GBA President Gerard Dache’ comments on the recent speech (July 14th, 2017)  in the US House of Representatives, by Rep. Rohrabacher, related to cryptocurrencies and blockchain based solutions… and the absolute need for rationality and sanity moving forward.

Response from President of the of the GBA:

 The Government Blockchain Association would like to affirm and support Congressman Rohrabacher and his call for more attention and use of cryptocurrencies and related technologies in order to both stop illegal action by criminals as well as foster the protection of rights of law abiding citizens.   Cryptocurrencies are often undergirded by blockchain and we agree with Congressman Rohrabacher that, as with any technology, this can be used by all manner of individuals and groups for doing right as well as breaking laws.  Banning digital currencies…certainly does not prevent the underlying criminality.  It is rational to use technologies such as blockchain to both thwart criminals as well as to encourage innovation for law abiding citizens.  We must, as a nation, find the right application of all technologies and continue to define crimes as something committed by humans, not inanimate objects and technologies.   All eight hundred-plus members of the GBA look forward to helping the United States Congress in a bipartisan effort, as well as other international lawmaking bodies, to find the best public-sector applications of blockchain.   We stand ready to establish focused working groups to assist in this manner and help to develop the use of related technologies.

The transcript of the Congressman’s comments can be found here:

https://www.governmentblockchain.org/resources/listing/blockchaincryptocurrency-comments-by-us-congressman-dana-rohrabacher-ca-48th-dist

 

 

One of the most respected financial journals is Investors Business Daily (IBD). www.investors.com   I have read this off-and-on for ten years or so, and they justifiably maintain a top rating for analysis of markets (financial, stocks, mutual funds and commodities).  The serious financial adviser and stock-selection practitioner consults this newspaper (actually, website) daily.

When IBD whispers… I try to listen.  Their recent headline article (week of July 31, 2017) provided an analysis of the payment processing industry and its leaders in North America.  The mega trend worth paying attention to… is this:

  • Payment processing is increasingly convenient, competitive and frictionless;
  • Multi-billion-dollar players continue to innovate and reshape offerings for consumers;
  • Be on the lookout for changes as these mega companies (Amazon, VISA, PayPal, etc.) look for marketplace advantages;
  • Consumers are the beneficiaries as this market evolves.
  • There is vast opportunity and this exists at multiple levels.

This is interesting to the GBA when you consider an estimated 260,000 US Federal employees spend roughly US$19B annually, according to the Daily Caller newspaper.  Where it gets even more interesting is that a major portion of this is not very well accounted for or audited.  Hmmmmm….

“Hey, General Services Administration… would you like to create a secure audit trail for each of those 19 billion dollars so Americans can rest assured that our tax dollars are being well spent?  Why not a blockchain-based federal credit card?”

 

This does not have to be a can of worms.  At a high level, it is strait forward:  public monies are auditable via a blockchain transaction network that does not belong to the proprietary data centers of VISA or MasterCard, etc. and can be scrutinized by those who have authorization to know about the transactions… such as inspectors general (IG), or an agency ombudsmen.

Am I asking for the moon here?  I don’t think so.  Who would have thought, just ten years ago, you could stream virtually any sporting event to your smart phone and conduct any conceivable financial transaction from the middle of a field in most rural locations in North America?   And this is true to an even greater extend in other portions of the globe.  The citizens of Africa know this well.  The ability to bring about this kind of change exists in the will to do so.  The technology is here.  Yes, it takes time to permeate but the change is happening.

 

Ran into Stacy B. at Cogent Law Group (Washington DC) (http://www.cogentlaw.co/ ) recently and we were wondering if government contracts would be a reasonable use case for applying blockchain.

Let’s see…

  • Voluntary and distributed electronic participants … check.
  • Transfer of some sort of high value assets, ownership, or monetary units … check.
  • A process intensive flow of data (back and forth) that must have an audit trail … check.
  • Encryption desired… check.
  • Identity of participants matters to the transaction…check.
  • Eventual placement of contractual award of some sort with deliverables fully tracked through a detailed life cycle… check.

