Governments worldwide are looking into effective ways of adopting blockchain technology. What seemed like a futuristic scenario 10 years ago, when Bitcoin was in its infancy, is inching closer to reality. More and more blockchain projects involve governmental approval and funding. Today, we take a closer look at examples of blockchain use by governments as […]
Governments worldwide are looking into effective ways of adopting blockchain technology. What seemed like a futuristic scenario 10 years ago, when Bitcoin was in its infancy, is inching closer to reality.
More and more blockchain projects involve governmental approval and funding. Today, we take a closer look at examples of blockchain use by governments as we try to discover their impact on the world of tomorrow.
We start with ICON, which is one of the biggest and fastest-developing blockchain projects at the moment.
What is ICON?
Unsurprisingly, ICON comes from South Korea, which is one of the few countries that openly advocate for blockchain and cryptocurrency adoption. The South Korean Government backs the ICON project, which is a decentralized network that looks to connect numerous blockchains from everywhere in the world in a bid to reduce the gap between autonomous online communities and other blockchains.
How will ICON work?
Creating a worldwide network that incorporates all the existent and future blockchains is an ambitious goal, to say the least.
ICON wants to achieve this seemingly incommensurable feat through a new technology called “Loopchain.” The developers have been working on it from the project’s early beginnings. All we know about it so far is that it will manage to create a seamless cross-chain communication through real-time smart contracts.
So, adhering to the ICON network will have all the blockchain communities communicating and working through smart contracts.
How South Korea is backing ICON development
ICON is spearheading South Korea’s immersion in blockchain technology. The ICON Foundation and the Government have teamed up in 2016 and together have initiated numerous projects in the Insurance, Healthcare, Customs Service, and Education sectors.
In 2018, the Korea National Information Society Agency (NIA) launched a new program called “Building the Next Generation Election System based on Intelligence Information Technology” under the supervision of the Korea National Election Commission (NEC). The agency chose ICON as their blockchain technology consultant and asked them to provide a blockchain-based voting and ballot counting solution.
At a smaller, local level, ICON is working closely with the Seoul Metropolitan Government. The capital city’s mayor, Park Won-soon has been warming up to the idea of Seoul having its own cryptocurrency. The digital asset would bear the name Seoul Coin or S-Coin, and ICON will be in charge of its development.
The huge Seoul administration machine would use the S-Coin for internal operations in a bid to make them quicker, more effective, and to reduce paper costs.
Another collaboration between ICON and the Seoul Metropolitan Government is a project called “Seoul Blockchain Demonstration Project.” As the head operator of the project, ICON will have to provide innovative public services based on blockchain technology.
Other collaborations between the South Korean Government and ICON include:
- Governmental funding for U-Coin implementation in the national education system in April 2017
- Governmental funding for the Insurance Project from the Ministry of Science, ICT and Future Planning also in April 2017
ICON and Chain Sign
ICON has already begun putting Loopchain to work, and one of its initial projects is a collaboration with Cyberdigm. The latter is a service provider involved in document centralization, collaboration, and knowledge management.
Their partnership produced Chain Sign, which is a blockchain-based contract platform that allows legally binding contracts to be signed digitally. The platform has already hosted operations between prestigious Korean clients, such as the Financial Supervisory Service (FSS) and Samsung Electronics.
Next on our list is Power Ledger – a peer-to-peer energy trading company that was established in 2016, in Australia.
What is Power Ledger?
Power Ledger is a private company that uses both an energy trading platform and a native cryptocurrency to enable the selling and buying of renewable energy through blockchain technology.
The Australia-based company has already extended its operations in and outside its home country, with ongoing projects in Thailand, India, Japan, and the United States.
How does Power Ledger work?
The easiest way to understand how Power ledger allows energy trading via blockchain is to look at one of its recent projects.
In 2020, Power Ledger signed a partnership with BCPG, a Thai renewable energy business, and with the Thai Utility Metropolitan Electricity Authority (MEA). Their collaboration will see the development of “innovative products and services based on blockchain technology in P2P electricity trading and renewable energy credit trading for the Thai market.”
Simply put, this project will enable the trading of rooftop solar power between an international school, apartment complex, shopping center, and dental hospital in Bangkok. The system will generate a maximum capacity of 635 KW, and provide essential benefits for all the parts involved in it, such as:
- The community receives the necessary energy
- Lower energy bills for buyers
- More convenient prices for energy sellers
- A smaller carbon footprint
- The excess energy will be sold to neighboring communities
How the Australian Government is backing Power Ledger
The partnership is part of the Australian Government’s Smart Cities and Suburbs Initiative, and it aims to create a 100% renewable energy residential complex. The project will include a microgrid supply network for water and power and a 670 kWh on-site battery.
Their goal is to identify feasible alternatives of renewable energy that would make living in Western Australia sustainable and cost-effective. The results in terms of energy consumption and power will come from an on-site laboratory that will track the energy traded on the blockchain.
We continue our selection of blockchain government-backed projects with Algorand, which represents the future generation of financial instruments.
What is Algorand?
Algorand is one of the most market-incisive blockchain projects that have received stable government backing so far. It is a unique, open-source blockchain that can never fork, and which supports full, proof-of-stake contracts and permissionless operations.
The brain behind Algorand is Silvio Micali, a Turing Award winner and one of the top-leading researchers in cryptography and information security. The Italian computer scientist is also a professor of computer science in the prestigious MIT’s Department of Electrical Engineering and Computer Science since 1983.
The Marshall Islands have commissioned SFB Technologies to find a blockchain project on which the Micronesian state can develop its own digital currency. After extensive research, the SFB experts settled on Algorand as the protocol for the future Central Bank Digital Currency, also known as the Marshallese Sovereign (SOV).
Algorand stands out in the crowd for its speed, scalability, and high-security. The joint effort should produce a globally available digital currency that will also have a legal tender use.
The Marshall Islands wish to become one of the first countries in the world that embrace a cashless economy. Their CBDC should become a model worth-following for other governments around the world that have been dabbling on this futuristic idea.
How does Algorand work?
Algorand has full governmental backing to produce a powerful digital currency in SOV, which should come with essential features, such as:
- Fully decentralized network – users will engage in transactions without the supervision of a central bank
- Digital wallets for each citizen – every Marshallese may receive a basic public address to store their SOVs
- Complete transparency – a CBDC blockchain-based will enable the easy tracing of every SOV and each transaction to its origin
The Marshall Islands’ CBDC will be on the close watch of larger countries that will want to follow suit and release their own versions of an SOV. In the beginning, the SOV should circulate alongside the USD both nationally and globally.
We kept the best for last, and one of the most active blockchain-based projects out there, Rootstock (RSK) fits that bill completely.
What is Rootstock?
Rootstock (RSK) is what you get if you would be able to combine Bitcoin “DNA” with Ethereum “genes,” and create a completely new platform for digital operations and functionalities.
If that seems hard to imagine, it didn’t seem that difficult for the developers to create. RSK is a platform that connects through sidechain technology to the Bitcoin blockchain, but it is also compatible with Ethereum applications, and it supports smart contracts.
How does RSK work?
Here are some Rootstock features that explain its purpose better:
- It works as a 2-way pegged Bitcoin sidechain
- It functions as a deterministic virtual machine for smart contracts that uses Turing mechanisms and the same hashing mechanism as Bitcoin while remaining compatible with Ethereum’s EVM
- At its core, it is a SHA256D merge-mining consensus protocol with 30-seconds block intervals
RSK ensures fast, cheap transfers that are compatible with the Bitcoin protocol, and it offers a highly-secured platform for smart contracts at the same time. Unsurprisingly, it is one of the first choices of blockchain-based projects for worldwide governments that look towards the future.
How the Argentinean Government is backing RSK
Argentina has just defaulted for the second time in this century. Still, the back-breaking debt is not killing its goal to achieve a sort of readiness for when the digital currency will become standard.
At the moment, RSK seems to be a reliable choice for the mission. The Central Bank of Argentina (BCRA) has already made progress in creating a proof-of-concept (PoC) on RSK technology, which would enable the end-to-end traceability of account debit claims.
The development team behind BCRA’s project is the Blockchain Group, which consists of prestigious names, such as the IOV Labs, Sabra Group, Banco de la Provincia de Córdoba, BBVA, ICBC, Banco Santander, BYMA, Interbanking, and Red Link.
The implementation of this PoC will bring banks, financial institutions, and technology developers under the same umbrella. Its viability will be the subject of conclusive tests from all the actors involved in the process. One of its challenges will be the addition of other banks and commercial banking agents while maintaining its practicability and long-term functionality.
The bond between RSK and Argentina strengthens
Argentina has taken a genuine liking to RSK, and the country’s natural gas regulator, Enargas is looking at effective ways of using the platform.
In this regard, Enargas and one of its main distributors, Gasnor, have kick-started a joint project that would secure and accelerate Argentina’s gas certification processes.
The new smart contract-based platform will be a permissionless blockchain dubbed Gasnet, which will run a network node between the two entities. This way, transactions, certifications, and other documents will travel with lightning speed between them. Both the processing time and the costs will decrease significantly, as will the annual volume of paper consumption.
The long-term plans for the project aim to transform Gasnet into a national blockchain-based database for the gas distribution industry, which at the moment comprises nine companies.
RSK gets international backing through OS City
RSK is steadily becoming the go-to smart contract-based platform when it comes to leveraging the latest technologies. One company that finds it trustworthy is OS City, which provides full digitalization services for governments worldwide.
OS City is a gov-tech company that originates from a project led by PhDs in Political Science and Artificial Intelligence. It aims to implement “open-source digital certification solutions using blockchain to increase transparency, preserve data integrity, and accelerate the use of portable records in the public sector and informal economy.”
Simply put, a government can use OS City to upgrade its municipalities to the present-day technological progress and prepare them to become the smart cities of tomorrow.
OS City has chosen RSK to create a blockchain-based platform on which government agencies and departments could exchange information and transactions through smart contracts. This highly-secure network would speed up government actions, reduce corruption, and promote environmental, social, and economic prosperity.
A series of prestigious brands are backing OS City, such as Google, UNICEF, Singularity University, and The WEF. For now, countries like Argentina, Mexico, Brazil, Colombia, and Chile have expressed their desire to implement OS City services.