Brian Forde, who previously served as the senior advisor at the White House Office of Science and Technology Policy, recently came on record claiming that Bitcoin technology could become a cornerstone of governance and public policy.
Forde no longer works for the White House and is now the Massachusetts Institute of Technology’s (MIT) director of digital currencies, but his views are still widely respected in government circles.
So far, governments have cautiously approached cryptocurrency. Generally, governments do not consider Bitcoin a genuine currency, but instead an asset of value that is worthy of legal protection and often subject to taxation. For now, it seems that most governments have not felt threatened by Bitcoin’s potential to offer an alternative government-free currency solution, though attempts to regulate digital money have been on the rise.
Forde’s comments, keeping in line with many recent comments made by leading investors and business leaders, have generally focused more on Bitcoin as a technological innovation, rather than as a currency or even investment vehicle. Many leaders have been rightly impressed by Bitcoin’s ability to be produced and regulated at relatively low costs by its own community. Many innovators and other leaders are now looking for ways to tap into the innovations spurred by Bitcoin.
Forde notes that Bitcoin’s low-cost and open-source protocol reaches out specifically to the people who need the government the most, including the poor, entrepreneurs and even government officials who struggle with security issues. The potential applications of Bitcoin is nearly limitless and could address vital issues and needs for the aforementioned communities.
There are even hopes that cryptocurrency-related technology could be used to create highly secured documents, such as tax forms and security clearance forms. Basically, a Bitcoin-like system could be set up to authenticate users and to transfer documents. Indeed, a ‘Bitcoin-based social security card’ could be created to give people a secure digital identity.
Forde also notes that Bitcoin eliminates double-spending and is essentially a network of transactions. Bitcoin is able to track every transaction ever made within its system and even the anonymous location of all coins in existence. Before the invention of this digital coin, monitoring transactions at such a scale of specificity required vast investments of labor, hardware and money.
Bitcoin has dramatically lowered the cost of doing so and many financial professionals believe it will revolutionize the traditional banking model. Forde claims that Bitcoin could be used to reach out to the billions of poor people who lack access to traditional banking services by offering low-cost payment and transfer options. The potential for Bitcoin-based technology to be used in poverty alleviation and empowerment has been noted elsewhere.
With public sector debt approaching absurd levels in many countries, figuring out ways to cut costs and increase efficiency as well as effectiveness could prove to be vital for governments. Further, growing online security issues are now threatening the national security of countries like the United States. If Bitcoin-based technology is able to increase security, then it could quickly become a valuable tool for the government.
For now, governments likely won’t rush to adopt Bitcoin-based technologies en masse. However, entrepreneurs and investors have been sinking increasing amounts of money into the Bitcoin sector, and that will likely lead to the development of new technologies and services. This, in turn, will help the whole community and Bitcoin tech ecosystem grow. And as the ecosystem grows, the chances of government adoption will increase.