The Data Briefing: How Blockchain’s Future Growth Will Affect Federal Agencies

Sep 13, 2017

Over a year ago, I wrote about the potential of new chatbot blockchain digital autonomous organizations. I was excited about the possibilities of how the emerging technologies of chatbots and blockchains would merge to create the digital autonomous organizations and what this could mean for delivering government services. Since then, 2017 has being called the “Year of the Chatbot” because of the rapid advances in artificial intelligence (AI) and the explosion of tools that make it easy to create chatbots. In a column later this month, I will show you how to build a chatbot in just one weekend.

However, blockchain technology has not grown as rapidly as chatbots. Why one technology quickly grows while another technology begins to falter is the focus of this column.

Before we explore why blockchain growth may have slowed, let us review the promise of blockchains. According to a recent report, blockchains offer three benefits:

  1. Securely storing digital records and making the digital records easily accessible. Individual users can have “unprecedented control over their digital identities” which will increase privacy and security for consumers and institutions.

  2. Easily and securely exchange digital assets without having to waste time going through intermediaries. What once may have taken five business days will take five seconds at most.

  3. Smart contracts. As explained in the report, “[u]sing consensus protocols, a computer network develops a sequence of actions from a smart contract’s code. This sequence of actions is a method by which parties can agree upon contract terms that will be executed automatically, with reduced risk of error or manipulation. Before blockchain, this type of smart contract was impossible because parties to an agreement of this sort would maintain separate databases. With a shared database running a blockchain protocol, the smart contracts auto-execute, and all parties validate the outcome instantaneously—and without the involvement of a third-party intermediary.”

Block chain network concept on technology background.

Blockchains are an innovative technology which promises to radically change how society conducts business. Inherent in promise of blockchains are the disruptive effects on how organizations conduct business. It will take significant changes in organizational processes before agencies can begin to support blockchains. “Pioneering CIOs are well aware that blockchain reimagines the terms and conditions of doing business and the way in which society and the economy operates.” Having to reinvent how organizations operate might slow the progress of blockchains according to some analysts. “Most (blockchain proof-of-concepts) generate significant lessons around the business challenges that need to be overcome and, perhaps critically, whether existing non-blockchain technologies applied more effectively can achieve similar or better goals.”

The amount of disruption to an agency’s business processes explains why it may be easier for federal agencies to adopt chatbots than blockchains. Implementing a chatbot can use existing agency business processes and customer service knowledge to build the database for the conversational interface. Implementing a blockchain requires a large-scale organizational change project to prepare the federal agency for the distributed trust environment.

As many of you who have worked on large-scale change projects in your agency know, changing how an organization operates is a Herculean effort. Even though chatbots may be ready now, blockchains are still an adolescent technology with many years of refinement ahead for the technology. The promise of a digital autonomous federal organization may be a decade or two away. Meanwhile, I expect to see exponential growth in federal agency chatbots over the next decade and the rise of more augmentation technologies for federal workers.

Each week, The Data Briefing showcases the latest federal data news and trends. Visit this blog every week to learn how data is transforming government and improving government services for the American people. If you have ideas for a topic or have questions about government data, please contact me via email.

Dr. William Brantley is the Training Administrator for the U.S. Patent and Trademark Office’s Global Intellectual Property Academy. All opinions are his own and do not reflect the opinions of the USPTO or GSA.

Interested in connecting with other feds exploring blockchain, artificial intelligence (AI), and augmented or virtual reality (AR/VR)? Check out the new Emerging Citizen Technology program and join the related Communities of Practice.