Initial Country Offering: How To Build Government-In-The-Cloud or Country-As-A-Service?

Blockchain for Government


Is future something that happens to you, or something that you make happen?

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By 2023, blockchain technology will be actively exploited in the field of governmental services by leading world Powers.

According to OECD’s prognosis, 10% of world’s GDP will be created with direct use of blockchain technology.

According to the survey of The World Economic Forum’s participants


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What is the problem?

Difficulties in communication of the state and its citizens and opacity of this processprovides ground for giant industries of middlemen to thrive: assistance in LLCestablishment, traffic police document services etc. This signifies inefficient stateapparatus and its “parasites”.

The more middlemen out there – the more expensive and complicated the service is.

Governmental institutional structures are fragmented, which makes data exchangebetween departments and authorities a very difficult process.


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Solution #1

Unified digital ID

Passports, visas and other documents. Unified digital IDs (like the ones they have in India): noneed to fill in forms multiple times and wait for weeks before the documents are ready. And, ofcourse, no need to bribe officials to accelerate the process or get fake documents.

Significant decrease in “parasites”: useless middlemen like officials, passport office and Pension Fund workers…


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Unified digital IDAlgorithms of user recognition according to his personal gadgets connected with the system. This enables to achieve maximum level of integrity and operational compatibility within any infrastructure.

There is a number of projects worldwide that cover the field of verification of authenticity and reaffirmation of access rights: 2WAY.IO, ShoCard, Guardtime, BlockVerify, HYPR, Onename, BAASIS ID, Civic.

Registration, confirmation of personal data. Blockchain-based identification management. The solution to citizens’ personal data theft issue.

Integration with fingerprint scanners, voice and iris recognition and other personal biometric devices.

In 2016, UAE hereditary prince has approved state strategy for total conversion of statedocument management to blockchain protocol by 2020.

Austrian company Neocapita has announced establishment of decentralized platformbased on private fully-permissioned blockchain Stoneblock, aimed at solving thecostliest problem of electronic government – creation of registries. Neocapita isnegotiating implementation of Stoneblock platform in Afghanistan and Papua NewGuinea.

Swiss startup Procivis in collaboration with electronic government experts from Estoniahas announced the launch of blockchain-based “app store” for electronic governmentby the end of 2017.

Worldwide experience


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Solution #2

Control over budget spending. Transparency-as-a-service

Every citizen has transparent access to budgetand how it is being spent. Every “dollar” can be seen through the entire chain, clear where it ends up.

Citizens can initiate new items of expenditure and their voices count when the decisionsare made.

If the public service is provided poorly, smart contract doesn’t work and the payment iswithdrawn from vendor

International experience in public procurement and auctions:

March 9, 2017, “e-Auction 3.0” electronic auctions service was presented on Blockchain&Bitcoin Conference in Tallinn. It provides transparency in conditions, process and results of auctions for state property sales and rent. It has shown that code can help eliminate the issue of subjective decision and sales interventions. Big banks and Microsoft company have helped the project’s development team.


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Solution #3

Unified social scoring

Connection of all personal documents with credit history bureaus, mobile connection operators, social networks etc.

Tracking behavior in online and offline services, encouragement of positive social behavior.


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Worldwide experienceChina, «system of social trust» (社会信用体系)

Xí Jìnpíng has begun his leadership in China with tough fight against corruption in the Party, and now he aims at changing the society. With help of digital technologies and big data, the system analyzes data about each citizen, giving him individual score.Technology giants like Alibaba\AliPay, Tencent and Baidu has been helping him to bring this project to life.

Project has started in 2014 with adaption of “Program of development of Social Credit System (2014-2020)”: by 2020, not only every company, but every citizen of mainland China will be tracked and evaluated by this system in real time.

Trust rating is connected to internal passport. Ratings will be published in centralized internet database in free access. Citizens will high rating will enjoy various social and economic benefits: cheaper loans, health care and education. Private companies provide discounts.

Citizens with low rating are not accepted to various jobs, aren’t given loans, can’t purchase high-speed train and plane tickets, can’t hire a car and a bicycle without bail, are restricted to leave the country.

Companies are checked for their activities to follow ecological and juridical norms. Work conditions, workplace safety and financial reporting is being inspected. If there are no issues, the company is assigned high rating and enjoys privileged tax regime, good loanconditions. It can be placed on exchange and gets simplified administrative procedures, an “incomplete set of documents adoption” principle.

