Will tokenization kill gov’t bureaucracy?

“Bureaucracy gives birth to itself and then expects maternity benefits.” – Dale Dauten

For centuries, government bureaucracy has been built on paper. From birth to death, we need a paper form or certificate signed off by some issuing authority for every significant milestone in between.

Most governments have moved to digital systems in recent decades, but these mostly mimic their paper-based predecessors. Endless signatures, stamps, and approvals are needed for everything from driving a car to getting married to opening a business.

However, scalable blockchain technology, tokenization, and a few associated technologies can revolutionize these systems. Let’s explore how and what new blockchain-powered systems might look like.

How tokenization might change things

Imagine a world where every government database merged into one and every license, certificate, or identity document existed as a token on a scalable public ledger. Every issuance, deletion, or transfer would be timestamped, and all documents would be verified as authentic by the cryptographic signatures of involved parties.

Example: The DMV issues your driver’s license, valid for 20 years. You sign it, the DMV signs it, and law enforcement can verify it as authentic automatically. It’s linked to your other blockchain-based records, such as your credentials, wallets, property deeds, and other certificates, meaning you can prove who you are to anyone at any time if you wish to do so.

In a blockchain-powered system like this, there wouldn’t be any need for endless paper shuffling, requests for information between government departments, and updates and renewals that take months or years to reflect reality.

Not only would everything be traceable to a single source, but information could be updated automatically when certain conditions are met. There’d also be total accountability, evidence of corruption and abuse of power, and most of the headaches associated with keeping track of endless documents and records would be eliminated.

Let’s look at a few examples:

Instead of wrangling with inefficient land registries, ownership could be transferred automatically when tokenized deeds are exchanged and relevant on-chain contracts are signed.

Driving licences could automatically expire and self-delete on a certain date. New ones could be issued automatically for a simple one-time payment in digital cash.

Welfare payments and pensions could be disbursed automatically, conditions on how they could be spent could be set, and any fraud or abuse could be discovered more easily.

When tokenized deeds, identities, licences, and contracts exist and move on a scalable public ledger, everything becomes more efficient and transparent. Suddenly, benefits stop when a person’s death certificate is cryptographically signed on-chain, and should that person vote a few years later, there’d be traceable evidence on the blockchain.

Outdated, inefficient bureaucracies would become protocols, and their slow, paper-heavy processes would become streamlined and automated. It doesn’t take much to imagine the cost savings and increased economic activity that would follow.

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Protocols alone aren’t enough

With entire government departments virtually eliminated or at least chopped down to fractions of their current size, what would happen to oversight? Unlike the fantasies of those who believe code is law, most laws would still exist, and many would be strengthened, but they’d be enforced differently.

There are a few prominent examples of where human oversight and intervention would still be necessary in a blockchain-powered, automated world.

For example, property disputes often involve nuance. They cannot be solved by code; automated welfare disbursements would still doubtlessly be abused, and appeals/corrections in all systems would still require human processes.

Tokenization can streamline and automate processes, but it cannot replace the law of the humans that write, administer, and enforce it. There will always be a place for humans, just fewer of them. Those who remain will be checking, auditing, and dealing with appeals.

No matter what systems are built, code cannot be held accountable. For this reason alone, humans must and will remain at the helm. A balance needs to be strictly between efficiency and oversight.

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A single scalable ledger is needed

Everything must occur on one scalable ledger for bureaucracy to evolve into a more efficient, automated form. Using private blockchains for each department is a fool’s errand that reintroduces the same problems and inefficiencies we have today—multiple sets of records and all of the errors, fraud, and blind spots that come with them.

What about privacy? Nothing about what tokens are or represent is visible to anyone other than the involved parties. While every transaction is timestamped on an immutable base layer, the tokens could represent anything.

With privacy technologies like Zero Knowledge Proofs, which allow token holders to verify details about themselves without revealing any other information, privacy could be enhanced with such a system.

For everything to work and for all of the benefits related to greater efficiency and transparency to be realized, one scalable public ledger must underpin everything. Data can live on overlay networks and private servers, but must be cryptographically linked to one set of records.

Ethereum, Solana, and the other popular blockchains of today won’t get the job done. They have failed to scale and, even on a good day, Solana can process 50,000 transactions per second, nowhere near enough to run the affairs of even one small country, let alone the world.

For this vision to become a reality globally, millions and then billions of transactions per second must be processed. Thankfully, such a ledger is available with the original Bitcoin protocol restored as BSV.

With one million transactions per second at fractions of a cent, full token and smart contract capabilities, and permissionless building within the bounds of the law, the BSV blockchain can serve as the base layer for the transparent, efficient tokenized world many of us dream of.

Even in a blockchain-powered system, bureaucracy won’t die completely. However, it will evolve, and the process will be much simpler, efficient, and transparent for everyone, bureaucrats included!

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Watch: New Token Protocol

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