SALT LAKE CITY — Let’s be clear. Blockchain is not Bitcoin and Bitcoin is not blockchain.

While blockchain, or distributed ledger, technology was first put to use as the platform for cryptocurrency back in 2009 when Bitcoin burst into the public domain, the potential uses for the system are much broader reaching. And some industry watchers believe blockchain-based applications, once perfected and broadly deployed, could be as game-changing as the invention of the internet itself.

Numerous private sector companies are already putting blockchain to work in non-cryptocurrency applications. They include Walmart, which uses a blockchain platform to track produce from grower to store shelves; Accenture, which is building blockchain solutions for insurance providers; shipping giant Maersk, which tracks its almost 800 cargo vessels using blockchain; and MedicalChain, a U.K.-based effort that is using blockchain to store, secure and manage patient medical files.

And three places across the country — including Utah County — are testing the waters with the technology to see if it can help secure American elections.

So, what is blockchain?

Even a nontechnical accounting of how it works can become mind-numbingly complicated in fairly short order, but there are some simpler analogies.

First, note there are three central pillars upon which blockchain is built: Decentralization, transparency and immutability.

To further decipher, no single person or entity controls it; everyone can see it; and no records within the chain can be added, removed or altered without the consent of everyone on the network, i.e., it’s very, very secure.

The robust nature of blockchain technology has formed the basis for a cryptocurrency market that now has something in the neighborhood of 3,000 different iterations. Much of the debate and commentary on these virtual currencies has been focused on the speculative nature of the currencies’ valuations and less so on the blockchain platforms on which they exist. However, the platform is a distinctly different and separate thing from the currencies it can be used to support.

Meg Alderman, a senior consultant with multinational accounting firm Deloitte, used email as a way to illustrate how the blockchain, or distributed ledger, technology works.

You (a node) have a file of transactions on your computer (a ledger.) Two government accountants (verifiers) have the same file on their computers (aka, distributed.) As you make a new transaction, your computer sends an e-mail to the accountants to inform them.

Each accountant rushes to be the first to check whether you can afford it. The first to check and validate the transaction hits “reply all,” attaching their logic for verifying the transaction. If the other accountant agrees, everyone updates their file, which in this analogy would become a new block on the chain.

What’s missing from this analogy for the blockchain is an accounting of the very high level of encryption that takes place, one that secures and timestamps the transactional information in a way that would be extremely difficult to compromise, both due to its complexity and the nature of the network. Because, on the blockchain, everyone is watching.

Utah County tests the blockchain waters

That level of security convinced Utah County Clerk/Auditor Amelia Powers Gardner that a blockchain-based digital voting platform could vastly improve how her office was accommodating overseas voters.

“Things went very well,” Gardner said. “Previously, overseas voters used snail mail, which can be very unreliable depending on where you are, or email, which requires waiving rights to a secret ballot and lacks a way to verify security and voter identity.”

Gardner explained the digital system allows voters to use their smartphones to cast a remote ballot, which is secured via the blockchain network and results in a printed ballot that is counted along with other, traditionally submitted ballots. The system leverages biometric security on the voters’ phones and allows individuals to both verify their own ballots and even perform an audit of the entirety of the votes cast via the platform. While the sample was small in the last primary election — about 60 people registered to use the Voatz system — the participation outpaced the rest of the county’s turnout numbers.


What Is Blockchain? For Starters, It’s More Than Cryptocurrency

Utah County utilized Voatz, a blockchain-based online voting system to process ballots from overseas voters in the last primary election.
Voatz

The system worked so well — earning a 38% voter participation rate against the 24% that voted via the current vote-by-mail system — that Gardner anticipates it will be more widely deployed in the upcoming general election so that, in addition to out-of-country voters, it will be an option for those with disabilities that make completing and mailing a paper ballot or coming to a polling station difficult.

For the moment, Gardner does not believe the blockchain platform is a tenable method for the entire voting system and noted current Utah statute does not allow for online voting, except in very limited and defined circumstances. But, she said she can envision a time when it could become a more widely available option.

“I think the technology is still a little premature for broad use,” Gardner said. “But, with changes to state law and continued clean audits, I can see it becoming more possible.

“Elections are a sensitive issue, and any time you are moving into new technology, it’s appropriate to move slowly and with assurity throughout the process.”

Utah County is one of just three jurisdictions across the country that have deployed a blockchain voting option, though numerous U.S. election authorities are considering making blockchain voting an option under certain circumstance.