Every official’s personal data analysis: system compares data about the official and his family members’ incomes with their data of real estate and luxury items purchases. This approach enables to predict official’s behavior and reveal potential corrupters in a much more efficient way.


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Solution #4Services for entrepreneursEstablishment of legal entities, tax reporting, connections between companies and employees (vacations, employment records), contracts (agreements, invoices) among companies (and their enforcement) – everything can be tokenized for automatic record of enforcement, transparency enhancement and elimination of bureaucracy and corruption.

Today there is already a number of successful projects for “cloud business” establishment (and getting bank account for it along with other financial services:

- E-Residence in Estonia (bank account from Holvi 2 or Paywall 3)

- “Atlas” product from Stripe 4 (registration of company in USA from any othercountry + account from SVB + acquiring from Stripe)

In 2017 state of Delaware in USA in partnership with Symbiont startup and PillsburyWinthrop Shaw Pittman LLP technology company presented the initiative to automatizejuridical and operational activities of companies: the system digitizes process of company registrations, tracking of stocks movement and communication management of stockholders.

Registration of companies and document circulation for business: for this purpose, thereare such blockchain-services as Otonomos, BoardRoom and Colony.



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Solution #5Healthcare and insurance

Healthcare plans, medical prescriptions, account of drugs can be tokenized in a unified registry, accessible to everyone: other doctors, other insurance companies.

With help of blockchain technology, unauthorized change, access and use of citizens’ data becomes impossible, because any information of these actions is recorded in the system.

In 2016, Netherlands-based company Prescrypt in collaboration with SNS Bank NV and Deloitte developed a blockchain-based app that makes medical services more accessible for chronic patients.

In Estonia in first half of 2016 the government agreed with Guardtime company to transfer data of more than 1 million state citizens’ medical cards to blockchain database.

In 2016 USA-based startup BitHealth began to use blockchain to give their patients additional payment opportunities with their insurance companies.



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EducationSolution #6

Main characteristics of blockchain – accessibility and consistency of information that enable to implement it into education field. It will help verify factual qualification of school graduates or students.

Issuance/ accounting of diplomas, grades and school cards, dissertations, academic degrees in unified tokenized space

No unified state examinations – there is a unified database of accumulated and confirmed knowledge and achievements of students. There is no formal approach to education as the necessity to “pass the state exam”, but a transparent reflection of student’s accumulated knowledge. No university entry bribes.

If educational institutions register issue graduation diplomas or certificates in blockchain, potential employer won’t have any difficulties checking that you really studied in this university or courses.

This data in open access can be used by investors, who are looking for perspective thesis, and universities who need to make a decision for accepting credits for previously studied disciplines, when the student changes the place of living.


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Pensions and financial support

Solution #7

Current opacity of pensions calculations, dependency on some official’s signature to retire –these are the problems of the past. When a citizen is born, he makes a smart-contract with the society – in the course of his life, he accumulates social capital, and when certain conditions appear (age of incapacity for work, disability, large families), smart contract enters into force automatically.

Your accumulated social capital is your stake share from society’s accumulated welfare. This also increases general responsibility – we can only spend as much as we have saved together. Minimum salary and pension is no longer a subjective decision of officials.


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Land cadaster and real estate registry

Solution #8

Unified tokenized land cadaster and real estate registry. Instant transparency of rights and change in ownership. No “hidden apartments” of officials and corrupters. No “wait bribe” for housing registries.

In developing countries, lands ownership rights are still badly documented, that’s why legal owners often can’t sell their property, take loans against collateral and conduct other land-related operations. People suffer from misconduct of related departments’ employees.

Developed countries perfect operational processes, reducing time of transaction, which often takes up to several months, reduce the risk of fraud and mistakes in documents and transactions (change in rights ownership). This makes the process and the entire system more reliable.


In the beginning of 2016, Sweden’s State land service hasannounced its successful collaboration with blockchain-startup ChromaWay, Kairos Future consulting company and Telia mobileservices provider. They have developed a solution for buyers and sellers, and results of their work have been tested with participation of third-party banks.

In Georgia in the middle of 2016 BitFury company, National agency for public registry of Georgia, and economist Ernando de Soto announced the launch of pilot project for cadaster registration based on blockchain.