Yes… this is a fantastic use case.  In fact, Cogent Law Group, as a member of GBA will be leading our working group that tackles this topic.

For a full discussion on this, browse here:

https://www.linkedin.com/pulse/government-contracting-community-ready-next-tech-stacey

If you’d enjoy getting involved (i.e., contribute to the working group), please message [email protected]

 

Question:  what are the top criteria for a blockchain implementation—or smart contact that could serve the contracting officers in a governmental organization?  Please comment below.

This jumped out at me: “We are very excited about this [blockchain] approach, and we think it’s part of the acquisition front we’re trying to get to,” said Bergin, according to the report.

http://www.executivegov.com/2017/05/john-bergin-dod-eyes-use-of-blockchain-tech-in-standard-parts-production/

Mr. Bergin is in a position to think out of the box, at the DoD’s office of the CIO.  This is good news.  Our government needs more folks like him.   The US Navy has been examining the use of 3D printing (called additive manufacturing) for several years, which will give them an ability to create–or print, long discontinued parts from nothing more than the CAD model.

This is appealing since a part gets more expensive once it goes “out of production” in normal manufacturing cycles.  The Defense Industrial Base (DIB) companies must charge a higher margin in order to keep low quantity production lines in operation–or–keep them at all, when the DoD only wants intermittent replenishment.  So, the solution to avoiding exorbitantly priced and low quantity resupplys could be to create a capability that allows parts-on-demand via 3D printing.

Could blockchain be used to replenish sensitive parts for the Defense Department? And certify those parts as authentic? They DoD CIO is thinking “yes”.

Blockchain comes into play during the sub-processes that essentially prove that the parts have been manufactured by an authorized and certified DoD parts manufacturer.   We can’t have ship and aircraft parts being forged or manufactured by just anyone.   (trust me… you do not want this!)  This process can insert a blockchain token into the part itself and allow it to be tracked from the time it’s is removed from the 3D printer… all the way to parts-retirement, twenty years from then.   It is all about data and retaining a single source of truth for that sensitive parts data, over the lifecycle of the part.  Defense logistics may be on the verge of reinventing itself.

Cool idea, huh?  Like much of the other use cases for blockchain, it involves the combination of other technologies and the re-thinking of a process, that will give birth to fresh ideas and potentially millions (and millions) of dollars in savings.   We need more folks like Mr. Bergin!

And yes, I have put a call into Mr. Bergin to learn more.

Stay tuned.

What do beer, blockchain and Boulder (Colorado) …all have in common?  Well, this past Thursday, Congressman Jared Polis (Democrat), of Colorado’s 2nd District, spent some valuable time with us at a biergarten in his home district, discussing blockchain.  As host, I was able to lead a discussion, and decided to focus my questions on broader issues and keep the discussion leaning towards the high-level themes.

      

This event is important for several reasons.  First, getting forty-five minutes of a Congressman’s time and attention, anywhere, is a huge statement of what’s important to this particular legislator.   As co-founder of the Congressional Blockchain Caucus, back in 2016, it was important then and must still be now.  Second, I thought his answers to the questions and issues were well rounded.  Given his entrepreneurial and technology background, he sees the potential of blockchain and the list of solutions that it could well support.  Third, he wants bipartisan support and mentioned his colleague David Schweikert from Arizona’s 6th district, a Republican, as co-chair of the Blockchain Caucus.  Fourth, among other things, he stated that he’s committed to staying current and informed on the technology’s progress especially as it becomes a potential solution for stymied bureaucracy across the federal agency portfolio.  If elected governor of Colorado, I expect he will take this interest to Denver (i.e., Colorado’s capital) in 2018.

