The US Federal Government blockchain technology market is forecast to triple in the period 2018-2023, growing at CAGR of about 25%. The US Government will not stay aside and watch as the technology essential for all critical infrastructure segments finds its way in the world. US Government agencies are eager to better evaluate and adopt distributed ledger technologies (like blockchain) that use encryption and coding to improve transparency, efficiency and trust in information sharing. Blockchain use cases that agencies submit for exploration touch many parts and processes of the government organization, including but not limited to:
Federal assistance and foreign aid delivery
Federal personnel workforce data
Government-issued credentials like visas, passports, SSN and birth certificates
Impact of quantum computing on blockchains
IT asset and supply chain management
Patents, Trademarks Copyrights, Royalties
Weaponization of blockchain
As rogue regimes, like Iran and Venezuela, are increasingly considering national cryptocurrencies as a way to evade sanctions, the US government will undoubtedly act by funding cover programs within the Intelligence Community to disrupt adversary blockchain networks. The US lead in quantum computing technology is a powerful deterrent factor and a strategic advantage in blockchain weaponization race.
Blockchain technology eases up integration of microservices, serverless and cloud with the legacy systems and gradual replacement of old IT systems.
The U.S. Government market for blockchain technology is estimated to grow from $300 Million in 2018 to $2 Billion in 2023.
Speaking at the ACT-IAC Blockchain Forum in Washington, Jose Arrieta, the Department of Health and Human Services’ associate deputy assistant secretary for acquisition, said blockchain has given his agency the flexibility it needs without being hamstrung by legacy IT systems:
“What interests me about blockchain isn’t really what it does, it’s the agility that it gives you, meaning I can layer it over my existing systems and I can use it as a repository to create a data layer, and I can build microservices to add value off the data layer,” Arrieta said. “Blockchain as a technology gives me that flexibility to interact with the old, and leverage the old for what it’s worth, but be really flexible for the new.”
The report emphasizes early adoption of blockchain technology for National Security applications, especially by Intelligence Community, with massive investments in the next few years.
The most likely scenario of blockchain technology deployment by US government agencies and organizations is through cloud infrastructures provided by Amazon, Google, Microsoft and IBM. Small blockchain technology vendors will be able to offer their services to the government market through marketplaces of major cloud infrastructure providers.
The report’s market estimates are based on interviews with federal managers from dozens of unique agencies, analysis of use cases, solutions and limitations at agencies’ level. The report provides detailed year-by-year forecasts:
by blockchain technology, infrastructure & service segments,
by defense, civilian and intelligence agencies,
by mission areas.
The report quantitative estimates cover potential US Federal government blockchain technology use cases (including but not limited to):
1. Transaction validation
2. Software license management
3. Security documentation sharing
4. Identity, credential and access control
5. Authenticate and validate government data
6. Survey data collection processes
7. Supply chain management
8. Museum and library collections management, digital humanities, and archives
9. Authorities to Operate (ATOs)
10. Smart Contracts
11. Small business loan distribution
14. Payments, funds transfers, IAA’s and remittances
15. Regarding domestic assistance, enable coordination between federal and local governments
16. Supply Chain Management and Security
17. Combating pirated agriculture inputs
18. Alleviate impact of foreign currency fluctuations
19. Tax assessment on crypto currency trading
20. Smart contracting and financial transactions
21. Instantaneous payment without having a bank account or a Credit card
22. Using micropayments to incentivize or reward behavioral outcomes
23. Case / evidence management
24. Evolving Interagency Agreements (IAAs) to better meet government’s needs
25. Further accelerate the adoption and impact of cloud technologies for agencies
26. Reimagine federal records management
27. Loan processing
28. Evolving notary public services
29. Property deed records
30. Post Office official identifications
31. Blockchain for micro-SLAs
32. Reducing friction in mission support systems and other shared services. Consider a Payroll and Personnel system that reduces that time to transfer payroll records, smart contracts, and financial management. As the govt. explores the probability of transitioning, in the coming years, to cloud-based Software as a Service for HR/Personnel, FM, Payroll, Contracts, Grants, Travel, what are the opportunities to drive consistency (or, at least, compatibility) as each of the respective LoB begins its blockchain journey.
33. A public-private partnership model for sharing private sector security information to identify potential threats to and to reduce risk to critical infrastructure. The protected critical infrastructure information (PCII) program is in place to protect private sector infrastructure information voluntarily shared with the government for these purposes. Blockchain could be applied as an enhanced security and validation tool to create digital identities that protect this private sector information and maintain privacy.
34. Cross-domaining solutions to ensure security and audit-ability when moving information across automatically across security classifications.
35. Improve Local Level Community Engagement, Access to resources, and oversight. Also to learn how legislation needs to change to take full advantage of this technology. Lastly, to assess the potential/feasibility cryptocurrency has to address the under banked.Improve Local Level Community Engagement, Access to resources, and oversight. Also to learn how legislation needs to change to take full advantage of this technology. Lastly, to assess the potential/feasibility cryptocurrency has to address the under banked.
36. Independently reviewable registration and chain of title could have value for the licensing of spectrum in the way that deeds and titles have experienced value for both traditional state and municipal deed offices and third parties in real property transactions.
37. Reduce the risk of forced labor in labor supply chains. Smart contracts can be used to eliminate the practice of “contract substitution,” to help establish identity to migrant populations that do not have access to official documents, and to bring more transparency to payment records between employees and employers.
