Presentation of paper at the IFIP eGov 2016 Conference in Guimaraes, Portugal, 5.-7. Sept.

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Beyond Bitcoin
- Enabling Smart Government Using the
Bitcoin Blockchain
Svein Ølnes, Western Norway Research Institute
eGov 2016, 7. Sept. 2016

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Content
 Research objectives and framework
 Method
 What is Bitcoin?
 Bitcoin as an information infrastructure
 Use case: Academic certificates stored on the blockchain
 Conclusions and further research

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Research objectives
1. To give an overview of the Bitcoin literature
 Bitcoin/blockchain literature in general
 Bitcoin/blockchain literature in e-Government in particular
2. To study the potential for using Bitcoin technology in public sector
services
 By comparing it to the characteristics of an information infrastructure
 By studying a specific use case

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Research framework
 Information infrastructure theory
 Comparing Bitcoin to specific characteristics of an II

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Method
1. Comprehensive literature study
2. Case study

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Literature overview – Bitcoin publications in general
Year No. of publications
2008 1*
2009 0
2010 1
2011 8
2012 21
2013 63
2014 208
2015 325
*Satoshi Nakamoto’s original white paper

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Literature overview – Bitcoin publications in the eGov field
Category EGRL 11.5 Google Scholar Web of
Science
Bitcoin Academic
Publ.
Search
phrase
«bitcoin» or
«blockchain»
«bitcoin/
blockchain e-
Government»
Same as
Google
Scholar
No search criteria
All publications
Economy 0 0 0 244
Technology 0 0 0 241
Regulation 0 0 0 107
Other 0 0 0 35
Irrelevant - - - -
Total 0 0 0 627

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What is Bitcoin?
1. A crypto currency
 A peer-to-peer electronic cash system
2. An infrastructure
 An open, distributed ledger on the Internet (the blockchain)
 Bitcoin is proof of ownership of an asset, physical or digital,
without the need of a third-party

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Bitcoin development
 Proposed in a white paper by Satoshi Nakamoto in Oct. 2008
 The Bitcoin system was started 3rd of Jan. 2009
 Has been running for more than seven years without any serious errors
 A platform for permissionless innovation, above all in financial services,
but also for use in other sectors
 Based on open source and open standards
 Bitcoin code published on GitHub

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Bitcoin key characteristics
 Distributed system (peer-to-peer)
 No central authorities (no central bank)
 Consensus-driven
 Secure transactions without third-parties
 Immutable
 Deterministic money supply
 21 million bitcoin in total
 12,5 new bitcoin mined every 10 minutes
 Halving of new bitcoin mined every four years (the last one in July 2016)

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Bitcoin key contributions
 A practical solution to the Byzantine Generals’ problem
 first formulated by Lamport et al. (1982)
 computer systems’ ability to handle conflicting information
 how to establish trust in a distributed system (without a third-party)
 An open platform for financial innovation
 But also an open platform for innovation in «trustless» systems
 A fully functional digital cash system
 Today perhaps the main driving force in cryptograhic research

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Bitcoin building blocks
 Open source software
 Digital signatures
 Public key cryptography (but not a PKI! There are no certificates)
 Hash functions
 Consensus based trust
 Network of nodes reach consensus based on rules laid out in the software
 Secured through Proof of work
 Massive resources needed to add new blocks to the chain
 But everybody can read the content on the blockchain

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Bitcoin as an information infrastructure*
Property Information Infrastructure Bitcoin as an II
Shared Universally across multiple IT capabil. Yes
Open Yes, allowing unlimited connections to
user communities and new capabil.
Yes
Heterogenous Increasingly, both techn. and socially Yes (althoug early)
Evolving Yes, unlimited by time or user commun. Bears the signs of unltd.
evolvement
Organizing principles Recursive composition Yes/No – only one reference
Bitcoin impl.
Control Distributed and dynamically negotiated Distr. and dynamically neg. (by
consensus and «voting»)
Information infrastructure (II): «A shared, open and unbounded, heterogeneous, and evolving socio-technical system
consisting of a set of IT capabilities and their user, operations, and design communities” (Hanseth & Lyytinen, 2010)

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Case study: Certificates on the Bitcoin blockchain
 Certificate from university courses (or degrees) put on the Bitcoin
blockchain
 Simple and cost effective solution
 Ubiquitous access to verification of certificates
 (MIT Media Lab have expanded on the idea and provided a set of tools
to ease the management of certificates on the blockchain)

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Case study: University of Nicosia’s use of
Bitcoin blockchain for storing certificates
1. Prerequisites:
 No other services or products than the Bitcoin blockchain
 Authntication of certificates without contacting Univ. of Nicosia
 Should be possible to perform the authentication even if Univ. of Nicosia
ceases to exist in today’s form (merger, shut down etc.)
2. Storing the index document on the blockchain
3. Verification process
 Verification of the index document itself (retrieved from the web)
 Verification of the certificate(s)
 MIT Media Lab has also done work on this
 Open badge + Bitcoin blockchain tools for storing and verifying certificates

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Case study: certifiates on the blockchain

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Case study: certifiates on the blockchain

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Case study: certifiates on the blockchain

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eGovernment blockchain initiatives
 Sweden: Planning to place real estate transactions on the blockchain
 Georgia: Blockchain project for land registries; through the National
Agency of Public Registry
 UK: Exploring the use of blockchain technology to manage distribution
of grants.
 Ghana: Blockchain to record property ownership.
 Singapore: Prevent traders from defrauding banks (hashed invoices
stored on blockchain and shared among banks)
 Delaware: Moving state archival records to an open ledger
Open ledger for private shareholders to keep track of their rights

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Conclusions
 The Bitcoin technology is absent from eGov literature
 Bitcoin as an information infrastructure has a great potential for
innovative use also in public sector, as the use case indicates
 Important research questions:
 how can Bitcoin help innovation in public sector?
 how should the currency bitcoin and the infrastructure Bitcoin be handled?
 Bitcoin in public sector on the blockchain, sidechain or altchain?
 Important factors determining adoption of this new technology?
 Installed base as a barrier to adoption of the technology
 Many similarities with the development of the Internet and web 25
years ago
 Can Bitcoin/blockchain help re-establish the decentralized Internet?

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Thank you for your attention!
E-mail: sol@vestforsk.no
This presentation: http://bit.ly/beyond_bitcoin
Bitcoin address:
1sveinoFzUtMQ5wnnxMoHX9vb42mvPsWN