The transparent and decentralized nature of the blockchain network enables the development of a non-refutable, and unbreakable record of data, which can be applied to a diverse range of verification and authentication solutions.
Throughout the year established financial institutions, banks, governments, law enforcement agencies and leading educational organizations have disbursed millions of dollars researching these applications.
Some of these funds have gone toward a number of blockchain startups, geared toward the development of smart contract based identification, authentication and record validation platforms. Startups including Bitproof and Ascribe are leveraging blockchain technology to develop decentralized, automated, and unbreakable record keeping systems, enabling individuals to embed ownership claims and intellectual property rights into blockchain-based smart contracts.
“We live in a broken world. From finance to private property, major parts of our lives rely on easy-to-forge pieces of paper called contracts.”
Austin-based Factom have launched various products to assist startups and institutional clients deploy and build blockchain-based applications, including blockchain networks with data management, audit, and compliance systems.
Due to the transparency of these networks, the solutions from Factom can be adapted to almost any organization. Established financial institutions can implement Factom to audit all financial trade data in real time, while healthcare organizations can track communication data for the federal Health Insurance Portability and Accountability act (HIPAA).
The organization also believes that its infrastructure could be implemented by governments, to develop decentralized and automated voting systems.
"We have a dream that a new generation of voting systems can be built on blockchain technology and allow each person one (and only one) vote. Results can be validated by math instead of relying on the sticky business of having people tally and report the results.”
- Peter Kirby, Factom CEO
An increasing number of organizations and political parties have proposed the creation of a blockchain-based system to build a fairer and more transparent voting environment. in 2014 the Danish political party, Liberal Alliance, proposed using the technology for e-voting.
“The blockchain removes the need for trust, because the technology can run autonomous without interference from humans, and it is at the same time open source and transparent, so that everybody can look under the hood and see what's going on. It doesn't get any more liberal – so that’s why it’s an obvious choice.”
- Mikkel Freltoft Krogsholm, Liberal Alliance
One of Nasdaq's latest initiatives aims to migrate proxy voting, used by shareholders, onto a blockchain solution. Announced by chief executive Bob Greifeld in October, Nasdaq will test blockchain technology to “better manage and streamline the proxy voting process,” starting with a Nasdaq market in Estonia.
In the US, Blockchain Technologies Corp is hoping to replace aging voting infrastructure with a secure, open-source solution, that uses distributed ledger technology. “America’s voting machine technology – or lack thereof – is a looming crisis,” states the company.
“Many states use voting machines that are over 10 years old that are not only antiquated and failing, they are also becoming increasingly expensive to maintain as parts are no longer manufactured. Election fraud undermines the very fabric of democracy.”
- Blockchain Technologies Corp
Developing countries that suffer from serious electoral fraud or vote rigging, such as Guatemala, could also greatly benefit from a decentralized blockchain-based voting system or “e-voting.”
Faced with massive protests and overwhelming public outrage over his alleged involvement in a major corruption scheme, former President of Guatemala Otto Pérez Molina recently resigned from office. President-elect Jimmy Morales, who was elected on October 25, is now under pressure to respond to citizen’s demands to advance anti-corruption measures and much needed political and institutional reforms.
“Central America has been mired in corruption and a lack of accountability. The clear lesson of this moment is ‘si se puede, it can be done’. Those living in the region can not only envision a better future; they can make it happen peacefully.”
- Adriana Beltrán, Washington Office on Latin America Senior Associate
Due to an increasing number of protests and complaints from Guatemalans, the United Nation launched a commission called the International Commission against Impunity in Guatemala (CICIG) to help the citizens of Guatemala vote fairly.
“The Commission has helped launch over 200 investigations involving more than 30 criminal structures and hundreds of government officials in its eight years of existence. Among its achievements are the convictions of a former president, several ministers and other high-level government officials, and the removal of public officials who had been colluding with criminal and corrupt organizations.”
A blockchain-based decentralized transparent system of records could unravel the hidden powers behind electoral frauds in many of these situations, and eliminate international mediators such as the United Nation and the CICIG.
However, technology is only one part of the equation, and is far from complete. As Kirby explained further: “A couple of very tricky technologies need to be built to make that a reality: 1) we have to have a decentralized data network that we can trust. 2) we need a robust identity system that allows each person to privately verify their right to vote and also privately cast their ballot. 3) Finally, we have to build a system that tracks this in an immutable way, so there's no way to contest the future results.”
Factom is not planning to build these automated decentralized voting systems themselves. The company is planning to work with organizations that are in need of such systems. “Factom provides the infrastructure for some brilliant people to build these systems. We're always happy to be part of this important conversation towards transparency and honesty,” Kirby added.