38. Create a trackable system for a landmine removal work-order management type system in a post-conflict setting.
39. Driving medical innovation through the development of knowledge and materiel solutions for the acute and early management of combat-related trauma; including point-of-injury, en route, and facility-based care
40. Blockchain as a technology to provide for clear ownership tracking of land parcels.
41. H-Visa information that is used by the Employment Training Administration.
42. Blockchain based network that democratises access to siloed inventory (foreclosure, repossessed inventory) data by enabling sellers (local counties, sheriffs, municipalities, customs) to hold multi-merchant auctioning through a distributed network. Forming an open marketplace, where any online merchant store can join and re-market, auction the same inventory in sync with global network of such intermediary online stores.
43. Reduce the high overhead cost of traditional trade finance solutions through commercial banks to help small businesses export American products overseas. Explore blockchain applications for trade finance insurance and government-backed working capital guarantee products. Coordinate with commercial banks to facilitate integration with their trade finance blockchain solutions as they develop theirs.
Use of blockchain technologies to foster creation of prediction markets (ideas futures) in early pharmaceutical ideas and concepts to speed the development of pharmaceuticals, medical devices, and other therapies to the market. Management of clinical trial protocols, data, and patient databases using blockchain ledgers.
44. Determine the feasibility of using blockchain in a permission-based DLT platform as the foundation for a government-wide software license entitlement exchange as mandated by Federal Information Technology Acquisition Reform Act (FITARA). This would expand on work started by DHS and NIST championing the adoption of ISO-19770 software identity (SWID) tags to enhance cyber security and IT Service Management operations.
45. Pilot program for fresh produce contracts/procurements by school districts with USDA approved vendors to utilize entitlement funds and enhance local procurement volume. Orders, receipts, bills of lading, invoices, approved vendors and products visibility for USDA agencies, state agencies, school districts and vendors to verify compliance with pilot rules, auditability and ensure prompt payment. Currently 2 federal agencies, 8 states, 400+ school districts and 90+ vendors participate in a manual validation and tracking process.
46. Utilize hackathons to discover innovative approaches to BC usage, exploitation.
47. A public blockchain to store encrypted chain of custody records as a way to increase public trust by providing an immutable record that could include hashes of digital files collected in an investigation.
48. Human Capital Employee Digital Record – build out network of partners (gov and industry) and exchange incremental updates between members
49. Tax refunds. Possible reduction of fraud. With tax submission as well.
50. Blockchain technology in existing data acquisition, storage, and retrieval system for traumatic brain injury (TBI) allowing for improved accuracy of individualized patient data which will allow for better prognostic and diagnostic determinations for individual service members who experience TBI.
51. Putting our University engagement program – Diplomacy Lab – on blockchain in order to securely share research products between Department offices and to manage transactions of research assets between university researchers and State entities.
52. If an SEC registrant uses a blockchain to record data the SEC has access to pursuant to its regulatory authority, a proposed use is that the SEC be given access to a œregulatory node on that registrant’s blockchain with permission to read that data in real time.
53. Blockchain’s potential for improving data access and security in consumer affairs.
54. Non-ID response. This challenge occurs when a respondent provide information does not have a pre-provided unique ID. For example, if a individual responding to the decennial census on a generic form from their public library vs. using the one mailed to their house that contains their ID.
55. Legal entity identifier (LEI) management, financial research revolving around public/private blockchains in the US financial system.
56. DHS employs a public-private partnership model for sharing private sector security information to identify potential threats to and to reduce risk to critical infrastructure. The protected critical infrastructure information (PCII) program is in place to protect private sector infrastructure information voluntarily shared with the government for these purposes. Blockchain could be applied as an enhanced security and validation tool to create digital identities that protect this private sector information and maintain privacy.
57. The ability to create and share records using blockchain across agencies.
58. Exploring potential changing from a submission model for data to a data sharing model
59. Permissioned/permission-less blockchains for intragovernmental transactions; smart contracts for federal financial assistance, contracts, etc.
60. Immutable Logging to Ensure Resiliency, Integrity and Independent Validation of IoT Device and Sensor Data
61. Improving International Passenger Processing
62. Streamlining and Enhancing International Trade Documentation Processing
63. Alternatives to Paper Based Official Records to Mitigate Forgery and Counterfeiting
64. Exploring applications to safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities.
65. Reconciling balances and transactions to core finance subsystems
66. Creating balancing journal entries to handle discrepancies
67. Automating pricing reviews based on customer contracts and pre-approved price lists
68. Automating processing of payments and bulk payment files for journal entries to subsystem
69. Releasing reference data and scorecards
70. Data provenance for topics like drone technology, IoT, and the cloud
71. Decentralization of official data storage to increase resilience if data storage facilities are affected by an incident or accident.
72. Non-ID responses to surveys (verifying self-response surveys without sending mailers).
73. Evaluate blockchain technology in terms of its use in ICOs.
74. How to pre-vet data sharing between our agency/bureau (several offices and directorates) and another agency counterpart.
75. Business process and operational efficiency improvements
76. Streamlining and Enhancing International Trade Documentation Processing
77. Mitigating accounts payable risk
78. Regulatory reporting and management
79. Assignment and Ownership Data for Intellectual Property