Security, surety and trust when it comes to elections

The company behind the Utah County remote voting, Voatz, is also one that has attracted the investment attention of Overstock.com subsidiary, Medici Ventures. Last year, Julie Smith, Medici’s director of research and business development, told the Deseret News that Voatz’s business goals jibe perfectly with her company’s interest in efforts that embrace “both a social mission as much as an economic potential.”

“The voting space is an area we are very passionate about,” Smith said. “It’s perfect for (blockchain) technology to be able to create a more secure, auditable and trustworthy means to operate our democracy.”

Voatz CEO Nimit Sawhney said that while Voatz and cryptocurrencies like Bitcoin and Ethereum share the characteristic of functioning from a distributed ledger platform, there are notable differences that were engineered specifically to work with election systems.

“We had to build a network that was open and also addresses the concerns of election officials,” Sawhney said. “While access to the network is permissioned, it’s also open in the sense you can see what is happening, but to participate (as a verifier) you have to go through a vetting process. Potentially, every voter could be their own auditor in the background.”

Sawhney also highlighted that the Voatz system creates a paper ballot in addition to its digital records. The system creates three levels of verifiable redundancy with a receipt that goes to the voter, a printed ballot and the secured data in the blockchain. It actually establishes a higher level of accountability and transparency than systems currently in use across most of the country.

On Tuesday, the FBI released a statement about its investigation into an attempt made last fall to hack the Voatz app being used in a West Virginia election. The attempted intrusion was spotted by Voatz administrators who referred the matter to law enforcement authorities.

According to the FBI, “there was no intrusion and the integrity of votes and the election system was not compromised.” A CNN story indicated the attempt may have been made by University of Michigan students who were part of an election security class.

“The Voatz system worked as designed and intended,” Sawhney said. “The attempt was detected, thwarted at the gate and reported to the authorities. We fully support the West Virginia Secretary of State’s Office and the law enforcement agencies in their investigations under the purview of the law.

“Given that our elections infrastructure is classified as critical infrastructure under the Department of Homeland Security, we will continue to report any such attempts in the future.”

If it has value, it can live on the blockchain

Voting is just one of numerous potential uses for leveraging the security and decentralized authority of blockchain platforms. Personal identity protection, land/vehicle title management, insurance, food safety, contracts, medical records and much more are all potential pathways where blockchain could create efficiencies and heighten security.

Dave Fletcher, Utah’s chief technology officer, is the point person for, among other things, the state’s exploration of whether and how to best put blockchain technology to use. That work became more focused recently following the passage of HJR19 in the 2019 session. The resolution formally recognized “the potential benefits and applications of blockchain technology” and directed a legislative committee “to study and make recommendations regarding the potential benefits and value of blockchain technology, including potential uses in state government.”

Fletcher, whose department also oversees cybersecurity for the state’s digital systems, said there are numerous potential uses for blockchain technology, and Utah is among the leaders in the U.S. for exploring how it could be deployed. However, he noted that making wholesale changes can be challenging due to both time and cost associated with revamping legacy systems and methods. And he said there continues to be negative associations among those who do not see the distinction that divides blockchain technology from cryptocurrencies.

“We see lots of possible applications,” Fletcher said. “But people continue to confuse (blockchain) with cryptocurrency. Once we can get past that, there are some big potential benefits.”

One of those could be converting the system of vehicle title tracking to a blockchain platform, Fletcher said. Currently, those certificates that validate the ownership of a vehicle are handled by numerous entities, including the state, banks and lending institutions, insurance companies, fleet owners, businesses and individuals. It’s complicated, messy and exactly the kind of system that could be much improved via a blockchain solution.

Fletcher also noted systems that require a verifiable chain of custody, like the handling of evidence in law enforcement cases and tracking product soon to be produced by Utah’s licensed marijuana growers, could also be managed and secured with a blockchain program.

However, Fletcher, like Gardner, believes the time arc to potential adoption of the new technology will likely not be a short one.

“It’s still a little bit on the horizon,” Fletcher said. “I think in the state of Utah you’re probably not going to see deployments for two to five years for significant applications.”



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What Is Blockchain? For Starters, It’s More Than Cryptocurrency
What Is Blockchain? For Starters, It’s More Than Cryptocurrency
What Is Blockchain? For Starters, It’s More Than Cryptocurrency
What Is Blockchain? For Starters, It’s More Than Cryptocurrency

What Is Blockchain? For Starters, It’s More Than Cryptocurrency

What Is Blockchain? For Starters, It’s More Than Cryptocurrency