Evidence to Policy

Beyond a single point of truth

Distributed Ledger Technology, what is it and why should you care?

Maybe you’ve heard of BitCoin, digital mining of ‘money’ and how jittery nation states are getting about this new(ish) FinTech innovation? Here I examine how government, researchers and industry are coming together to understand how to utilise, apply and monetise DLT.

Put simply Distributed Ledger Technology (DLT) avoids the need for a dataset to have a single point of truth by instead developing trust between all users of the data. It establishes trust by allowing all users to see all edits, in effect replacing trust with transparency. In current networked systems a single point of trust is accessed by authenticated users. In a DLT networked world all users trust each other removing the need for a single, trusted source of data. This removes the frailty of the single repository being corrupted and increases the speed of data transfer as it doesn’t need to come from one source. To illustrate this consider how the DVLA holds driver data: when an insurance company needs to access that data it contacts DVLA, is authenticated, the data is shared and the insurance company adds the DVLA data to its existing record of the driver. In a DLT model the DVLA no longer holds the data, instead all driver information exists in a block chain that any insurer can edit, as indeed the DVLA can. Figure 1 provides a useful visualisation of how this might look (credit: Blockgeeks ). Clearly this throws up some questions about security, privacy, data ownership, role of government to name but a few. But don’t worry those questions (and many others) have been and continue to be asked.

Way back when, deep in the mists of time, when Sir Mark Walport was the UK’s Chief Scientific Officer (circa January 2016, which seems like a world away), he published a report called ‘Distributed ledger technology; beyond block chain ’, which aimed to consider some the questions above. Unofficially this paper acted as a spot light bringing DLT out of the shadowlands of Bitcoin and dark web geekery and into the world of government wonkery. The report was broad in its scope including a primer on what exactly DLT is, how governance and regulation may need to adapt, implications for security and privacy, DLT’s disruptive potential, its applications in government and the global perspectives on DLT.
With this new innovative technology illuminated for all to see and peppered with exuberant language like “In distributed ledger technology, we may be witnessing one of those potential explosions of creative potential that catalyse exceptional levels of innovation”, it’s no wonder that what happened next, did happen.

As is the temptation with new technology which is heralded as being game changing - people instantly started considering how their game could be improved. Suddenly DLT became seen by many as a panacea to any and all urgent problems. How can the central banks hope to regulate BitCoin? Develop your own block chain equivalent, of course! How do I ensure that my communications are secure? DLT can fix that! Could the DVLA securely be informed of drivers changing health conditions? You could with block chain! While my examples are fictional and frivolous, the energy and excitement that they represent is very real. Pedestalised, but barely understood, DLT stood for a moment like a colossus, its shadow cast across all government departments. And then came the dreaded question: ‘So how is this actually going to work in practice?’

Step forward the Cabinet Office’s Open Innovation Partnership (OIP). OIP acts as a conduit between the academy and government, offering an opportunity for policymakers to work side by side with leading academics to ensure they have impartial, evidence led context to support the policymaking process. OIP sensed that a cross departmental approach was required rather than departments seeking a multitude of independent solutions to similar problems. Government needed to reach out to the research community and work with the technology rather than talk to itself from within the confines of departmental government structures. While the OIP readied government for these conversations they simultaneously pulled on their networks to identify, contact and bring together the UK’s leading DLT expertise in one room.

Alongside the University of Southampton’s Director of the GCHQ/EPSRC Academic Centre of Excellence for Cyber Security Research Professor Vladimiro Sassone I recently attended a gathering of the ‘DLT community’ at HM Treasury which brought together researchers and policymakers. Discussion focused on what applications DLT has for government, how to regulate it for industry and how in practicality the research community could help shape and support this process. Carried out in a free form networking session this event offered policymakers from DfID, FSA, FCO, HMT, Home Office and others the opportunity to talk to and exchange contact information with world leading researchers. Discussion bubbled with talk of academic secondments to work on use cases, research proposals to widen and deepen the knowledge base and potential spin outs from Higher Education Institutions that could go on to create jobs and growth.

As the session came to a close, we came together to consider what the next steps should be. The conversations had been fruitful and attendees wished to continue in the free form way they had been conducted. More frequent meetings were problematic due to varied locations of participants, Skype was dismissed as being unsuitable for multiple conversations, Slack was deemed not secure enough. Finally group email was chosen as the least bad communication channel to continue a general thread and allow small groups to peel off and talk amongst themselves privately.

I couldn’t help but think that we could have done with a DLT solution.

Gareth Giles

Public Policy|Southampton

@Gybees236