We at the Government Blockchain Association were thrilled to support this kind of leadership as it pertains to using this technology for a better government; the fact that he was willing to have the discussion over beer tells me that he does not take himself too seriously.  This is a good sign for a Congressman!  Also discussed were the limits of what Congress can do at the agency level, and the fact that funding packages and other legislation typically does not reach into agencies and direct chief information officers (CIOs) to use one particular technology over another.  However, if—as a community, we see things headed in the wrong direction, we have a friend in the Blockchain Caucus and Jared Polis.  He has a friend in the GBA including our 760+ members.  Be on the lookout for other GBA progress in talking with national leadership related to blockchain.

Thank you to Congressman Polis’ staff for working with us on the details and Kevin Owocki (https://twitter.com/owocki ) for video capture: https://www.youtube.com/watch?v=cUgDpcmTdCA&t=2s

  This is important!  The state of Delaware hosts more than one million business’ legal incorporation, which also includes over 60% of Fortune 500 corporations.  This according to www.mentalfloss.com.   This is because…”Delaware’s courts, tax system, laws, and policies have made it an attractive state for businesses to incorporate in since at least the early 1900s”.

Now for the blockchain news… according to www.coindesk.com, “The state of Delaware has passed amendments to state law that make explicit the right to trade stocks on a blockchain, according to multiple sources familiar with the matter.” here are the details or at least the few that we have at this point:

http://www.coindesk.com/delaware-house-passes-historic-blockchain-regulation/

The Government Blockchain Association agrees with the state’s staff who worked diligently to bring this about: this is worth celebrating.  Congratulations to them for leading at time when it is not only necessary but even critical, if blockchain technology is going to make a difference.  with this exertion of leadership and vision, 2017 has a chance of becoming “the year of blockchain adoption”.

How sweet that would be?   Could blockchain be used to help hungry nations to get the food they need.    As if this isn’t enough motivation, this may be an excellent way to account for, track and assure-the-delivery of—billions more in aid.  This is foreign aid that is often lost to black market warlords, gangs, and thugs.  No wonder Mr. Yoshiyuki Yamamoto of the UN’s office for Project Services (UNOPS) is exploring blockchain  alternatives!  The GBA has put in a call to him (actually …an email)  to see if our members may be able to help.

      

Can you imagine tracking every United Nations dollar-of-aid using a UN blockchain?  This is the kind of use case that gets so many in this field so excited.  And why not?

This is essentially a supply chain challenge and possible a micro-payments tracking challenge.  What makes this compelling is that cryptocurrencies such as M-Pesa are already becoming very widely used across Africa; it would seem that most citizens get bandwidth before they get a reliable supply of clean water and food.  This is where federal leadership (in second and third world nations) need to help their citizens by exploring technology that effectively bypasses the criminals who would otherwise steal needed supplies.

 

These two articles will give you specifics.

http://www.coindesk.com/blockchain-finally-unite-united-nations/

https://www.blockchain-expo.com/2017/04/blockchain/un-launches-request-information-blockchain-based-international-assistance/

Clifford May is a commentator and political analyst; he is not a blockchain technologist, but he may have discovered a great application for this new technology.  In his May 17th article (Washington Times) he suggested that the challenge associated with a foreign national/worker program, that allows non-citizens to come to the United States and work … may not be that difficult to solve.  Of course, the challenge is much more than creating a list (or centralized database) and matching foreign workers to a job, and the original idea was not his own—it was credited back to a ranch owner/operator who desperately needed reliable ranch workers.

