The transforming potential of blockchain in the use of data

Most likely, most of us will know, or at least have heard of blockchain technology, because of its relationship with the most popular cryptocurrency nowadays - Bitcoin. However, blockchain is not a technology born solely to sustain this new digital economy, but like many other blockchain technologies its main purpose is storing and managing data chains in a decentralized and distributed way.

Blockchain has a number of features that that will make it a useful technology in several fields of application: privacy, (quasi) anonymity, integrity, trust distribution, transparency, security, sustainability and Open Source. While it is clear that its most widespread application so far is in the field of finance, and more specifically cryptocurrencies, it can also be very useful for many other areas, both within and outside of governments, particularly everything related to personal identificationor the protection of personal data through the decentralization of privacy.

Regarding the improvement of governments, blockchain can contribute in very diverse areas such as the provision of public services, the authenticity of public registers, the management of public sector data, the fight against corruption or the guarantees in the voting processes among others. There are also dozens of examples of entrepreneurs applying this technology to innovate in such important fields such as health or agriculture.

In short, blockchain is a technology with the potential to transform our political systems and at the same time enable relevant social changes. But, as happens also with any other disruptive technology and still in the maturation phase, not all are advantages and we will also find some disadvantages and limitations to be overcome, such as scalability problems, the high computational cost and interconnection that support the operations, the environmental impact associated with that cost, the excessive centralization of each chain or the high complexity of the cryptographic processes.

On the other hand, even though blockchain has quickly become a trendy technology  and despite the apparent simplicity of the underlying concept, it remains at the same time one of the most cryptic and misunderstood technologies as regards its potential beneficiaries. Therefore, in order for these decentralized data management technologies to become popular in the near future, it will also be necessary to face another type of entry barriers of a more structural nature related to the need for more training, an improvement in usability, greater capacity for institutional adaptation or the development of the necessary regulatory changes to support it.