Blockchain 2.0: How it could overhaul the fabric of democracy and identity

27 Apr 2017

Person voting electronically. Image: Rob Crandall/Shutterstock

Those following the latest technology in fintech will no doubt have heard about blockchain, but its reach could extend to everything we know.

Bitcoin has been heralded as one of the greatest revolutions in tech and finance over the past decade, but it is arguably the blockchain technology behind it that will have the biggest impact.

While previous articles we have featured go more in-depth into ‘Blockchain 101’, simply put, the technology uses a distributed ledger system that can track any transaction – or action online – down to a millisecond.

Developed by a mysterious founder, bitcoin technology was designed to allow people to trade in cryptocurrency, with complete accuracy and transparency for both parties, secure enough to prevent any tampering.

Think of the possibilities a trackable, tamper-proof ledger system can have, not just for the financial sector, but business as a whole.

To take one example, we’ve heard this year about how the legal sector could use blockchain for mediation with decentralised, transparent contracts.

Likewise, the simplest and most feasible adaptation of blockchain in business can be seen on the high seas, with IBM and Maersk Line revealing that the former is to use blockchain to help the latter track shipping containers across the globe.

However, not all blockchain technologies need to be about making money. A recent report issued by the European Commission discussed the possible ways it could change people’s lives.

Blockchain electronic voting

While many democratic nations still prefer a traditional paper ballot system to an electronic voting system over fears that digital votes could be tampered with, new technologies are starting to change that opinion.

One suggestion is blockchain enabled e-voting (BEV), which would take control from a central authority and put it back in the hands of the voter.

As a person’s vote would be timestamped with details of their last vote thanks to the encrypted algorithm, an illegitimate one would be spotted more easily by a digital system, or even those within digital-savvy communities.

Despite still being a fledgling technology, BEV has already begun working on the local scale of politics within Europe, such as the internal elections of political parties in Denmark.

But perhaps at this early stage, its actual use in governmental elections at a national level will remain limited, depending on “the extent to which it can reflect the values and structure of society, politics and democracy”, according to the EU.

There is even the suggestion that blockchain could one day see us ditch the current model of democracy in favour of ‘liquid democracy’.

Following a direct democracy system, a liquid democracy would allow people to vote online for whatever proposal is put forward by the government and, using blockchain, it could be responded to rapidly.

Using a delegate system, a person’s vote can even be transferred to someone they feel follows a similar mindset, be that a friend or a state politician.

Blockchaining the welfare state

On the subject of governance, blockchain has also been offered as an answer to sustaining the public service, particularly with transparency of where people’s taxes are going.

One governmental concept could allow blockchain to form the basis for a secure method of distributing social welfare or other state payments, without the need for divisions running expensive and time-consuming fraud investigations.

Irish start-up Aid:Tech is one noticeable example that is working with Serbia to do just that, along with its efforts to use blockchain to create a transparent system for aid to be evenly distributed in countries such as Syria.

Bank of Ireland’s innovation manager, Stephen Moran, is certainly of the opinion that blockchain in the area of identity offers greater revolutionary change than BEV.

“By identity, that can cover everything from educational records, but can also cover the idea of a national identity card,” he said in conversation with

“So, if you wanted, you could have a future national identity card in which you had private and public keys, where the power of identity resides with the individual.

“It is clear, transparent and not in the hands of any other individual or government [which] I think is the greatest use case.”

Not the future, but now

The adoption of such cards has been controversial in the past but gradually, more and more countries – at least within the EU – have begun using them.

One example is the small Baltic state of Estonia that has given a whole new meaning to a digital-first society.

Having already famously offered electronic residency for foreigners to promote greater business in the country, its government has been working with blockchain for a few years now on its own identity card.

Through the use of blockchain, citizens have not only been able to vote, but also conduct other activities such as order medical prescriptions and pay taxes, along with 3,000 digital services.

Meanwhile in Africa, several countries have begun using blockchain to keep track of land registry in a sector where corruption has shown itself to be rampant.

It is no wonder that with this already underway, more than a dozen companies are now working in this specific area of blockchain.

Smart vouchers

The smart vouchers used to distribute aid by Aid:Tech. Image: Aid:Tech/YouTube

Goodbye patent trolls

Equally – if not more so – an area ripe for blockchain to become significantly important is law and smart contracts.

With blockchain’s speed and transparency seen as a key factor in its uptake in finance, transactions could be executed automatically once certain conditions are met.

This could be beneficial in the patent industry where ‘patent trolls’ run riot and choke the legal system with claims over ownership of an idea.

In particular, the use of ‘hashing’ in blockchain would allow a person filing a patent to add a distinct and unbreakable fingerprint to their concept.

When recorded on the blockchain, no one else could claim ownership if that hash shows that the defendant in a patent troll case is its sole founder.

Somewhat optimistically, the EU thinks that such a practice means “competitors are encouraged to develop alternatives and improvements, which could break monopolies after the expiry of the patent, while inspiring innovations in other areas not covered by the patent”.

Even speaking generally about smart contracts, Moran believes it could offer potential for us to be paid by the millisecond, rather than by hour or month.

Rise of the AI organisations

But perhaps the wildest idea within blockchain – and one that is somewhat connected to governance – is that, through an amalgamation of smart contracts, it could effectively run itself as an artificially intelligent being.

Known as decentralised autonomous organisations (DAOs), these are, in effect, entities that can run a business or any operation autonomously, allocating tasks or distributing micropayments instantly to users.

Take the example given by the EU that describes a future possibility: “A DAO could own a self-driving car that acts as a taxi 24 hours a day. This would generate income that it would use to pay for its own fuel, repairs and insurance, and save money to replace the vehicle at the end of its useful life.”

Connected people

Concept image of a DAO. Image: WHYFRAME/Shutterstock

The silent revolution

An example similar to the DAO already exists, in a crowdsourced blockchain online organisation run entirely on the open source platform Ethereum.

Last year, through the sheer will of its users, it was able to crowdfund the largest sum ever – $100m – through smart contracts alone.

If it appears confusing and unyielding, then you are not alone.

However, as was simply summed up by writer Leda Glyptis, blockchain is a force to be reckoned with, but it will be so subtle that you won’t even notice.

“The blockchain will not make you a better person,” she said.

“It will make your exchanges faster and safer. It will make your processes slicker and your infrastructure leaner.”

Person voting electronically. Image: Rob Crandall/Shutterstock

Colm Gorey was a senior journalist with Silicon Republic