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  • Writer's pictureEvîn Cheikosman

The Innovative GAO: The Government Accountability Office Releases New Report on Blockchain Tech

Updated: Feb 25, 2023

With so much happening in the world, you may not have noticed that the United States Government Accountability Office recently released a “Technology Assessment” report on blockchain. The report struck a realistic note, starting with its title: “Emerging Technology Offers Benefits for Some Applications but Faces Challenges.” Below is the BL4SG Center’s analysis of a few highlights from the report.

Easy Introduction to Blockchain Technology

The report is written in layperson terms and uses graphics throughout. For example, Figure 2 in the report is a flowchart for determining whether blockchain may be useful for a particular need. The California Blockchain Working Group published a similar “decision tree,”1 which creates an easy on-ramp for those who might be intimidated by the high learning curve of decentralized technologies. 

The GAO spoke to a wide variety of stakeholders2 to build this comprehensive assessment and considered innovative issues such as the emerging use of blockchain technology in carbon credit markets.3 The report is well organized with four “policy options” suggesting ways to “enhance benefits and mitigate challenges”: (1) standards, (2) oversight, (3) educational materials, and (4) appropriate uses.4 The report emphasizes the non-financial applications of blockchain in an accessible way through use of “vignettes.”5 We do not often see these practical non-financial use cases in media narratives, and this report reinforces the critical idea that blockchain is not all “crypto.”

Policy Option 2: Educational Materials

From the BL4SG Center’s perspective, the policy option recommending the development of educational materials is one of the most exciting aspects of this report, as it encourages policymakers to become involved in promoting community education of blockchain. The GAO recommends that current blockchain education could be expanded if policymakers supported the development of educational materials:

“Instructors could use the educational materials to develop vocational training that may help establish professional development courses and certifications in sectors affected by blockchain. It could also increase consumer literacy and help reduce negative public perceptions of blockchain (6).”

The report noted that expanding blockchain education would likely require new resources or allocation of existing resources. But this investment could pay off with the creation of innovative research and development projects(7).

The BL4SG Center applauds the GAO for highlighting the importance of expanding educational opportunities in blockchain technology. This is, of course, central to our Center’s mission. Note to GAO authors: get ready to hear from us about potential collaborations!

Recognized General Barriers to Mass Adoption of Decentralized Technologies.

The GAO recognized the problem of regulatory uncertainty for both government policymakers and industry participants in the of the blockchain ecosystem. For regulators, it is difficult to “determine how to regulate applications that use decentralized protocols (8).” For organizations that want to apply blockchain in their operations, these legal and regulatory uncertainties create legal risks. The GAO also referenced technical hurdles, such as the lack of blockchain interoperability, as a barrier to mass adoption (9).

Called Out Workforce Challenges

The need for blockchain education is especially important because there are just not enough workers who are skilled in blockchain. The GAO report noted that this gap is causing problems for government agencies who “have faced challenges in hiring, managing, and retaining staff with digital skills because of a limited pipeline of candidates (10).”This is a major issue facing federal, state and local government agencies around the country. The GAO cited to their prior report calling for a creative solution to the workforce problem: a “Digital Service Academy,” but it is unclear whether there is enough political will to move that concept forward. Pro tip to those in government considering this idea: include forgiveness of prior student loans for Digital Service Academy participants!

The Digital Service Academy is creative, but there are additional ways to encourage learners, particularly mid-career changers and younger generations, to pick up the skills required to work in this space beyond traditional degrees. For example, tax incentives and government grants for “Web3 boot camps” would incentivize those who are concerned about the financial implications of signing up for a new educational program. Academic centers geared toward blockchain that offer research and training, such as our first-of-its-kind Blockchain Law for Social Good Center, could also fill some of this gap.

Considered Fairness/Equity/Financial Inclusion Concerns

The GAO report did not devote an entire section to ethical issues, such as fairness, equity and financial inclusion. Nevertheless, these issues are sprinkled throughout the report, especially in the context of digital exclusion. For example, the report’s authors noted:

  1. “[B]lockchain can introduce new challenges such as exclusion of those people who do not have internet or computer access(11).”

  2. “Digital exclusion. As with other non-blockchain solutions, a lack of internet access may prevent participation. Internet access in the top 10 coffee-exporting countries has been reported to range from 19 to 70 percent of the population (12).”

  3. “Remote voting using a blockchain system—like electronic voting in general—requires access to specific hardware. Voters with lower rates of digital literacy or lack of internet access may be disadvantaged (13).”

There are many layers underlying the digital exclusion problem in the United States, and a full understanding of these layers is a matter for a different report. Even so, it is encouraging to see policymakers appreciate that the potential of emerging technologies cannot be shared widely unless we level the digital playing field.

In Summary

Why are these reports worthwhile? It is always a good idea to follow the policy evolution of government officials, especially in the fast-paced blockchain space. But the GAO report is noteworthy because it appreciates the benefits of blockchain technology while recognizing that more needs to be done—particularly in terms of community education, regulatory clarity, and financial inclusion—before the advantages of this new technology are available to all of us.

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