Cryptocurrency for Government

Several months ago, a friend told me that bitcoin would be an interesting currency to invest in.  After seeing the rise of this cryptocurrency I certainly had a mild interest, but was ultimately satisfied that I had stayed on the sidelines when the value plummeted.  The price of bitcoin, and many other popular cryptocurrencies, has rebounded, but it remains one of the most volatile forms of payment this side of the Venezuelan bolívar.

There are takes regarding the benefits and the fragility of bitcoin coming from every direction, reaching to cable news, HBO programs, parody shows, and more.  CNBC calls it the equivalent of the dot-com crash unfolding at 15 times the speed.  This doesn’t mean that these currencies are necessarily in trouble, but it does leave reason for skepticism.

The underlying technology for cryptocurrencies, blockchain, certainly has potential.  Using blockchain, which is essentially an unchangeable data set stored across many users, governments can have a canonical record of taxes, land records, and more.

The much more volatile side of this technology, cryptocurrencies, currently includes four states that are working on bills to allow citizens to pay their taxes with the alternative money.  While this would be a novel and convenient way for many to pay taxes, there are caveats such as the need to convert the currency into US dollars quickly so as to avoid governments holding an unpredictably valued money.

State governments’ acceptance of a new technology can certainly be viewed as a positive, although it’s fair to wonder just how many citizens will be taking advantage of any changes that are made.  Additionally, any large scale changes such as this need to be weighed against the cost of infrastructure improvements needed to accommodate the change.

In the end, there are issues to be worked through, but several appealing aspects to cryptocurrencies, including both an increase in privacy and security.  At Extract, these are two qualities we value greatly in our software.  We keep your information behind your firewall and redact your constituents’ private information automatically to ensure public records can remain accessible to the larger population.

If you’d like to learn more about how we do this, or to see a demo of our software, please reach out today and we’ll get right back to you.

