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1 – 5 Oct 2017 | Orlando, FL

Blockchain Usage in Public Sector:


What to Do (and Not Do)
Terri-Lynn B. Thayer
Rick Holgate

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Ever Have
That Sinking
Feeling …?
Hype Cycle for Blockchain Business, 2017
expectations
Initial Coin Offering Private Distributed Ledgers (Blockchain)
Blockchain (in China)
Blockchain in Government Blockchain in Banking and Investment Services
Internet of Things
API Economy
Public Distributed Ledgers (Blockchain)

Quantified Self

Cryptocurrency and Blockchain Regulation


Blockchain in Education
Blockchain in Life Science
Blockchain in Insurance
Decentralized Autonomous Organization
Blockchain in Utilities
Blockchain in Healthcare Complementary Currency
Blockchain in Supply Chain Cryptocurrencies
Blockchain in Manufacturing Digital Commodity
Blockchain for CSPs Exchanges
Smart Assets
The Programmable Economy Blockchain-Based
ACH Payments
Smart Contracts
Digital/Cryptocurrency FIAT Stable Cryptocurrency Green Money
Ricardian Contracts Complementary Currency (Digital) Bandwidth/Airtime as Currency
Blockchain in Oil & Gas Blockchain in Retail Bitcoin
Blockchain for Customer Service
As of July 2017
Peak of
Innovation Trough of Plateau of
Inflated Slope of Enlightenment
Trigger Disillusionment Productivity
Expectations
time
Years to mainstream adoption: obsolete
less than 2 years 2 to 5 years 5 to 10 years more than 10 years before plateau

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From
2
"Hype Cycle for Blockchain Business, 2017" 10 August 2017 (G00332628)
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Strategic Planning Assumptions

By 2021, at least 5% of government entities will adopt blockchain


as a transparent, authoritative ledger for some official records.
By 2021, 30% of higher education institutions in the U.S., the U.K.
and Australia will be using a digital credentialing infrastructure
powered by blockchain.

Through 2018, 85% of blockchain-named projects will deliver


business value without using a blockchain.

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Key Issues

1. How should you approach blockchain?


2. What are some examples, with lessons?
3. How can you manage expectations?

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Key Issues

1. How should you approach blockchain?


2. What are some examples, with lessons?
3. How can you manage expectations?

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What is Blockchain, and Why is it Useful?
Sources of Value Types of Initiatives

Digital asset creation Blockchain


Disruptor
Payment token distribution

Distributed ledger of records


Digital Asset
Market
Immutability of records
Efficiency
Traceability of records
Play
Consensus mechanisms
Record
Smart contracts Keeper

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Significant Interest in Blockchain; Modest Action
Have already invested and deployed In short-term planning/actively experimenting
In medium- or long-term planning On the radar, but no action planned
No interest

All responses (n = 3138) 8% 14% 43% 34%

Education (n = 305) 5% 7% 47% 41%

Government (n = 460) 9% 13% 42% 35%

Source: 2017 Gartner CIO Survey


What are your organization's plans in terms of the following digital technologies and trends? Blockchain/Distributed ledger.
n = 3138

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Differing Industry Personas Relative to Blockchain
Government Education
 Many use cases  One compelling use case
 High expectations  Reserved…even threatened
 Overburdened  Values role as issuer/controller

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Eyes Wide Open

Myth Reality
Only for Financial Services … as Well as Other Industries and Use Cases

Transformation Is Occurring Mostly Proofs of Concept and Pilots Now

Disruptive Technology Disruptive Immature Technology

Cost Saving Projects … and Revenue Generating and Other Projects

Requires Governance and Community, and Incentives


Self Sustaining; Free
to Maintain and Sustain
Data Storage Is Unlimited; Limited Storage; Most Efficient
Works for All Kinds of Data With Small Amounts of Structured Data

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Understand Implementation Styles and
Blockchain Trade-Offs

Traceability &
Privacy & Irrevocability
Reversibility

Control Innovation & Testing


(Private Blockchain) (Public Blockchain)

Performance & Scalability Security


(e.g., Proof of Stake) (e.g., Proof of Work)
Permissioned Permissionless
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A Fluid Vendor Ecosystem, With No Clear Winners and
Blurry Categories
Infrastructure Software

Professional Services

Smart Contracts

Financial Services

Distributed Ledgers Boutique Services

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Key Issues

1. How should you approach blockchain?


2. What are some examples, with lessons?
3. How can you manage expectations?

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Permissioned Integration
 Consortia: Ask Yourself:
Canada's big banks testing
– Trusted identity fabric Toronto-based digital identity  Who Has Rights
network powered by blockchain
– Stock trades, issuances to Participate?

