Blockchain Attractive to Feds for Reducing Risk

Ryan Granato_resized

By Ryan Granato, analyst

Blockchain has been around for some time, but the United States Government has not yet incorporated it into their portfolio, meaning there is huge opportunity to be had in this emerging market. Originally, blockchain was created as a supporting infrastructure for digital currencies such as bitcoin.

Imagine a dataset that is disseminated and duplicated multiple times across a network. Then imagine that the network, which supports the dissemination of this data, is designed to regularly update the data across all devices. Like the internet, blockchain technology stores identical blocks of data across the network. However, blockchain technology allows for decentralized data. This means that blockchain is immune to single points of failure and cannot be controlled by any single entity, which makes it very attractive to a government customer concerned about the increase in malicious network disruptions.

Technology companies should note that this technology will affect infrastructure, cloud, data management and analytics, in addition to the Internet of Things. With expected government spending on these technologies to reach well into the billions over the next 5 years, the potential for entry is huge. At a recent forum hosted by ACT-IAC, government agencies gathered to formalize the implementation process in a draft playbook and to discuss how blockchain may apply to security missions.

The Blockchain Playbook for the U.S. Federal Government proposes a five-phase process to support agencies in their understanding, procurement and application of blockchain technologies. Think of this playbook as a protocol for the early phases of implementation. Agencies will not want to spend money on a large scale without knowing the requirements within each phase are properly met. It is important to know these phases when trying to sell blockchain technologies to the government because you need to understand where your customer is from a technology evaluation standpoint.

The ACT-IAC playbook walks through all phases of implementation, from assessment to implementation, to ensure that blockchain technologies are being assessed as a viable solution and ensuring that customers are educated on its benefits. Because this is a completely new technology for the government, agencies will need help from industry in evaluating blockchain technology and understanding applicable use cases.

Some good initial use cases for the government would be:

  • A shared ledger that is accessible by all participants in the network and is permissioned, so that only authorized users may see certain information, would make access management for compartmentalized information more efficient and scalable.
  • Identity management, a big concern for government and its multiple endpoints, will be drastically hardened by utilizing distributed ledgers that enhance methods for proving who you are. Put simply, blockchain will create an environment where all users have immutable online reputations. As more content is digitalized and uploaded to the cloud, it has become more accessible. Consequently, there has been a consistent interest in developing new methods for access control such as blockchain and online reputations.
  • File storage and sharing is of utmost importance to any functional organization. Managing data efficiently is a directive nearly all government agencies are pursuing year over year. Blockchain technology enables an internet composed of decentralized websites, consequently speeding up data transfers.
  • Financial services are being revolutionized by solution providers in partnership with banking institutions. These new systems are designed to support transparent “live view” transactions by creating a cross-border trading network. Implementing blockchain into the financial segment would simplify complex processes by utilizing a shared ledger and streamline the process of transferring funds.
  • Asset management on large scale supply chains is vital for any organization. With blockchain it is possible to locate any given SKU along the supply chain, as well as its accompanying documentation derived from a traceable and permanent record. By utilizing IoT and embedding sensors in products, it is possible to greatly reduce mishandling and theft along the supply chain.

The government, though notoriously slow in adopting breakthrough technology, should begin to recognize the benefits of blockchain technology adoption. Agility and risk management are two hot buttons with government customers, making blockchain extremely attractive. Technology companies will want to pay attention to early implementations, as this technology affects not only infrastructure, but will also touch cloud, data management and analytics and IoT. Blockchain has endless potential use cases and government customers will need help from industry in understanding the applications as well as how to best implement it.

Like what you just read? Subscribe to immixGroup’s Government Sales Insider blog for more government IT trends and insight.

Learn more about how immixGroup’s Market Intelligence organization can help your company.

One Response to Blockchain Attractive to Feds for Reducing Risk

  1. Akshay verma says:

    Nice and an informative article!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: