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Civil Service

Distributed ledgers: a new way to be paid?

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Photo of Sir Mark Walport
Prof Sir Mark Walport

The distributed ledger is an emerging technology generating growing interest.

It is, essentially, a database that allows all parties to see and keep track of who owns what – whether those assets are financial, physical or electronic. Updated and secured cryptographically, distributed ledgers are low-cost, easily expandable and inherently difficult to attack.

The first distributed ledger, “blockchain”, was invented to support the cryptocurrency Bitcoin, but the underlying technology already has further applications.

Estonians are using it to register businesses and pay tax online – cutting bureaucracy and saving public money. Distributed ledgers are reducing fraud and forgery in the diamond market by assuring the identity of individual diamonds from mine to jeweller. The Gates Foundation has started to issue charitable grants, using blockchain for low-value transactions.

Revolutionary potential

Technology image - Home OfficeThese examples highlight the potential of distributed ledger technology and the opportunities for the UK to improve delivery of services, both in government and the wider economy. The technology could revolutionise the delivery of welfare, including smaller, more frequent and more targeted payments. Distributed ledgers might enable real-time collection of taxes like VAT and PAYE – more secure, with fewer errors and losses to the Exchequer.  In the commercial world, there is potential for distributed ledgers to increase the efficiency of capital markets and reduce financial fraud.

I have set up an expert group – involving business, academia and the Bank of England – to identify and remove roadblocks to the safe exploitation of distributed ledgers. It is considering fundamental issues such as privacy and resilience, as well as exploring options for “proof of concept” demonstrators.

The UK’s strength in finance gives us a real chance to be world leaders in this area.

The distributed ledger is just one emerging technology on which we’re keeping a watching brief, so we spot early opportunities to boost national productivity and improve public services.

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  1. Comment by Ross Anderson posted on

    Walport shows extremely poor judgement. The realisation is now sinking in that bitcoin is in trouble. See for example Mike Hearn's <a href="">blogpost</a&gt; or my <a href="">Computerphile video</a> last year. The economics will break in October when the number of bitcoins per hash is due to halve, and already most of the miners are in China. Why expose the UK civil service to sovereign risk when many departments can't even handle basic technology risk? OK, so Walport advises the government, but who advises him?

  2. Comment by Ian Hopping posted on

    While no doubt this is a useful tool, and will have great benefits, it would be nice if the basic structures of data could be improved and brought into the 21st century.

    I work for MoJ, which has a highly fragmented data storage. Magistrates, Crown Courts, probation Prisons, police all have their own seperate systems, which necessitates emailing and faxing of common documents, rather than a shared central vault. Each area makes changes without reference to the others, leading to the situation where the Parole Board uses Prison Numbers that went out of use by the Prison Service in 2009 (replaced by new format references), despite both being part of NOMS. Probation seem to rely on Name/Date fo Birth Format - hardly unique, while the Police have up to 3 reference numbers per person. we then have to keep our own local look up lists to see who has what allocation.

    Why not use this technology across government to simplify storage and access? I have 6 seperate accounts, thus 6 IDs and 6 Passwords just to look at all the various systems for information about 1 person, plus then having to ask for documents held by other departments, some of which we are 'hard-charged' for: the PNC preconvictions? that will be £16 to the police.

    • Replies to Ian Hopping>

      Comment by Clive Neil posted on

      So true, Ian. Whilst it's great that Government is looking at how new developments in IT and information sharing can make its work more efficient, it would probably be a much better return on efficiency and cost savings if they just gave departments what it available now, rather than what might become available in the future.

      We keep hearing about "One Civil Service" but most departments don't even have just one information system that they use. Often, their different systems don't talk to each other, let alone those in other departments, as you indicate. Getting them to talk to each other or be able to exchange information in any meaningful way is either impossible or prohibitively expensive.

      Sort out the basics with IT that is fit for current purposes before going for state of the art.