Blockchain-based currencies were designed to be independent of public monetary institutions or states. Meanwhile, public organizations are investing a lot in utilizing blockchain-based technologies. Distributed ledger technology (DLT) is believed to have the potential to allow public services to improve effectiveness, reduce friction between agencies, reduce bureaucratic barriers, boost public engagement, enhance digital democracy and transparency, improve knowledge sharing, and foster automation through smart contracts. On the other hand, blockchain has been described as a buzzword and “hustle for nothing”.
By Johannes Anttila
A great way to find out what is behind the hype is to experiment with new solutions. TOKEN is a European research project that looks for the gaps and opportunities of DLT by experimenting with new blockchain-based solutions in public services along with researchers, municipalities, and private companies. Within TOKEN, four pioneer use cases are implemented aiming to reform: 1) public funding distribution, 2) public procurement processes, 3) urban last-mile logistics, and 4) smart city services to become more effective, trustful, and transparent.
These use cases aim to improve citizens’ and civil servants’ lives by helping to streamline and to increase the transparency of public processes, to create interoperable public services in which citizens regain control of their data, and increase the capabilities of public administration to utilize new technologies. These improvements are crucial when we are building public services and public governance that is capable of responding to people’s needs in the 2020s and beyond.
1. Improving the Public Funding Distribution Process
The process of applying to and managing public grant schemes is tedious, long, and costly for both parties (applicants and granting bodies). In addition, the process suffers from red-tape burden, lack of transparency and trust, data silos, allows for double granting, and has a biased distribution. For example, on average, a successful innovator seeking public funding spends 10% of the funding and 12 months just to be awarded.
The Token use case implemented by Fundingbox aims to simplify the granting process, reduce the administrative burden of granting and increase transparency and the level of trust. It aims to make selected granting processes faster for both applicants and funding distributors decreasing the time and cost by automatically validating the information provided by the applicants to the open calls. So there’s no need for due diligence by the granting bodies. In addition, the use case aims to improve the privacy of the data with a trust framework complying with GDPR.
In this case, selected startups and SMEs will use a decentralized, self-sovereign identity, which means that by having control over their data they can easily submit their applications. They will also be able to get certifications about their key data from different authorities such as universities or chambers of commerce. This is done through the provision of a funding passport that gives applicants access to a pool of funding opportunities where they are pre-qualified and their data is automatically validated. Applications thus become much easier, as well as their evaluation by the granting bodies.
2. Reforming the management of public accounts
The second Token use case aims to incorporate blockchain into active and existing smart city projects in the Municipality of Katerini, Greece. Currently, rigid and heavy procurement processes and long public contracts decrease the possibilities of new innovations and inhibit wider participation in public services.
This experiment aims to increase the transparency of public accounts by incorporating a blockchain-based platform into active smart city projects. The platform will enable fast and transparent processes saving cost and time, increasing trust and citizen participation as well as enabling real-time expenditures and audit trials.
3. Dynamic last-mile logistics of smart cities
More than ever, because of the effect of COVID-19 on the economy, local farmers and stores face important challenges when distributing and selling their food locally. Moreover, cities are looking for solutions to promote more sustainable mobility.
The third Token use case investigates how to promote last-mile deliveries and the local economy in the city of Leuven, Belgium, by granting access to the city and parking services based on sustainable practices.
By using the capabilities of blockchain technology, such as transparency and distributed traceability, the use case aims to create a trusted platform for all the partners. This platform will enable effective logistics tracking and planning for local food, and a distributed interaction with all the actors in the value chain.
The platform will be based on an index to grant dynamically calculated preferential access to the city by combining multiple metrics such as sustainability, green mobility, and real-time traffic information. Each actor will be connected to the distributed blockchain-based TOKEN platform to enable data sharing while guaranteeing that each actor can only access the relevant information needed to execute one single step of the process. In this way, the ownership of the information is distributed among all actors. They can each control which information is shared and prevent each individual actor to track the end-to-end process.
4. Enhancing Data Valorization Services
Smart cities collect a significant amount of data from several sources with the aim of providing new services to citizens. This is the case of the city of Santander in Spain, which in the last decade has deployed a relevant IoT infrastructure to collect data all around the city with the aim of developing new services and improving the existing ones. This data, used by the municipality, is also exposed through the SmartSantander platform to be utilized by third parties.
The goal of the fourth Token use case is to set up a transparent solution for the evaluation and valorization of the use of data made by third parties in smart cities. The use case will integrate the SmartSantander marketplace with a blockchain-based platform enabling radical traceability. This integration will bring new knowledge about how third parties make use of and exploit urban data offered by SmartSantander, providing value to the data exposed in the marketplace.
The valorization of data will be an incentive for third parties to share their own information through the marketplace, creating a new business ecosystem based on the value of data. In addition, the platform will provide additional trust and transparency mechanisms to municipality processes, like public procurements and citizen participation, that can be supported by the marketplace.
Via these cases, Token is able to achieve real transformation of the current processes of public administration. In addition, the cases enable learning: how do we scale these? What kind of challenges do public administrations face when utilizing new technologies? Do blockchain-based solutions have the potential to achieve some sort of paradigm shift within public administration?
These learnings are needed in the construction of public governance systems that enable competitive European societies—capable of solving global challenges from Covid-19 to ecological crises, and enhancing people’s trust and belief in a better future.
This article was first published on the TOKEN website. Launched in January 2020, TOKEN (Transformative Impact Of BlocKchain tEchnologies iN Public Services) is an EU funded project whose ultimate goal is to develop an experimental ecosystem to enable the adoption of Distributed Ledger Technology and to prove its value, via highly replicable Use Cases, as a driver for the transformation of public services.
TOKEN has received funding from the European Union’s Horizon 2020 research and innovation program under Grant Agreement No. 825268.
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Feature Image: Norali Nayla / Unsplash, edited by TOKEN