In the beginning of 2016 in Ghana a project called Bitland based on Graphene platform received official permission from Ghana government to create a land cadaster based on Bitsharesblockchain and issued CADASTRAL – basic tokens. With its help, it will be possible to register land ownership rights, solve conflicts, sell and buy land.

In 2016, Honduras government in collaboration with Factom company decided to exploit distributed registry for land rights registration, to fight fraud.


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Registration of author’s and intellectual rightsWorldwide experience

Solution #9

Ascribe helps artists and creative people to confirm and maintain author’s rights with help of blockchain. Ascribe enables to create digital editions with help of uniqueidentifications and digital certificates for authorship and authenticity confirmation. Also, there is an established mechanism of transfer of rights from artist/author tobuyer/collector, including its juridical aspects.

Other examples of services in this field: Bitproof, Blockai, Stampery, Verisart, Monegraph, Crypto-Copyrightcrypto - copyright.com, Proof of Existence.


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Commodities markets and Securities markets


Solution #10

Operations with commodities and raw materials: Uphold is a platform for moving, converting, transactions and storage of any sort of commodities and raw materials.

In 2017, as the result of 1,5 years’ work of Estonia government and Nasdaq stock exchange on blockchain-based system for company’s shareholders’ voting, it was announced that the experiment was successful and its scope of application would be expanded. Prior to the e-voting system launch in Estonia, blockchain platform Linq for private capital market was released. First deal was made with Chain company’s stocks.


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Electricity


Solution #10

Energy Blockchain Labs is an enterprise which’s activity is dedicated to full circle creation ofadded value in energy industry, implementing projects in the field of energy generation andconsumption, its trade, management etc.

Grid Singularity – decentralized platform for information exchange in the field that provides anumber of applications that simplify data analysis and tests, management of intellectual energysystems, work with “green certificates” etc.

TransActive Grid project by LO3 Energy enables to measure level of energy generationand consumption and several other rates in real time. First demonstrative installation iscurrently working in New York’s Brooklyn district.


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Implementation of non-cash payments, emission of electronic money


Solution #11

There is a lot of small talk about innovations, fintech and blockchain – but just take a look at how efficiently Sweden fights with cash! Government has simply started toprohibit usage of cash, pushing fintech-startups for further development.

Decrease of cash in circulation and gradual transition from real to digital money emission. The result: no conversion commissions, no underground economy and hidden oligarch money. Decrease in domestic crime, related to theft and robbery.

Total transparency on the level of banking system – transparency in deposited assets,lack of holes and deceived depositors.


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NEW monetary policy

“Helicopter money” term was offered by Nobel prize laureate in economics Milton Friedman in 1969 in his work “Optimal quantity of money”. Its essence is the following: you can raise inflation and stimulate economic activity by giving money directly to households, who, having more money, will spend them more actively.

President of European Central Bank Mario Draghi stated in March, 2016 that although “helicopter money” has never been discussed in the European regulator seriously, “thisis a very interesting idea”. A little later, ECB’s executive board member and chief economist Peter Praet similarly said in his interview that in theory, any state bank can issue money and give them to the people.

In 2002 Chairman of the U.S. Federal Reserve Ben Bernanke said that this method could “most sure” be an effective stimulus to consumption and, respectively, decline in prices.

“Helicopter money” principle is a basis for experiments in a number of countries to implement “universal basic income”.

“Helicopter money” can turn from hypothetical to real instrument to stimulate the economy, according to Citigroup, HSBC and Commerzbank

Earlier, Bridgewater investment fund founder and one of the most successful investors in the USA Ray Dalio commented on the topic. The investor specified, that in this phase of development state banks will start financing state expenditures from digital money and channel money directly to households.


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VotingSolution #12Federal and municipal elections. No rigging of votes or hackers’ intervention. No Low voter turnout problem, no situation where minority choses for majority. Every vote is transparentlycounted.

Referendums for socio-economic questions, population ensus – these projects don’t need agitation and advertising, polling station expenses, video control etc.

Decisions on neighborhood scale – every citizen connects his token to his place of residence and participates in decision making process with everyone. Citizen seen the expenditures, can initiate repair and maintenance works.


Remote voting technology based on the blockchain: www.boule.one. Deck: https://dl.dropboxusercontent.com/ u/21890242/life/sreda/ICO/decks/Boule.pdf

Follow My Vote develops safe and transparent blockchain-based platform for unanimous online-voting

Advocate – platform for enhancing communications of citizens with state authorities, aimed at helping both average citizens and candidates for positions in local governmental authorities.

