The adoption of blockchain technologies by government agencies is an opportunity to enhance decentralization, integrity and transparency of data, increase efficiency and reduce operating costs.

Blockchain Benefits

Decentralization and data integrity

The task of the computer nodes supported by the blockchain is the synchronous operation and validation of stream records to coordinate the state of the database while maintaining the uniqueness of the version of information stored in it.
Different governing bodies can act as validators, which will significantly reduce the likelihood of data forgery and fraud. Also, depending on the system settings, non-governmental organizations, universities and citizens can act as nodes, which will lead to an even higher degree of decentralization. Such validation mechanisms will prevent common types of data entry errors.

Transparency

Using databases on the blockchain will allow you to store and protect private records so that it will be much more difficult to use such information, as well as manipulate and hide it from the public. With the help of blockchain technologies, it is possible to distribute the process of checking and storing data effectively implementing decentralization of power. This technology eliminates the need for trust between government and civilians.

Decentralized blockchains can provide constant access to all documentation of law enforcement officials, which facilitates the work of regulatory authorities in detecting corruption offenses or abuse of power, reducing or eliminating the need for intermediaries related to data exchange and financial transactions. This will complicate the process of entanglement of illegal financial activities for government officials.

Increased efficiency

The wise use of taxpayer funds by the state is a key factor in maximizing the efficiency of government institutions, which implies the wise use of budget funds.
Improving efficiency and lowering costs will increase the ranking of governing bodies, and by reducing operating costs, the government will be able to invest more in the development of other public sectors, such as education, security and healthcare.

Tax collection can also be optimized through the use of the blockchain: by storing all payment records and processing returns in private blockchains, tax collection agencies can provide increased security to protect individual taxpayers from fraud or identity theft.

Disadvantages and limitations of blockchain technology

The problem area for the application of these technologies is administrative management: the main plus is the invariance of data - this is also the main weak point in some cases, since this property makes it necessary to have the correct sequence of all records immediately before they are checked.

Confidentiality of data is also a drawback for countries with the right to rehabilitation, as this may go against the existing process of processing personal documents. The immutability of the data may be contrary to existing law or judicial precedent.
Potential solutions to this problem may include the use of a data burning function or various cryptography techniques.

Blockchain in Europe

One of the successful countries in Europe where e-government is functioning effectively is Estonia. After the collapse of the USSR, Estonia did not have sufficient funds to develop public services at the level of Western European countries. Using the Internet and digital technology has helped cut costs. About 60 million US dollars are spent annually on information technology in Estonia, which is several times less than in other countries.

For the functioning of e-government in Estonia, each resident was assigned an ID number. It is used for
authorization on the websites of banks, hospitals, state organizations. In total, you can use about four thousand types of services. Since 2000, all government organizations accept electronic signatures on a par with conventional ones.
In the field of software development, preference is given to local companies rather than foreign ones.

A lot of attention is paid to the personal data protection system. There is a data protection inspection which
is a division of the Ministry of Justice. They constantly attract foreign citizens to their services, issuing IDs, which gives an additional inflow of capital.

According to the Estonian government, these measures should bring the country to a new level of development and give impetus to the development of the economy as a whole.

Blockchain and the fight against corruption

The possibility of changing public records through the illegal transfer of funds is a problem leading to corruption. Its solution may be blockchain technology, which, by the way, has already been successfully applied in Georgia. On the one hand, the country is reliably protected from unauthorized access, and on the other, anyone can view all these records.

Corruption in the tax sphere, in turn, also has unthinkable proportions. All this is achieved through built-in opacity and uncontrollability of the entire system.
It is necessary to organize a system of procurement, tenders and competitions based on the blockchain. The main methods of ensuring corruption will completely disappear from it - those same opacity and uncontrollability. A distributed registry is able to demonstrate to any person the conduct of any process. If any transaction on a conditional tender passes through an immutable registry, all rollbacks become obvious. The absence of a supervisory authority in combination with the full availability of the database is the main condition.

Conclusion

Despite potential shortcomings, there are several possible applications for the blockchain in the framework of simplifying the administrative functions of the state. The introduction of blockchain technologies at the state level will increase transparency and optimize the tax collection process. Distributed networks will help government organizations work more efficiently, which in turn will affect the trust of citizens.