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Beyond Bitcoin

- Enabling Smart Government Using theBitcoin Blockchain

Svein Ølnes, Western Norway Research Institute

eGov 2016, 7. Sept. 2016

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Content

Research objectives and framework

Method

What is Bitcoin?

Bitcoin as an information infrastructure

Use case: Academic certificates stored on the blockchain

Conclusions and further research

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Research objectives

1. To give an overview of the Bitcoin literature Bitcoin/blockchain literature in general Bitcoin/blockchain literature in e-Government in particular

2. To study the potential for using Bitcoin technology in public sector services By comparing it to the characteristics of an information infrastructure By studying a specific use case

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Research framework

Information infrastructure theory Comparing Bitcoin to specific characteristics of an II

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Method

1. Comprehensive literature study

2. Case study

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Literature overview – Bitcoin publications in general

Year No. of publications2008 1*2009 02010 12011 82012 212013 632014 2082015 325

*Satoshi Nakamoto’s original white paper

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Literature overview – Bitcoin publications in the eGov field

Category EGRL 11.5 Google Scholar Web ofScience

Bitcoin AcademicPubl.

Searchphrase

«bitcoin» or «blockchain»

«bitcoin/blockchain e-Government»

Same as Google Scholar

No search criteriaAll publications

Economy 0 0 0 244

Technology 0 0 0 241

Regulation 0 0 0 107

Other 0 0 0 35

Irrelevant - - - -

Total 0 0 0 627

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What is Bitcoin?

1. A crypto currency A peer-to-peer electronic cash system

2. An infrastructure An open, distributed ledger on the Internet (the blockchain)

Bitcoin is proof of ownership of an asset, physical or digital, without the need of a third-party

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Bitcoin development

Proposed in a white paper by Satoshi Nakamoto in Oct. 2008

The Bitcoin system was started 3rd of Jan. 2009

Has been running for more than seven years without any serious errors

A platform for permissionless innovation, above all in financial services, but also for use in other sectors

Based on open source and open standards Bitcoin code published on GitHub

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Bitcoin key characteristics Distributed system (peer-to-peer)

No central authorities (no central bank)

Consensus-driven

Secure transactions without third-parties

Immutable

Deterministic money supply 21 million bitcoin in total 12,5 new bitcoin mined every 10 minutes Halving of new bitcoin mined every four years (the last one in July 2016)

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Bitcoin key contributions

A practical solution to the Byzantine Generals’ problem first formulated by Lamport et al. (1982) computer systems’ ability to handle conflicting information how to establish trust in a distributed system (without a third-party)

An open platform for financial innovation But also an open platform for innovation in «trustless» systems

A fully functional digital cash system

Today perhaps the main driving force in cryptograhic research

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Bitcoin building blocks

Open source software

Digital signatures Public key cryptography (but not a PKI! There are no certificates) Hash functions

Consensus based trust Network of nodes reach consensus based on rules laid out in the software

Secured through Proof of work Massive resources needed to add new blocks to the chain But everybody can read the content on the blockchain

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Bitcoin as an information infrastructure*

Property Information Infrastructure Bitcoin as an II

Shared Universally across multiple IT capabil. Yes

Open Yes, allowing unlimited connections to user communities and new capabil.

Yes

Heterogenous Increasingly, both techn. and socially Yes (althoug early)

Evolving Yes, unlimited by time or user commun. Bears the signs of unltd. evolvement

Organizing principles Recursive composition Yes/No – only one referenceBitcoin impl.

Control Distributed and dynamically negotiated Distr. and dynamically neg. (by consensus and «voting»)

Information infrastructure (II): «A shared, open and unbounded, heterogeneous, and evolving socio-technical system consisting of a set of IT capabilities and their user, operations, and design communities” (Hanseth & Lyytinen, 2010)

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Case study: Certificates on the Bitcoin blockchain

Certificate from university courses (or degrees) put on the Bitcoinblockchain

Simple and cost effective solution

Ubiquitous access to verification of certificates

(MIT Media Lab have expanded on the idea and provided a set of toolsto ease the management of certificates on the blockchain)

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Case study: University of Nicosia’s use ofBitcoin blockchain for storing certificates1. Prerequisites:

No other services or products than the Bitcoin blockchain Authntication of certificates without contacting Univ. of Nicosia Should be possible to perform the authentication even if Univ. of Nicosia

ceases to exist in today’s form (merger, shut down etc.)

2. Storing the index document on the blockchain

3. Verification process Verification of the index document itself (retrieved from the web) Verification of the certificate(s)

MIT Media Lab has also done work on this Open badge + Bitcoin blockchain tools for storing and verifying certificates

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Case study: certifiates on the blockchain

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Case study: certifiates on the blockchain

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Case study: certifiates on the blockchain

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eGovernment blockchain initiatives

Sweden: Planning to place real estate transactions on the blockchain

Georgia: Blockchain project for land registries; through the National Agency of Public Registry

UK: Exploring the use of blockchain technology to manage distribution of grants.

Ghana: Blockchain to record property ownership.

Singapore: Prevent traders from defrauding banks (hashed invoices stored on blockchain and shared among banks)

Delaware: Moving state archival records to an open ledgerOpen ledger for private shareholders to keep track of their rights

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Conclusions

The Bitcoin technology is absent from eGov literature

Bitcoin as an information infrastructure has a great potential for innovative use also in public sector, as the use case indicates

Important research questions: how can Bitcoin help innovation in public sector? how should the currency bitcoin and the infrastructure Bitcoin be handled? Bitcoin in public sector on the blockchain, sidechain or altchain? Important factors determining adoption of this new technology? Installed base as a barrier to adoption of the technology

Many similarities with the development of the Internet and web 25 years ago Can Bitcoin/blockchain help re-establish the decentralized Internet?

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Thank you for your attention!

E-mail: sol@vestforsk.noThis presentation: http://bit.ly/beyond_bitcoin

Bitcoin address:

1sveinoFzUtMQ5wnnxMoHX9vb42mvPsWN