Government at work

My idea is to use a chain of linked data (via a permissioned blockchain) as the primary core of the program vice a chain-linked fence; this solution has characteristics of a perfect blockchain use-case scenario.  Let’s call it the Guest Worker Enablement Blockchain, or GWEB.   Consider that…

  1. Identity of a worker is a major part of the use case;
  2. Their identity could be tied to a red ID card, with the convenience of a credit card; (see article);
  3. This will be issued by the US Federal Government;
  4. It will be used at various and sundry border crossing locations;
  5. It would be hacker proof, or as secure as distributed ledger technology can be;
  6. Once a worker has been granted “worker status” he or she would need to be able to prove this if his card is lost, stolen or challenged, by simply having the local authority check the applicable blockchain.
  7. Border crossing is already slow; any solution here would need high speed networking;
  8. The Customs and Immigration Service in the US is in sore need for modernization with a technology based solution that is both simple and elegant.
  9. The card does not even need to be used if the foreign worker has a smart phone and the correct app downloaded from the “DHS App Store”.
  10. Using smart contracts and other blockchain-based technology, each worker’s profile would trigger the correct downstream actions and reactions with regard to monitoring the program and even charging fees to applicable intermediaries and those businesses which leverage the program.

What do you think?  Why is this good or not so good?

One way to put the test to a new and emerging technology wave is asking, “are there jobs and blockchain employment opportunities breaking onto the scene?”.  “Is the blockchain hype validated yet in the job market?”  Recruiters know to ask these questions intuitively.  They tend to see the trend actually appear in the job boards and requisitions before the general market notices it (unless you happen to be looking for a job at the time).

 

As of May 2017, I am seeing the FINTECH+blockchain market broaden and I am also seeing health insurance companies acquiring blockchain developers.  Additionally, I am noticing smaller, entrepreneurial firms, presumably to gain a competitive edge, are putting requisitions on the street.  Consider a couple of the latest INDEED opportunity job alerts for the keyword “blockchain”:

  • Bank of America – blockchain developer needed (no surprise here)
  • IBM – blockchain developer needed (no surprise here)
  • Publisher – blockchain writer/reporter needed (ouch… reporters are worth more than $15/hr., aren’t they?)
  • Small consulting firms (QTY = 2) – blockchain consultant/engineer needed
  • Mid-sized tech firms (QTY = 2) – blockchain architect (if you can walk on water, that would be great, too!)
  • Health Insurance company – blockchain developer needed.
  • Tier 1 OEM (routers, switches) – blockchain bizdev architect – (QTY = 1) needed

  

I am definitely seeing expansion and new roles that are beyond ‘developer’.   What I am not seeing-at least in the US market at this time is government contractors and systems integrators trying to create a bench of blockchain talent.  Either they are building this internally or waiting.  However, one Lockheed Martin division has made a major commitment to develop software using private and very secure implementation of blockchain—and they acquired this with the help of a mid-sized integrator specializing in blockchain integration (the blockchain OEM is from Estonia).     This is a hugely validating step and applies to the kind of software development that must be validated, traceable and explicitly verifiable, even long after the fact (think of the kinds of development performed with a top secret clearance).  Generally, this is interesting because a tier one integrator received substantial support from a tier two specialty integrator.   For details, see http://www.coindesk.com/defense-giant-lockheed-martin-integrates-blockchain/

So, let’s agree to keep our eyes peeled… the market is opening up with opportunity, albeit slowly.  What are you noticing?  Please comment below.

Government adoption of cutting-edge technologies (such as blockchain) is sometimes oxymoronic; I can recall times in my own career when as soon as a federal IT program was declared “finished” it was also declared “legacy”.  Ouch.   Estonia, however, although the size of only one North Americna large city, say…about the size of Dallas, Texas, can still show us how to git ‘r done, in spite of their relatively small population:

http://fortune.com/2017/04/27/estonia-digital-life-tech-startups/

This article gives some great ideas; the progress made in Estonia should rightly earn their national government some top credibility.  Most importantly, they are using blockchain in ways that can be scaled to citizen populations of much larger sizes. This is key for the rest of us and I believe we can learn from their deployments, over the coming months.

Also, consider that in 2014, about one third of the US federal payroll would become eligible for retirement before the end of 2017.  One may wonder how many of these retirements may not be re-filled.  This means that at least the US federal government (among others, no doubt) will need to do “more with less”… perhaps much more.

Blockchain is perfectly fit for this task.