DTA pumps brakes on blockchain

James Riley
Editorial Director

Government agencies should look at the actual problem they are trying to solve rather than jumping to embrace new technologies like blockchain, the Digital Transformation Agency has warned.

The DTA received $700,000 in funding in the last budget to investigate blockchain and its potential to assist with delivering government services.

It has since been working with a number of agencies to develop prototypes using blockchain to deliver essential services, including with the Department of Human Services for welfare payments.

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But for the most part, the DTA has followed other verdicts that blockchain is currently a solution looking for a problem.

“Our findings are consistent with the recommendations of other jurisdictions, international organisations and leading analyst firms. Our team found that blockchain is still an emerging technology and, when applied to various pilots or considered against alternative technologies, gaps become evident across both the technical and business facets of its implementation,” the DTA said in advice to government agencies.

“We recommend agencies considering technical solutions focus on addressing the needs of users and explore solutions to meet that need. Understanding user needs and understanding the tools, skills and systems required to build, host, operate and measure the solutions are both criteria under the Digital Service Standard.”

The DTA stressed that this “should not stop agencies searching for innovative ways to share and use data”.

It echoes the agency’s well-publicised comments at a senate estimates hearing last year where DTA chief digital officer Peter Alexander said that “for every use of blockchain that you would consider today there is a better technology”.

In a further government guide on blockchain, the DTA said agencies need to focus on the problems they are trying to address rather than emerging technologies like blockchain.

“Agencies should focus on problems they need to solve, rather than start from a specific technology solution. Agencies should continue to monitor blockchain developments, looking for opportunities to enhance service delivery that this technology may unlock in the future,” the DTA’s guidance said.

“The DTA believes blockchain is still an emerging technology and agencies should be pragmatic when assessing its application. The DTA supports agencies in finding new and innovative responses to challenges and blockchain may be part of future solutions. Agencies should objectively compare blockchain solutions to alternative technologies when solving business problems. The limitations of blockchain should be carefully weighed against any unique benefits provided by a blockchain-specific solution for government.”

The agency said there are other “more mature” technology solutions that can help agencies move beyond the “experimentation or prototyping to real-world applications”, and blockchain comes with its own specific risks.

This includes the fact that data cannot be edited or deleted from the blockchain.

“This makes it impossible to completely erase incorrect data, in the way a database record can be changed or deleted. This may cause significant issues, for example, if sensitive details are misrecorded against the wrong person or if the need arises to delete someone’s personal details,” the DTA said.

“Agencies must consider how their processes and procedures can account for this new way of thinking: when it comes to blockchain implementations, mistakes and their corrections, no matter how small or large, become available to all users with access. While in some cases this may be acceptable or even desirable, agencies must consider the possible risk to trust and agency reputation with this approach.”

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