Blockchain technology is transforming global politics

There is much speculation circulating regarding the U.S. presidential attitude towards cryptocurrency, primarily because it hasn’t been openly addressed. President Donald Trump’s attitude, ordained from orders such as the creation of the Market Integrity and Consumer Fraud Task Force in 2018, suggests he could be hostile. But what about his friendship with Ken Kurson over at Ripple and its potential state-adoption to offset China’s bitcoin mining dominance?

Speculation is further heightened by the international arena, with Russia’s State Duma considering legislation to pave the way for business-friendly blockchain integration and the possibility of a state-backed, oil-based cryptocurrency. The White House is doubtless closely monitoring world crypto events, and their result could impact domestic policy. This is compounded by Iran’s suggestion of using cryptocurrency trading to circumvent U.S. sanctions.

International politics aside, can blockchain be used as a political tool to improve election procedures and enhance voting security while keeping voters’ personal information separate and confidential? Arguably, it already is.

The Trump administration has previously made its support clear for blockchain development to improve political procedures. Of late, this seems to have been reaffirmed with the appointment of Mick Mulvaney – a long-standing supporter of bitcoin and blockchain innovation – in December 2018 as chief of staff inside The White House.

In 2016, Mulvaney stated: “Blockchain has the potential to revolutionise financial services, the economy, and delivery of governmental services.”

Over at Capitol Hill, pro-cryptocurrency and blockchain bills are being weighed up by Congress. The bills cover government support for the technology, guidelines to define and shape regulation (including commodity status and funds transfers), and improving definitions surrounding tax and profit. These bills follow in the wake of lobbying efforts to ensure the U.S. remains an active participant in the rapidly evolving sector and not to become locked out too early through stringent legislation.

More specifically, how can blockchain be used to enhance political and voting processes? Debatably, the first blockchain-based election was held in Sierra Leone in early 2018. In some African states, large portions of the electorate are suspicious of the incumbent parties, their ethnic loyalties, and voter transparency with results manipulated to favour preferred candidates. In Sierra Leone’s Western District, the most populous in the country, votes cast were manually recorded and separately logged by the Swiss firm Agora who offer blockchain voting solutions.

Whether this is genuinely the first blockchain-based election is questionable. In reality, Agora observed the voting process while trialling blockchain systems to demonstrate how future elections could be carried out. Leonardo Gammar, Agora Chief Executive, says Sierra Leone’s election commission (NEC) was “open-minded” about the potential of blockchain in elections. “I also thought that if we can do it in Sierra Leone, we can do it everywhere,” Gammar said.

Across Asia in Tsukuba, Japan, a blockchain voting system was trialled in August 2018. Voters cast ballots for various social programmes in need of financing – from cancer treatment, and urban sound navigation, to recreational equipment. To vote, citizens used their number card IDs.

The purpose of the trial was to decide blockchain’s use to maintain procedural transparency and minimise foul play, which it appeared to achieve. Sceptical at first, city mayor Tatsuo Ugarashi commented: “I had thought [blockchain] would involve more complicated procedures, but I found it minimal and easy.”

In Europe, Estonia has led the way in blockchain innovation for over a decade with blockchain securely storing online votes since 2005. The state has strived to empower its 1.3 million citizens through the use of public technology innovations and is a world leader in the field. Kaspar Korjus, director of e-Residency, states that “e-governance is a strategic choice for Estonia to improve competitiveness and increase the wellbeing of its people while implementing hassle-free governance”. Indeed, in early March 2019, when Estonia’s first ever female Prime Minister, Kaja Kallas, was elected, according to Korjus 26 per cent of the voting was “internet-based” with voters from 145 different countries signing in to make their democratic voice heard.

The potential for blockchain to enhance voting processes is clearly present. Future blockchain-based elections have the ability to enable voting from anywhere using a smartphone or other device, a secure record of votes cast, and the trustless ledger ensures security. Furthermore, voter privacy can be improved on from current practices which have come under much scrutiny of late.

Back in America, there is a clamour surrounding blockchain in politics. E-voting became mainstream in the wake of the 2000 presidential election, when George W. Bush won the presidency after a mandatory recount in Florida. Furthermore, regarding the 2016 electoral scandal that led to Trump gaining power, Forbes reported “the Department of Homeland Security claimed Russian hackers allegedly targeted voting systems in 21 states. Illinois officials confirmed their databases were breached, with 500,000 voter records compromised. The investigation resulted in charging 26 Russian nationals. Despite this, the threat has not diminished. As recently as July 2018, security experts discovered Russian phishing campaigns that targeted three candidates in the 2018 midterm elections.”

Can blockchain minimise electoral fraud? Kaspersky Labs have developed Polys, an ethereum-based voting platform. Polys uses smart contracts on its decentralised network to verify ballots and tally votes. In security terms, the entire distributed ledger would need to be simultaneously hacked to compromise the system which is highly unlikely.

In fact, blockchain-supported voting has already been partially trialled in America. In the November 2018 midterms, West Virginia piloted online voting through a mobile app using blockchain technology to tally votes. The system, designed by the startup Voatz, uses “biometric authentication to identify individual users before allowing them to mark an electronic ballot. The votes are then recorded in a private blockchain.” West Virginia officials said: “All that is needed to vote is a compatible Apple or Android mobile device and approved, validated State or Federal ID.”

For blockchain to become a viable and widespread voting and political tool, the technology first needs to develop and mature. Trails must be implemented to test functionality as well as general availability. Just some of the potential benefits from its use are the freedom to vote electronically from anywhere, the elimination of fraudulent votes, and enhanced security and transparency.

Looking towards the broader political potential, it serves to improve voter trust, reduce campaign costs, and increase voter turnout. Fortunately, it is already being considered, trialled, and adopted in-part by several nations – including the U.S. – with promising initial results.

* The information above does not constitute any form of financial or investment advice and should not be relied upon. Investing in Digital Assets carries risk. For more information please see our risk warning.

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