We’ve all dealt with government bureaucracy and red tape. We create new accounts for each department, verify our identity multiple times, and wonder why government agencies don’t securely share our data.
Liz Tanner has served as the Director of the Department of Business Regulation for Rhode Island since 2017. Earlier this year, Governor McKee appointed her the Secretary of Commerce for Rhode Island. When Liz joined state government, she set out to change bureaucracy and red tape and raise Rhode Island’s ranking in business climate statistics. Traveling the country, Liz found no inspiration in larger states with more resources. In fact, with few exceptions, the states conducted their activities in the same way. Looking internationally, she was intrigued by Estonia as one of the first nations in the world to embrace and deploy blockchain technology in production systems.
Introduction of Blockchain technology in the government with an Estonian model
The Estonian model made dealing with the government easy and frictionless. Using blockchain technology, citizens enter their information only once, and the same information will be available when interacting with multiple agencies and government departments, such as applying to college or obtaining a permit or license. Liz wanted to bring Estonia’s blockchain experience to Rhode Island.
In 2017, the state issued an RFP to explore the idea of bringing Blockchain technology into government. The response was unprecedented, with more than sixty ideas from over thirty vendors covering a variety of businesses from marijuana to licensing and licensing to healthcare.
Rhode Island selected Infosys Public Services to help streamline the process of opening a new business. However, a deep dive revealed that five independent government agencies were involved in this process. Recognizing that long-term adoption depends on the success of the pilot, the scope of the project was limited to the Department of Business Regulation.
The initial proof of concept focused on CPA accreditation as a low-risk project that could prove the technology.
Reducing a multi-week process to thirty minutes
It has normally been a cumbersome process for a CPA to renew a license in Rhode Island and prove their credentials. The blockchain pilot developed by Infosys Public Services dramatically reduced the time and allowed the CPA to keep their credentials in a wallet on their phone.
Obtaining a CPA license requires proof of educational credentials, CPA exam results, work experience, and identity verification. The driver’s license verifies identity and residency, the employer verifies credentials, and the Department of Business Regulations verifies all documents before the license is issued or renewed.
The blockchain-based solution creates an identity blockchain network that digitizes and automates workflows, enabling the secure exchange of information between government agency and citizens. In the future, CPAs will be able to initiate a service request (eg renew their CPA license) simply by interacting with any firm they have worked with in the past. This “principal company” through the identity blockchain network works with the Ministry of Business Regulation to complete the service request. This solution eliminates the need for the citizen (CPA requesting renewal) to share information multiple times.
The Department of Motor Vehicles (DMV) also provided the capability of a listen-only node in the identity network. This will allow Rhode Island to deploy additional DMV use cases on this One Rhode Island ID network.
Infosys Public Services used Hyperledger Indy, tools and libraries to create and manage digital identities and used basic blockchain standards to ensure data security. Hyperledger was built to scale in the cloud using Amazon Web Services (AWS).
The solution is highly secure as all of an individual’s data remains in the individual’s wallet and the user is in control of who and what part of his/her data can be accessed. Personally identifiable information is never stored in the ledger. Verification is only requested via a Decentralized Identifier that represents the credentials.
CPAs are one of the few professions that can practice in all states. However, they must provide a valid license to provide their services to a customer. With this solution, CPAs have a fast, secure and easy way to verify their credentials using their digital wallet. Several states and national organizations are exploring ways to adopt blockchain as it simplifies the credential verification process by leaps and bounds.
Three key technological elements of the solution
A blockchain consists of secure blocks of information that are sequentially linked to each other. The chain forms an immutable ledger distributed across participating nodes. The first element of the solution is digital identity. Today every document that proves our identity, like our driver’s license or passport, is controlled and owned by the government, whether we like it or not. Blockchain digital identity technology establishes a “Self-Sovereign Identity” (SSI) that shifts ownership of identities from government to individuals.
SSI shifts identity and credential management from centralized government-run systems with all the associated silos to a peer-to-peer model using public key cryptography, decentralized identifiers via a blockchain.
The second component is Hyperledger Indy, a distributed ledger built specifically for decentralized identity. Hyperledger Indy comes with tools, libraries, and reusable components for creating and using independent digital identities on blockchains.
Finally, there is Hyperledger Aries, the client side of a decentralized identity application. Aries is the client layer in Hyperledger Indy that facilitates interaction with other platforms.
Talking to a government agency is a first for me. But here’s the cool part: Rhode Island with their partner Infosys Public Services is doing this instead of talking. I know the CPA digital credential option was definitely not sexy, but it did prove the technology. The importance of building a base is huge and could lead to a complete overhaul of how we work with government.
The State of Rhode Island and Infosys Public Services deserve credit for delivering a blockchain pilot initiative in the midst of a pandemic, which is heroic. It is also important to note that this project would not have been possible without the strong leadership from former Governor, current US Secretary of Commerce Gina Raimondo, who understood the potential and learned about the technology that will help it move forward. When it was finally time to push the pilot forward, Lt. Gov. Dan McKee provided approval from the top.
Looking forward, Liz, with new funding, would like to return to her original desire to start a new business by providing the information in one place. Today, when you create your LLC or corporation, you do so in multiple areas of state government, including four or five different sites. In the future, citizens will use a single data entry site to enter information once and go where they need to go from there. Now that she is sexy
Through the blockchain initiative, residents and businesses in Rhode Island will create a digital credential that will be used on various government and state websites. Liz avoids calling it blockchain because of its association with cryptocurrency. Liz describes it as “a way of keeping information in a very safe and secure place so you can use it over and over again.” It’s a worthy goal that I hope other states follow Rhode Island’s example.
Note: Moor Insights & Strategy writers and editors may have contributed to this article.
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Moor Insights & Strategy founder, CEO and chief analyst Patrick Moorhead is an investor in dMY Technology Group Inc. VI, Dreamium Labs, Groq, Luminar Technologies, MemryX and Movand