– Business registration,  Is Blockchain


permitting Needed?

– Healthcare  More Scalable,


More Customer
 Enterprise: Friendly?
– Supply chain  More Economical
– ERP integration, Than Alternatives?
consolidation
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Permissionless (?) Credentials

 Identity

 Education
Adopt Strong
 Citizenship
Governance;
 Licenses Be Realistic
 Qualifications

 Experience

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Blockchain Has Great Promise
as the Foundation for Digital
Microcredentials
 Represent smaller identifiable chunks of learning,
accomplishment, achievement or skill
 Granular, stackable, portable
Experiment with
 Must be transparent and durable
badging technology
 Offers employers additional evidence of abilities such as open badges
and blockchain and
 Who issues and controls? identify viable
 Promises trusted digital exchange of credentials ecosystem partners

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Education Experiments
Underway
 5th Global Math Challenge
 Central New Mexico Scope
Innovation
Evangelize
Candidates
Community College
 MIT – Blockcerts
Track Rank Evaluate Transfer

 Blockchain alone is not the


answer; also needed:
– A taxonomy and standard Scope, Track,
– A digital credentialing ecosystem Rank, Evaluate, …
And Many Others …

 Real Estate Transactions/ All Are Promising;


Land Registries Few Are in
Production

 Records
Experiment
Profusely …
 Voting
But Commit
Cautiously
 E-residency

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… and One Caution: Be Skeptical

Blockchain Will Automate All Functions of


Government

Blockchain to Eliminate
Global Diseases

Blockchain to Solve World Hunger


Blockchain: The Invisible Technology
That's Changing the World

Blockchain Will Ensure World Literacy;


Grant Degrees

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Key Issues

1. How should you approach blockchain?


2. What are some examples, with lessons?
3. How can you manage expectations?

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Engage Your Leadership
If They're Enthusiastic … If They're Skeptical …

 Educate and inform  Educate and inform


 Adopt bimodal:  Increase comfort
– Experiment  Identify a problem
– Give them what they want, without  Evangelize
breaking things
the
 Get involved benefits
 Create realistic expectations
 Mitigate the hype

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Set the Agenda

 Define your use case


 Define or find your population, ecosystem,
consortium (and governance)
 Start small
 Identify the implementation style
 Choose technology to fit:
– Platform, consensus mechanism, storage model
for associated data
 Prepare for change in technology
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Recommendations:
What You Shouldn't Do
 Succumb to excitement

 Be forced to do a project without adequate


explanation or justification
 Proceed without a well-defined use case

 Embrace the technology du jour

 Bet your organization on it


Recommendations: What You Should Do

 Determine if there’s a legitimate business need … and educate


your executive(s)
 Assess which vendors are talking to you about blockchain technology
and "carefully" analyze their capabilities and biases
 Select a limited and simple narrow-scope use case for real deployment
on a chosen platform
– … with a part of the enterprise with an appetite for experimentation
 Evaluate the results: Keep or discard?
 Engage in broader industry efforts (governance, standards, …)
 Prepare to migrate off the platform you selected for a PoC
(within 18 to 24 months of inception)
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Nimble Footwork

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Recommended Gartner Research
 Practical Blockchain: A Gartner Trend Insight Report
David Furlonger and Ray Valdes (G00325933)
 Toolkit: Government Use Cases for Blockchain
Rick Holgate, David Furlonger and Rick Howard (G00322833)
 Reinventing Education Credentials Using Blockchain as a Possible Missing Link for
the Open Badge Infrastructure
Jan-Martin Lowendahl and David Furlonger (G00302923)
 The Evolving Landscape of Blockchain Technology Platforms
Ray Valdes, David Furlonger and Rajesh Kandaswamy (G00315765)
 Understanding Blockchain Platform Architectures and Implementation Styles
David Furlonger, Martin Reynolds and Ray Valdes (G00323596)
 Blockchain: Managing Business Expectations
David Furlonger, Chris Howard and Ray Valdes (G00323666)
 How to Determine If You Need a Blockchain Project, and If So, What Kind?
Rajesh Kandaswamy and Fabio Chesini (G00320247)
For more information, stop by Gartner Zone.
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