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US State Department Seeks Blockchain Boost Amid $10 Billion Reboot

The U.S. agency that oversees foreign affairs is looking seriously at blockchain.

That’s according to John Sullivan, U.S. Deputy Secretary of State, who encouraged the State Department and its private sector partners to embrace the technology as a way to “advance diplomacy and development objectives” at the Blockchain@State forum held Tuesday in Washington, D.C. 

Speaking to an audience comprised of other government agencies, members of the private sector and non-profits, Sullivan went so far as to suggest blockchain could be a key part of the massive restructuring of the department proposed by Secretary of State Rex Tillerson, who leads the agency.

Sullivan told attendees:

“This forum has implications for our ongoing redesign efforts. We’re interested to learn whether blockchain technology can have direct applications to many of the key features of our proposed redesign.”

Tillerson first proposed the redesign, which seeks to save as much as $10 billion over five years, in September. And while Sullivan acknowledged blockchain isn’t a “panacea” to the agency’s problems, he emphasized that he’s keen to see the technology used to improve internal processes and capture efficiency gains.

The forum explored numerous ways in which blockchains might improve core agency mandates such as administering foreign aid, promoting democracy and improving governance and political institutions in U.S.-allied countries.

With that, Sullivan (who was appointed by President Donald Trump and sworn in this May) urged the agency and its stakeholders to think hard about how the technology could be deployed in a diplomatic context to strengthen national security and promote greater economic prosperity.

Identity is in

And at least some industry participants are taking Sullivan’s encouragement to heart.

For instance, Joseph Lubin, founder and CEO of ConsenSys, the New York-based blockchain development firm that co-sponsored the event, argued that a blockchain-based self-sovereign identity scheme could have an immediate and far-reaching impact toward the agency’s goals, especially those that have to do with humanitarian aid. 

Lubin told CoinDesk:

“Once people own their own identity, then they’re less enthralled to their governments and less subject to adverse situations like natural disasters and wars. So, if someone is ejected from their country, if they’ve already established self-sovereign identity they can reconstitute their life.”

Other speakers at the event agreed, with Ashish Gadnis, CEO of BanQu, a provider of identity and financial services in developing countries, highlighting the importance of end users owning, controlling and possibly monetizing their personal data.

“All the aid we give to refugees is one-sided. This means that they are recipients of transactions from people like us, yet … they don’t exist because they don’t own or control their own data,” Gadnis said.

Sullivan also gave credence to the idea that blockchain could combat pervasive challenges in the area of foreign aid distribution such as corruption, fraud and the misappropriation of funds. He continued, saying these same challenges might not only be solved in aid distribution, but also in other areas, such as eliminating the corruption in government’s control over land title registries in the developing world.

While the concept of a blockchain-based self-sovereign identity has been a favorite of the industry, it’s a particularly hard problem to fix – one that some believe depends on how advanced smart contract technology becomes, another area Lubin called attention to.

In his mind, constructing international frameworks and treaties using smart contracts could serve as a means to combat the “free rider” problems associated with agreements like the United Nations or NATO, both of which deal with member countries frequently failing to fulfill their financial commitments with little consequence.

U.S. wakes up

Yet, the State Department’s forum comes amid increasing interest by government agencies throughout the world to understand and harness the technology. While some governments have moved to ban cryptocurrency and the tools that have come from it, most are taking a more open-minded approach.

“Blockchain technology is on the move around the world, so it is, therefore, essential that we better understand this cutting-edge technology as it becomes more ubiquitous in our economy,” Sullivan said, highlighting ongoing distributed ledger projects in Estonia, Georgia, Dubai and Singapore.

Sullivan’s bullish remarks, coupled with growing interest from the State Department and other agencies within the U.S. government, are being well-received by the blockchain community.

Not only was ConsenSys a presence at the forum, but distributed ledger consortium R3, enterprise blockchain firm BitFury and a handful of industry startups were in attendance.

“We’re particularly excited that the U.S. is waking up, big time, and realizing that this is a transformative technology,” said Lubin, adding that he hopes the country will emerge as a critical agent in advancing the technology worldwide.

Lubin said:

“There are other smaller players who are embracing this technology strongly, but we do want to see America get out in front of this and transform society with it.”

US flag image via Shutterstock

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US Centers for Disease Control to Launch First Blockchain Test on Disaster Relief

For public health practitioners, the ability to quickly collect, analyze and take action on data is paramount to containing the spread of a deadly new virus or disease.

But despite the advent of big data technologies, collecting this information today remains a highly cumbersome and time-consuming process, explains Jim Nasr, chief software architect at the Centers for Disease Control and Prevention, the arm of the U.S. Department of Health and Human Services tasked with combating the spread of preventive and chronic disease.

Now in search of a better solution, Nasr is eyeing a blockchain proof-of-concept he believes could facilitate the more rapid and reliable capture of epidemiological data in crisis situations.

The agency will discuss the concept, aimed at public health data surveillance, along with several other PoCs, at the Distributed: Health conference in Nashville on Tuesday.

“It turns out that there’s a lot of manual intervention involved and there’s a lot of time lost in this whole process,” said Nasr, adding:

“Right now, this is a situation that could literally take months to happen, but with the blockchain it could be done possibly in hours.”

Real-time data

Though one of a number of recently announced blockchain trials within the US government, the CDC’s announcement is nonetheless more notable due to high-profile operational struggles its seen in recent years. For example, the CDC was roundly criticized in 2014 for its sluggish response to the Ebola crisis in west Africa, when several unknowingly-infected patients were allowed travel back to the U.S.

To improve its ability to nip these types of crises at the bud, the agency sought to work toward more real-time data flows by breaking down data silos and developing more interoperability between systems.

“What it comes down to from a software perspective is to get as close as possible to real-time data delivery,” Nasr said. “If we’re at real time, or what I’d like to think of as ‘neo-real time,’ then the results that we’re getting are going to have an impact.”

But, Nasr explained, it turns out that achieving this real-time “nirvana” was far easier said than done:

“As we’ve done this, what’s become really evident is that the CDC was never designed to be a clearing house or some sort of Swift settlement area where the data comes in and we eventually sell [it off].”

So, instead of capturing and funneling disparate forms of data into a central registry to be pieced together, cleaned up, validated and then analyzed, the CDC is now looking to process this surveillance data by encrypting it directly from local sources onto a blockchain.

These transaction records would be made available to not just the CDC, but to other nodes – local public health agencies, hospitals, pharmacies – involved in the disaster relief efforts that would be involved in treating the at-risk patients.

“If I’m in Houston and I’m exposed to standing water for two or three days and potentially exposed to some deadly virus, through this process it could be determined that I need to take some vaccinations and some medication, and I can then provide the consent for that,” said Nasr.

Why blockchain?

Yet, at a time when many blockchain proofs-of-concept are still struggling to go live, the CDC believes there is real promise in its chosen use case.

The unique urgencies of a disaster response and the disparate nature of the actors involved – CDC staff, local governments, local health workers, contractors, etc. – means that a shared, decentralized and real-time record of truth has significant value over legacy alternatives.

Nasr said that experience has proven that his agency’s legacy data management systems aren’t up to the task.

“We have had Oracle and various other databases up the wazoo for many, many decades, and we’ve spent a tremendous amount of money on licensing and building these things,” Nasr explained. “And as you can tell, we’re nowhere near [what a blockchain solution might provide].”

Micah Winkelspecht, chief executive officer of Gem, an enterprise blockchain provider that with a focus on healthcare, reckoned that the parallels between the decentralized nature of disaster relief operations and blockchain make it a strong use case for the technology.

“I don’t know that a command and control solution really makes sense when we’re talking about real-time actors out in the field trying to work with immediate data,” he said.

“Ultimately, disaster relief is a distributed network,” Winkelspecht continued. “It’s a bunch of people on the ground who are really just trying to solve problems locally, and what they need is a really efficient way to share information and data with each other in order to do their jobs and to do it quickly.”

Gem has been in collaboration with the CDC on this and other blockchain PoCs, in addition to Microsoft, IBM and handful of others. The CDC hopes to make a final decision toward the end of the year as to which vendors it will partner with for the project.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has ownership stake in Gem. 

Flooding image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at [email protected].