Blockchain 101: What Gov Needs to Know (Part II)

This is part II of our Q&A with Tomicah Tillemann, co-founder of the Blockchain Trust Accelerator and a member of the advisory board of the BitFury Group, a Blockchain infrastructure provider. In part I, Tilleman explained the basics of blockchain and how it works. His comments were edited for length and clarity.

GOVLOOP:  Can you tell me about your role and connection to blockchain-related projects? 

TILLEMAN: I spent a good chunk of the last decade in senior positions in the U.S. government, and about four years of that as a senior advisor to the Secretary of State. During that time, I ran a team on the staff of Secretary Clinton and Kerry that operated a lot like a venture capital fund. Our job was to find the best ideas we could for supporting democracy in civil society around the world. Then we would bring together technology, talent, resources and partners to make those ideas come to life.

But one of the challenges we encountered is that even when you had leaders who are committed to doing the right thing, oftentimes the underlying infrastructure was so broken or so inefficient, or so riddled with corruption, that it was very difficult for them to deliver the results that citizens were demanding.

We recognized that we needed a solution that would provide transparency, accountability, efficiency and trust, but do so at a much lower price point, in a way that could be easily scaled across governments and different agencies. The more we focused on that challenge, the more we kept coming back to blockchain.

GOVLOOP:  A quick clarification of what blockchain actually is — is it hardware, software? 

TILLEMANN:  Blockchain is a network. There are data centers all over the world that are part of securing that network and ensuring the integrity of that network. There are digital wallets that people have on their phones, or on their devices that allow individuals to access that network. Ultimately, it’s a lot like the internet, in that if you try to point to the blockchain, or try to point to the internet, it’s pretty difficult to figure out what to point at. It’s a highly distributed, decentralized structure that exists all over the planet.

GOVLOOP:  How exactly do you hold a government or other entity accountable with blockchain?

TILLEMANN:  You could open up a web browser right now and see transactions that are occurring on the blockchain. Each transaction has a unique identifier called a hash, kind of like the Dewey Decimal System for locating them in the record. So as long as you have your hash, you can verify your transaction in the system. You can’t fake it.

GOVLOOP:  So from a hash you’d be able to pull the documents and see that information?

TILLEMANN:  It depends on how the interface you’re using is designed. In some cases, all you can do is validate that information you have is accurately entered into the system. The way the hashes are designed, you can take information that you have and determine that it is producing the same hash that’s in the systems. You can say, I’m looking at a transaction and this is the correct hash for that transaction, and I see that hash being entered into the system. But you can’t work backward from the hash to replicate the information.

You can always guarantee that what’s going in is correct if you have access to the information. But whether or not you can work backward depends on a number of other factors and the architecture of the specific application that you’re using.

GOVLOOP: Given how complicated this technology is, how do you sell it to a general public?

TILLEMANN:  This is really complicated technology. I wish that were not the case. We have spent a lot of time and energy with similar folks trying to figure out how to make it simpler. But when it comes down to it, it is really complicated technology.

I think the best thing most users can do is to recognize that MIT, the World Economic Forum, IBM — virtually every big consultancy on the planet and many of the world’s greatest mathematical and other minds — have spent an immense amount of time validating that this works the way it’s supposed to work. In almost a decade, it’s never been hacked. The core technology has never been hacked. It’s about as secure as any system that humanity has ever created. Once you understand that and accept that, then you can start exploring what do we do with it and how can it help make our organizations more efficient and more effective.

GOVLOOP: Is blockchain viewed as an emerging technology?

TILLEMANN:  I would compare it to where cloud technology was a couple of years ago. You’ll recall in the early days of cloud technology, there was a lot of uncertainty and ambiguity about how it was going to work with and for government, whether government agencies would be able to store data remotely, whether they would be able to take advantage of the benefits that it offers, whether it would provide adequate security. And there were a lot of important conversations that took place around those questions. A few years later, the cloud is ubiquitous, and many — if not most — government agencies utilize it in some fashion. Blockchain I think is going to likely undergo a similar trajectory, and we’re in the relatively early stages of that process now. But it’s moving much more quickly than a number of past technologies. And so my hope would be that in the next few years, this will be a pretty common, perhaps even ubiquitous, part of the way that we run institutions and agencies.

GOVLOOP: Are there leaders at the federal level who are using blockchain well?

TILLEMANN:  I spent much of the day on Friday at the General Services Administration, and they have a very robust, sophisticated team that is looking at how to develop and deploy blockchain solutions for the U.S. government. We’ve had great discussions with the Office of Management and Budget, up to and including Director [Mick] Mulvaney, who was the co-chair of the Blockchain Caucus in Congress. This is a technology that is bipartisan in terms of the support that it’s receiving. It’s not about making government bigger or smaller, it’s about making government smarter and more efficient.

That’s something that a lot of different agencies are very enthusiastic about. We’ve seen some very intriguing efforts by the Department of Defense to develop blockchain applications through [Defense Advanced Research Projects Agency] DARPA. But at the moment, at a federal level, most of the work is in early pilot stages, or in the process of feasibility evaluation. We’ve also been in discussions with a number of other agencies that I shouldn’t name, but they are considering blockchain pilots and evaluating the feasibility of blockchain pilots. I’ll leave it to them to make their own announcements. But there’s a lot of activity in this space, and I would say it’s growing daily.

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Harrol R. Alexander

Have you ever heard the expression boots on the ground. The problem is not with computers it is people. Have you ever heard someone say if we do not spin the money we were allotted we will not get that money back next year. So just spend it all anything so they do and they put in numbers,now do you know what is there or does the BOOTS.Then what is this put it in surplus sales for peonies own the dollar. Now is this a computer problem or a people problem. So how do you fix this. So how do you stop government over spending. How is that do you thank that computer is going to fix that only one way Bar codes So the way I see it every computer that I buy should have its own bar code that way no one can get in to my computer with out the computer bar code.

Joe Antoshak

This is a really, really great question, Michelle.

Generally speaking, errors are considered final, but it’s a bit more complicated than that. In 2016, for example, Ethereum executed a hard fork of its blockchain to effectively reverse a $40 million transaction, and that move was both praised and criticized for what it would mean to the perception of blockchain as immutable. (https://www.coindesk.com/ethereum-executes-blockchain-hard-fork-return-dao-investor-funds/)

Basically, in large part because the tech is so young, there doesn’t seem to be one definite answer for best practice re: errors.

Apologies for the vagueness, but I hope this helps!

Yvonne Mikalopas

So this is the second post I’ve read about blockchain on Govloop and I went to the IBM site as well to watch a video about it. I have to admit, I still don’t fully understand it but do get the concept of it and how it can be applied to a variety of institutions and industries. I’ll be interested to see the buy-in and where this goes.

Avatar photo Nicole Blake Johnson

Hi Yvonne, you aren’t alone. As someone trying to understanding blockchain and explain it to a wider audience, I agree that there needs to be better messaging and education around the basics. Naturally, we want something to point or look at that is blockchain. I wish that were the case, but I hope in understanding the concept you know a little more than you did before reading. If you have specific questions, I am happy to get you answers. If you are in the D.C. area there are a few blockchain events coming up. I can share more details.