Borderless – civil management platform, positioned as a coalition of worldwide accessible juridical (marriages, legal entity establishment, notary) and economic services(basic income, financial operations) based on smart contracts and Expanse blockchain.


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Estonia is one of the first countries to start implementing blockchain on state level

In Estonia in first half of 2016 the government agreed with Guardtime company to transfer data of more than 1 million state citizens’ medical cards to blockchaindatabase.

94% of citizens have electronic ID that enables them to use the system. 2% of countries GDP is saved on no-paperwork governmental system; 4000+ services are provided digitally; Estonia is the №1 country in the world by tax collection and Digital Economy Index.

Estonian state project of unified electronic system is one of the most successful implemented projects in the world.

Decentralized open system connects different services and databases. Because of this structure, it is easy to implement new services and applications to this system, and their transition to blockchain system is fast and easy.

“Cloud business” project in form of a e-Residence project was fulfilled.

In 2017, as the result of 1,5 years’ work of Estonia government and Nasdaq stock exchange on blockchain-based system for company’s shareholders’ voting.


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Estonia is a country without borders, where residents soon can become country’s stakeholders

Estonia is a country without borders, where residents soon can become country’s stakeholders.Companies come to Estonia, attracted by digital infrastructure and government’s views on newtechnologies. It’s not surprising that a logical continuation to this process will be a government-supported ICO to give many people a share in their country’s future. Within such an ICO,ESTCOIN can be issued.

Although this idea still exists only on the level of official state blog, country offering has causedincredible buzz and community support. It has been supported by leading crypto experts,politics, entrepreneurs and economists. For example, Ethereum founder Vitalik Buterin believesthat these tokens can be used to stimulate investors to support country’s success.

Acquired funds can be managed through public-private partnership with a goal to help Estoniacreate a brand new digital nation through investments in new technologies and innovations forgovernment, from smart contracts to artificial intelligence, and make it technically scaled formore people around the world to benefit it. Then Estonia will serve an example of how societiesof the future can be used in the era of new technologies.


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Small but successful Malta creates blockchain strategy

In July 2017, Prime Minister of Malta Joseph Muscat stated that Malta is going to become one of the first European countries to use blockchain technology in governmental sphere. First step will be the transfer of land registry and health-care sector on blockchain.

“We have to be on the front line of blockchain and bitcoin revolution… we have to be the ones others will want to copy”, Prime Minister said, being the leader of the country.

Muscat called upon EU countries’ leaders to adopt and use cryptocurrencies’ potential at the full scale. He also asked regulating authorities not to be afraid of this technology,which’s development is inevitable.

Today Malta government develops nationwide blockchain strategy which will accelerate implementation of bitcoin and blockchain in a large number of services. Strategy’s first variants are already accepted.

Silvio Schembri, Parliamentary Secretary for Financial Services, said that his dream is to make Malta «the Silicon Valley of Europe» through establishment of world’s bestconditions for development and commercialization of Fintech projects and innovations.

“Government must provide suitable regulatory framework, right tax system and best infrastructure on Malta…” “Prohibition and barriers lead only to the growth of blackmarket operations. It’s not in the best interests of society and sector on the whole. It’s best to establish transparent regulation to raise trust to the system”.


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Japan – a conservative nation that understands benefits of cryptocurrencies legalization

During the last couple of years’ Japanese government has consistently approved draft laws thathave led to bitcoin’s status as official currency and legal payment method for goods and services.As a result, a number of points of sale where you can officially pay with bitcoin has grown 5xtimes from 900 in 205 to 4200 in 2016, with trade turnover nearing 2 billion dollars.

By the end of 2017, the number of companies that officially accept payment in bitcoins canexceed 200 thousand.

At the same time, Japan preserves control over cryptocurrencies turnover. According to the newrules, implemented by Tokyo this year, any bitcoin or “alternative coin” fall under the oversightof Japan Financial Services Agency. It shows that the market is ready to operate in legalframework and follow AML / KYC in full extent, and the government can introduce changes if ithas enough will.

Initial Country Offering: How To Build Government-In-The-Cloud or Country-As-A-Service?

Government & Nonprofit

Transcript of Initial Country Offering: How To Build Government-In-The-Cloud or Country-As-A-Service?