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How agencies learned to stop worrying and love the blockchain

Jun 21, 20184 mins
BlockchainGovernmentGovernment IT

A little uncertainty is a small price to pay for the promise of better security.

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While it’s becoming the toast of the town in commercial IT circles, blockchain technology is just making its breakthrough in the federal government. Admittedly confusing (largely because it’s a comparatively new technology known to most through the Bitcoin application), government agencies are putting their doubts aside. Instead, they are leaning in to blockchain as a secure, decentralized and interoperable solution touted to reduce costs – all key drivers in IT procurement across the Fed.

The federal government can be slow to act in embracing technology (witness the lag time in cloud adoption between the private and public sectors). In blockchain’s case things are moving with all the quickness our risk-averse government can muster.

Almost a year ago, in July 2017, the GSA hosted its first U.S. Federal Blockchain Forum, which brought together 100 federal managers from a host of agencies to ponder the technology’s uses, limitations, and solutions. Agency teams submitted their own potential use cases for blockchain technology to GSA’s collection of nearly 200 submissions.

According to GSA, federal agencies are “eager” to get a handle on distributed ledger technologies like blockchain to improve transparency, efficiency and trust in information sharing. GSA cites wide-ranging applications for the technology, including:

  • Financial management
  • Procurement
  • IT asset and supply chain management
  • Smart contracts
  • Patents, trademarks copyrights, royalties
  • Government-issued credentials like visas, passports, SSN and birth certificates
  • Federal personnel workforce data
  • Appropriated funds
  • Federal assistance and foreign aid delivery

Federal blockchain requirements on the rise

Because of the applications that span all government agencies and missions, blockchain is showing up more in solicitations, either as the primary requirement, as a potential technology that could improve agency processes, or as an ancillary requirement.

For example, The Office of Personnel Management recently released a solicitation for an employee digital record, requiring blockchain compatibility. The Food and Drug Administration has requested information about using blockchain with the Sentinel System for medical product safety monitoring. In early June, the US Postal Service released a request for proposals international commercial air transportation, including requirements that would transition suppliers of these services to the blockchain network.

In terms of defense, the US Air Force has funded research into using blockchain to prevent its data from being changed by bad actors. This past May, the Defense Advanced Research Projects Agency (DARPA) awarded a grant for an encrypted chat program using blockchain in secure messaging service.

Blockchain clearly factors into IT budget thinking for defense. The fiscal 2018 National Defense Authorization Act (NDAA) required DOD to provide a briefing on blockchain as a cybersecurity application. More recently, the House of Representatives’ 2019 version of the NDAA (H.R. 5515) includes about 100 amendments, including one requiring the Defense Department to consider distributed ledger technologies like blockchain in assessing artificial intelligence development.

Better security, inside and out

The reason for the government’s interest is simple. Not to overstate it, but blockchain is awesome for security, both from external bad actors and internal threats.

At its core, blockchain has robust security basics. Unchangeable blockchain records ensure the integrity of information. If you can anchor the known good state of your information, you can return at any time and see if it has changed or not.

This demonstrable evidence of change can be used as a foundation for data and process integrity. And as security breaches in both the private and public sectors are becoming unfortunately more common, bracing IT infrastructure with additional security is of paramount importance for IT professionals across the board.

Beyond security of information, the additional uses of blockchain are numerous, and play into the government’s increasing use of IT to ensure a safe and simple user experience. Fraud detection and the “immutability” of documents and digital images are essential for things like electronic health records, which are being overhauled in government medical systems. And for government’s online payment systems – think things like electronic tax payments – cross boundary payment processing and reconciliation is of growing concern.

Ultimately, blockchain has the benefit of being able to exert security across organizational boundaries, which is at the heart of successfully implementing government’s shared services mandate. This is true not only for external hacks, but also to mitigate the growing incidents of insider threats.

Blockchain creates and stores audit trails, allowing any authorized person or system (from administrators and security officers, even to backup servers) to have clear insight into system changes and who made them. Armed with this information, attacks from inside or outside the authorized chain can be quickly detected, and future attacks can be prevented.

With all of this going for the technology, it becomes pretty clear why federal IT professionals have learned to stop worrying and love the blockchain. A little uncertainty is a small price to pay for the promise of better security.

Lloyd McCoy is a DOD manager with immixGroup’s Market Intelligence team. He is responsible for providing subject matter expertise on Department of Defense agencies, identifying business opportunities, and providing timely, relevant, and actionable intelligence to clients.

Prior to immixGroup, Lloyd worked for the Defense Department for eight years, serving in a variety of senior analytic and project management positions both in the U.S. and abroad. In this capacity, Lloyd worked extensively with the acquisition and procurement offices within the Office of Secretary of Defense.

Lloyd earned an M.S. in Strategic Intelligence from the National Intelligence University in 2011, as well as an M.A. in Public Policy in 2004 and a B.A. in Political Science in 2002, both from the University of Maryland.

The opinions expressed in this blog are those of Lloyd McCoy Jr. and do not necessarily represent those of IDG Communications, Inc., its parent, subsidiary or affiliated companies.