Could Blockchain Technology Innovate Cities and Restore Public Trust?

National League of Cities on Preparing To Use Blockchain For Digital Transportation Infrastructure Needs As Autonomous Vehicles Are More Broadly Deployed In Cities

From the distribution of government benefits, to transportation, alternative energy and even healthcare, a new report released today by the National League of Cities (NLC), “Blockchain in Cities: Restoring Transparency and Trust in Digital Transactions,” shows how blockchain could potentially be used to transform cities by increasing the effectiveness, efficiency and capabilities of public services.

“At a time when the fast-pace of technology challenges public trust, leaders need solutions tailored to an increasingly digital world,” said National League of Cities (NLC) CEO and Executive Director Clarence E. Anthony. “Blockchain technology could be the foundation of many solutions because it is transparent, seemingly hack-proof, efficient and economical.”

Best known as the platform technology that makes cryptocurrencies like Bitcoin possible, blockchain software is a shared digital database that stores and transfers data across the internet. Transactions that occur in the context of a blockchain are safe, instant and have little or no transaction costs.

What’s special about the blockchain model is that it connects computers and the transactional data they share in a way that is both efficient and secure. Think of a log or spreadsheet filled with accurate information that is accessible to any number of computers. This shared data is automatically and continuously updated, but nearly impossible to corrupt.

“The opportunity for cities to utilize blockchain across municipal operations can help drive innovation,” said Brooks Rainwater, senior executive and director of NLC’s Center for City Solutions. “This technology could revolutionize diverse sectors of our economy and bring efficiencies of scale that previously required large, centralized operators in order to have an impact. Imagine decentralization, coordination and collaboration in a secure and autonomous way.”

Some examples of current blockchain innovations city leaders should consider include:

• Using blockchain to expand digital inclusion initiatives that help support the unbanked and underbanked individuals who lack sufficient access to deposit accounts and rely on non-banking services to pay bills and access government benefits.
• Exploring options for using blockchain in governance, procurement processes and business licensing.
• Considering blockchain to increase civic engagement and offer additional pathways for voting.
• Investigating how blockchain can help strengthen local alternative energy initiatives.
• Preparing to use blockchain for digital transportation infrastructure needs as autonomous vehicles are more broadly deployed in cities.

Overall the report encourages city leaders to pay attention to the experiences and lessons learned from cities that are exploring blockchain, and to keep an open mind to the changes blockchain could bring forth.

The National League of Cities (NLC) is dedicated to helping city leaders build better communities. NLC is a resource and advocate for 19,000 cities, towns and villages, representing more than 218 million Americans.