Elon Musk’s Wild Blockchain Adventure: Is He the Next Digital Wizard?

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Well now, gather ’round, folks, for a tale of our time’s most curious character, Elon Musk, the man who has more dollars than sense—or so they say. This fella, who’s richer than Croesus, has taken a fancy to something called blockchain technology, claiming it could make our government run smoother than a greased pig at a county fair. Just last week, he was spotted chatting with the bigwigs of public blockchains, pondering how to sprinkle some of that digital magic dust on his new Department of Government Efficiency (or DOGE, as he whimsically calls it). But, as is often the case with Mr. Musk, the details remain as elusive as a cat in a room full of rocking chairs. 🐱

Now, if this blockchain business takes off in the good ol’ US of A—whether under the banner of DOGE or some other agency—what might it mean for the world of blockchain? Would it send other governments scrambling to follow suit, like ducks after a bread crumb? Might it be the spark that ignites a revolution in the global blockchain movement? 🤔

There are certainly some compelling reasons to believe that these public, tamper-proof digital ledgers could help keep tabs on government spending, secure data, and maybe even make payments without the usual bureaucratic hiccups. But let’s not kid ourselves; there are plenty of hurdles to jump over, like a three-legged dog at a dog show.

CryptoMoon, bless its heart, has taken it upon itself to unravel the tangled web of questions that have sprung up from these recent reports.

Would it even make a difference?

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Now, let’s assume we were to slap the accounts of a few US agencies onto these publicly accessible, immutable digital ledgers. Would that really make a difference in the grand scheme of government efficiency? Or would it be like putting lipstick on a pig? 🐖

Boris Bohrer-Bilowitzki, the head honcho over at layer-1 blockchain Concordium, had this to say to CryptoMoon:

“The right chain could certainly help streamline internal networks, revolutionize the government contracting process, and open a pathway to improved international payments and trade finance without going down the route of a central bank digital currency.”

He went on to say that the efficiency gains could be as significant as finding a dollar in your old coat pocket, thanks to new processes and structures that could sprout from this technology, “allowing for new savings down the line that aren’t really possible with current databases.”

John Deaton, the managing partner at the Deaton Law Firm, chimed in, saying, “Blockchain technology exists that could allow government agencies to record their spending on an immutable digital ledger. It’s more than feasible.” He claims it would not only save a pretty penny but would also “reduce rumors, speculation, conspiracy theories, and untruths while restoring public confidence and reducing corruption.” Now, wouldn’t that be a sight for sore eyes? 👀

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Musk’s recent blockchain discussions were as wide-ranging as a catfish in a river, according to Bloomberg, with visions of:

But let’s not get ahead of ourselves; applying blockchain to an enterprise as vast as the federal government is “an untested concept,” as they say. Where might we start this grand adventure? Deaton pointed a finger at the US Department of Defense, which has more departments than a cat has lives, suggesting they could benefit from blockchain technology, especially for supply chain tracking to keep the fraudsters at bay.

And let’s not forget the Internal Revenue Service, which could use a little blockchain magic for tax collection. Medicare and Medicaid spending would surely benefit too, along with other entitlement disbursements like welfare, Social Security, and military retirement payments. It’s a veritable cornucopia of opportunities! 🌽

Moreover, automated payments via smart contracts could be implemented, “reducing human error and improving efficiency,” Deaton continued, adding:

“Imagine real-time tracking of foreign aid by utilizing smart contracts for automatic release of funds when certain conditions have been met.”

Ernst & Young (EY), a multinational professional services partnership, has been working to bring blockchain technology to the public space for several years now. They even built a product specifically for that purpose called Public Finance Manager (PFM). Sounds fancy, doesn’t it?

“The idea is to be able to track the flow of funding and verify the outputs of public investment,” Paul Brody, the principal and global blockchain leader at EY, told CryptoMoon. PFM has been implemented by a number of global agencies, as well as the city of Toronto. 🍁

A blockchain can provide proof and verification at each step in the funding and spending process, bringing “a higher level of accountability into the procurement process — literally tracking every single dollar — and making it easier to link spend to results,” said Brody.

“I think the biggest ROI [return on investment] long-term solution comes from government procurement,” though implementing blockchain for some other uses, like document notarization, may be easier to do. “We already have a really compelling use case for smart contracts in private sector procurement.”

Working with clients like Microsoft, EY was able to cut the cost of contract administration by as much as 40%, Brody noted. “They [blockchains] automatically enforce key business terms like discounts and rebates.”

But let’s not kid ourselves; the reality is that government spending dwarfs everything else, and so “the impact and social benefit of automation, rigorous enforcement, efficiency, and accountability are multiplied many times over at scale,” Brody continued.

But surely there are impediments that will need to be surmounted? Like a mountain of mashed potatoes at Thanksgiving dinner?

“It’s not the technology that’ll hold back the idea,” commented Deaton, who once ran for the US Senate from Massachusetts and lost to Elizabeth Warren. He added:

“Career politicians will likely fight this tooth and nail. They don’t want the public to be able to see how every penny of taxpayer money is being spent.”

More education will probably be needed before blockchain can actually improve transparency, efficiency, and trust in US government operations, Naseem Naqvi, founder and president of the British Blockchain Association, told CryptoMoon. Citing the US Congressional Blockchain Caucus (2023), he claimed that fewer than 20% of Congress members engage in blockchain-related policymaking. Now that’s a head-scratcher! 🤷‍♂️

“For the USA, the first challenge — and opportunity — lies in informed education of policymakers on blockchain’s transformative impact,” Naqvi added.

The stakes could be enormous. “The lack of transparency in public spending results in an estimated 2%–5% of the world’s GDP — approximately $1.5 trillion to $2.6 trillion — being lost annually,” the British Blockchain Association leader said.

Now, the US has been a bit of a latecomer to the blockchain party, while more than a dozen countries — including the UK, China, India, Estonia, the United Arab Emirates, and Germany — have already put forward national blockchain roadmaps. Naqvi continued, “The UAE’s Smart Dubai project is saving the government $3 billion annually, eliminating 25 million man-hours and 411 million kilometers of travel processing every year.”

Meanwhile, Estonia has built its entire government infrastructure on blockchain, Naqvi recounted:

“Over the past decade, it [Estonia] has issued more than 400 million digital signatures, saving 1,400 years of working time and 2% of its annual GDP.”

From healthcare to property registries, digital courts, taxation, e-voting, and even e-Residency applications, “Estonia is setting a global standard,” Naqvi asserted.

Supercharging the blockchain sector

Still, the whole world seems to be closely watching each move the latest Trump administration is making. Estonia’s efforts are commendable, but they simply don’t command the global spotlight. 🌍

A project like the one Musk may be exploring, by comparison, has the potential to “supercharge the industry” while encouraging “more brilliant minds to focus on blockchain solutions,” said Concordium’s Bohrer-Bilowitzki. “It’s a non-partisan space with incredible potential to bring people on both sides of the aisle together to push the tech forward.”

“If the US government were to do this, it would be a powerful message that would spark similar actions around the world,” EY’s Brody predicted.

“There’s no doubt in my mind that eventually, almost all government spending will be on an immutable distributed ledger technology,” added Deaton. But will it happen in 10 years or 50 years? Only the timing is in doubt in his mind.

“If the US truly wants to lead the global economic race, blockchain must be at its core — not just for financial systems, but for the entire socioeconomic fabric,” concluded Naqvi.

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2025-01-29 19:29