At this week’s Blockchain Live conference in London there was a lot of buzz and excitement around the implications of blockchain, and indeed other distributed ledger technologies, for consumers, businesses and public services. In an age of anxiety about cyber security and online privacy blockchain appears to offer new solutions.
‘Erm, but what is blockchain?’, I hear you ask. It is a shared distributed ledger (like a digital record book) that records transactions and tracks assets across a network. It is called blockchain because it stores data in blocks that are linked together to form a chain. Each block confirms when a transaction took place and contains a hash that forms a unique identifier linking the blocks together.
One of the first examples of an innovation running on blockchain is bitcoin, the digital currency created in 2009 by the mysterious Satoshi Nakamoto. Unlike the pound or the euro, bitcoins are not issued by a central bank, but are ‘mined’ by people running computers around the world using software that solves mathematical problems. Bitcoin is not monitored by a central monetary authority but rather its supply and verification is managed by a peer to peer network made up of the computers of those who use it.
So, why the excitement? Blockchain technologies can provide a faster way of moving assets around the world, simply because they do not rely on verification by a bank or other intermediary. Think of how long it takes to cash a cheque or transfer money overseas. They also provide enhanced security. This is because members of the network can be required to verify their identities to participate and because the lack of a central institution hosting all the data means the network is less vulnerable to cyber attacks. Transactions on a blockchain are furthermore immutable: because each block is part of a chain linked to other blocks they cannot be tampered with or altered. This should help in the fight against fraud and money laundering, as well as helping law enforcement and auditors track transactions.
What are the implications of distributed ledger technologies such as blockchain for policing and indeed public services more widely? The first potential benefit is that it could give citizens much greater control of their personal data, enabling more personalised services. So, for example, patients could control access to their medical records on a blockchain, which could be updated in real time by both patients and doctors. This could also unlock innovation by giving patients the ability to provide some of their data to third parties to carry out research or design new services. In policing, crime reports could be made on a distributed ledger, with victims being updated automatically every time there was a development in the case, rather than police officers or prosecutors having to remember to phone the victim.
The second benefit could be interoperability. As anyone in policing will attest, the challenges facing services are increasingly complex and require multiple agencies to work together to solve problems, intervene early and provide better services. One of the biggest barriers to collaboration is the reluctance or inability of agencies to share information and, while progress has been made, few would deny that sharing data between police forces and between the police and other agencies is a continuing challenge. Blockchain may help by allowing multiple users access to the same data with varying levels of permission. For example, as we recently explored in our Reforming Justice for a Digital Age report with CGI, digital case files are now being rolled out across the criminal justice system, allowing multiple agencies access to the same files in digital form. On a blockchain such data may be updated more quickly and wider access permitted while at the same time being part of a secure network.
The third benefit is efficiency. In 2010, Her Majesty’s Inspectorate of Constabulary (HMIC) found that during the prosecution of a standard domestic burglary there were 70 ‘rubbing points’ where the progress of a case was dependent upon one justice agency securing information from another. In addition, as part of this process there were at least seven occasions where data needed to be transferred between agencies. This level of complexity presents multiple moments for mistakes to be made and for duplication to occur. Blockchain technology could enable automatic updates and design in rules to prevent error.
Of course, we should not breathlessly embrace blockchain as the solution to all our problems. Public service data will still need to be extracted from legacy systems. While the transparency of the ledger means that law enforcement can follow the digital trail in blockchain transactions, encryption means that the identities of criminals remain hidden. The age old trade off between the right to privacy and the demands of public safety remains.
Finally, while a decentralised internet unmediated by corporate behemoths like Facebook and Google is attractive from the point view of privacy and the democratisation of power (a fragmented internet is hard to censor or control) it does pose a major challenge for law enforcement. Facebook has a relationship with state agencies and employs an army of moderators to remove and report criminal content. A more decentralised internet based on distributed technologies like blockchain is likely to make it harder to remove indecent images of children or content promoting terrorism from the internet. The government, the police, the public and the tech sector should rapidly discuss the implications.