Can decentralized smart contracts be implemented in the Government Sector?

New technologies are influencing every sphere and industry and help streamline, automate and make operations cheaper than were offered before. Citing the limitless options on offer, local governments are now considering the use of Decentralized smart contracts in the work process.

What is a smart contract?

As explained by the experts from a Smart contract development company, a smart contract is basically a collection of codes or algorithms that are based on blockchain technology. These algorithms work as an agreement between two or more participants. Once the parameters set in the code are met, these smart contracts will automatically execute and fulfill all the conditions mentioned in the smart contract.

Same as the traditional contracts the smart contracts can also be enforced in place for achieving greater reliability and implementation of standard operational procedures. The logic fed into smart contracts is very simple – IF-THEN or WHEN-THEN which are statements recorded as codes on a blockchain network.

How can the Government and public sectors benefit from smart contracts?

Blockchain technology is now implemented in several sectors for offering a wide range of ways. This new-born technology is now influencing the public sectors as the public ledgers can be leveraged by streamlining processes and reducing fraudulent activities as well. Here are some examples of how smart contracts can be implemented by the government –

· Protection of digital identities: With digitization being accepted globally, there can be issues with the management and protection of digital identities. Government can use blockchain-based smart contracts to protect the confidential digitized data of every citizen, gather all the data like birth certificates, passports, driving licenses, and anything confidential, and convert it into a piece of single encrypted information.

·  Streamlining taxation process: Smart contracts can be utilized by the taxing authorities to streamline the entire tax procuring process. The tax collection process can be streamlined which will benefit both the taxpayer and the government. Blockchain-based smart contracts are best at checking and tallying tax data when the transactions are made or tax deductions are calculated. Cases of tax fraud will reduce to an extent with exact verification of tax data compliance and implementation of a public ledger by the tax department.

· Tamperproof agreements: The smart contracts can be used to track real-world data like weather, automated contract pay-out, etc. with the fulfillment of specific parameters or conditions mentioned in the contract. Putting smart contracts at work the weather department can easily monitor temperature, precipitation, and sustained abnormal temperature fluctuations as well.

· Network access: Government can implement blockchain-based smart contracts to access the public and private networks. Through the public network, the government can provide access to citizens to their data and generate identical copies of the documents such as licenses and different certificates. Through a private network, the government provides permission for data access and governmental facilities can use this network for internal data exchanges.

Concluding up, blockchain-based smart contracts have the unconventional potential for many industries and the government sector as well. This distributed ledger technology is becoming common in the public sector for streamlining and making operations more transparent.