — as with other technology innovations — does not address fundamental design and human rights issues.

So if you have a blockchain, and in the blockchain you’re keeping people’s driver’s license information or voting history, and you put in incorrect data, the data itself isn’t checked in any particular way. All that the blockchain itself does is ensure the integrity of the individuals making the transaction, ensuring that you have the right combination of a public and private key.

Matt Higginson: I would just add a couple of thoughts on that. I agree with you entirely, Brant. I think one of the confusions over having a coin like Bitcoin is this idea that there’s inherent monetary value.

When we think about the original purpose, it was to reward the computers, the people doing the work, actually doing the verification process.

The potential here is that this market will accelerate faster. We’re not waiting for this physical-to-digital transition to occur.

Brant Carson: I think though that it’s quite interesting, if you look at areas like the public sector.
Because in the public sector, in many cases you have relatively static information. You have land-title registry. You have voting records. You have identification. You have travel records, tax records, things that are not actually accumulating that rapidly, but the more that they could be available in a consistent way, it would actually make the operation of government a lot simpler, between departments, if they could be done in a way that people could get comfortable that were quite secure.

In healthcare, again, where a lot of the assets, certainly things like imaging, patient records, they’re all electronic.

And so a coin was important to provide monetary compensation for, in that case, the electricity being used to do the vast amounts of computation.

When we look to implementations of blockchain going forward, very rarely is it necessary to have a coin or some sort of reward. Instead the reward is access to data. If you think about a private blockchain, a closed-loop network of computers, all pursuing the same eventual goal, let’s say it’s in insurance or trade finance, then the reward is being part of that club, that private network.

And, frankly, the reward is also being better able to share data and therefore generate better business processes.

Simon London: One of the things that strikes me is that a lot of people are drawn to Bitcoin because you’re doing away with the central authority, the central banks in that case.

So the evolution of this technology is driving improvements. But, certainly, we are still hearing resistance from certain business-unit leaders, as you’d expect, to this new innovation.

Simon London: Let’s talk a little bit more about the potential use cases. How do you categorize them? One of the pieces of terminology I came across is static registry versus dynamic registry. Tell us a little bit more about the use cases and, in particular, about static versus dynamic.

Brant Carson: When we did our research and looked across industries, we found fundamentally six different categories of business applications [Exhibit 2].

The first was the static registry, which is a distributed database for storing reference data, things like land title, food safety and origin, information that we don’t expect to change readily.

Agency (DTA) joined forces with CSIRO’s Data61 and the Commonwealth Bank to trial blockchain-based smart money for NDIS payments that would magically know whether the expense was legitimate or not.

According to blockchain critic David Gerard — I prefer to think of him as a blockchain realist — Australia’s plan harks back to a similar plan in the UK, first outlined in the 2016 government paper Distributed Ledger Technology: beyond blockchain.

“The meat of the report is a complicated plan to put all UK welfare spending on a single blockchain, purchases only being possible through a DRMed smartphone, for the purposes of fine-grained monitoring of spending habits,” Gerard wrote in his 2017 book, Attack of the 50 Foot Blockchain.

This report was “literally written by the companies and consultants selling blockchain and smart contract hype”, he wrote.

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