Jun Journal of Open Innovation: Technology, Market, and Complexity

(2018) 4:7
DOI 10.1186/s40852-018-0086-3

RESEARCH Open Access

Blockchain government - a next form of

infrastructure for the twenty-first century
MyungSan Jun

Correspondence: ulcaman@gmail.
com Abstract
BlockchainOS Inc., Seoul, Republic
of Korea Today, more than 100 blockchain projects created to transform government systems
are being conducted in more than 30 countries. What leads countries rapidly initiate
blockchain projects? I argue that it is because blockchain is a technology directly
related to social organization; Unlike other technologies, a consensus mechanism
form the core of blockchain. Traditionally, consensus is not the domain of machines
but rather humankind. However, blockchain operates through a consensus algorithm
with human intervention; once that consensus is made, it cannot be modified or forged.
Through utilization of Lawrence Lessig’s proposition that “Code is law,” I suggest that
blockchain creates “absolute law” that cannot be violated. This characteristic of blockchain
makes it possible to implement social technology that can replace existing social
apparatuses including bureaucracy. In addition, there are three close similarities
between blockchain and bureaucracy. First, both of them are defined by the rules and
execute predetermined rules. Second, both of them work as information processing
machines for society. Third, both of them work as trust machines for society. Therefore,
I posit that it is possible and moreover unavoidable to replace bureaucracy with
blockchain systems. In conclusion, I suggest five principles that should be adhered
to when we replace bureaucracy with the blockchain system: 1) introducing
Blockchain Statute law; 2) transparent disclosure of data and source code; 3)
implementing autonomous executing administration; 4) building a governance
system based on direct democracy and 5) making Distributed Autonomous
Government(DAG).

At the time I initially planned to investigate the subject of blockchain technology and
government, I could not imagine that so many blockchain projects were underway in so
many countries. Moreover, the speed of expansion of government-led blockchain projects
worldwide is astonishing. For example, Estonia has used blockchain technology to issue
e-ID for identity verification for their citizens. Additionally, electronic voting systems based
on blockchain are being built in many countries including Ukraine, Estonia, and Australia.
Honduras and Georgia attempted to introduce blockchain technology to manage their land
registers. The United States is working to incorporate blockchain technology to record and
share medical information, and the UK is pursuing research and development to apply
blockchain technology to public services.1 China has announced plan to build a
“Blockchain city,” based on blockchain technology.2 In addition, more than 100 blockchain
projects are being conducted in more than 40 countries around the world. IBM reported
that nine in 10 governments will invest in Blockchain projects by 2018.3
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Jun Journal of Open Innovation: Technology, Market, and Complexity (2018) 4:7 Page 2 of 12

Various blockchain projects led by governments

Actually, there are so many projects that are conducted by governments. One can see the
projects driven by governments around the world in the tables below.4 Table 1 contains
various projects conducted by governments except voting system and digital currency
projects. Table 2 contains the electronic voting system projects based on blockchain, and
Table 3 contains the digital currency projects based on blockchain around the world.
(Please note that not all projects are listed. There are much more projects than listed in
tables below.)
What leads countries to rapidly initiate blockchain projects? In this article, I will argue
that it is due to blockchain technology being directly related to social organization. Unlike
other technologies, a consensus mechanism forms the core of blockchain. Traditionally,
consensus is not the domain of machines but rather humankind. However blockchain
operates through a consensus algorithm with human intervention. Consensus algorithms
work every moment when the blockchain decides what data should be regarded as genuine
and therefore stored in the blockchain. Blockchain has a structure in which all the partici-
pants validate the data and all the participants store the original version of the verified data.
Therefore, once the data is confirmed, which is synonymous with consensus being
made and data stored in blockchain, it cannot be modified or forged.5 Blockchain is a
cutting-edge social and physical technology that simultaneously makes possible an im-
mutable and tamper-proof system. Thus, blockchain is an optimal technology for deal-
ing with public data that should not be forged. However, the blockchain is not simply a
data storage technique. With the smart contracts feature that comes with blockchain
technology, it goes much further that it has the potential to replace existing social
organizations.

Social technology
I think it would be helpful to adopt the concept of ‘social technology’ to understand the
features of blockchain technology. To understand the concept of social technology, we first
must distinguish between two kinds of technologies; “physical technology” and “social
technology”. In addition to physical technology, which involves the transformation and
modification of things with engineering and scientific knowledge, there is another kind of
technology that we can call “social technology.” The concept of social technology comes
from the analysis of Richard Nelson and Katherine Nelson6 who distinguished physical
technology from social technology. In short, Social technology is defined as ways to
communicate, cooperate, compromise, and make consensus with other people. Social
technology contains the division of labor, social institutions, and decision making process in
communities. Social technology refers to the technology that directly affects the structure of
society, systems, social relations, and individual interactions. Social technology is a concept
that allows us to identify and analyze these features of technology.
However, physical technology and social technology are also interwoven. Physical tech-
nology influences social technology and enables the construction of new social technol-
ogy.7 For example, Internet technology allows people to communicate together
immediately, regardless of their physical locations. Therefore, some smart people have en-
deavored to develop unpreceded physical technology to improve existing social technolo-
gies or to make a new social technology. (I think the effort of Satoshi Nakamoto who
invented the blockchain technology8 is an exact case of these kinds of efforts.)
Jun Journal of Open Innovation: Technology, Market, and Complexity (2018) 4:7 Page 3 of 12

Table 1 Examples of government-led blockchain projects

Nation Project Status
Australia Australian senators launch parliamentary Announced in August 9, 2017
friends of blockchain group.
The Australian Securities Exchange (ASX) Announced in December, 2017.
announced that they will use blockchain The proposed transition is
technology to clear and settle trades by expected to take place in March
replacing the outdated Clearing House 2018.
Electronic Subregister System, also known
as CHESS.
China Social security funds management system Announced in 2016
Mortgage valuations on blockchain Announced in 2016
Blockchain-based asset custody system Successfully executed more than 100
(PSBC) real business transactions on the
blockchain since the system went live
in October 2016
Blockchain city project (By Wanxiang Group) The project was announced by Wanxiang
Group in 2016 and backed by Chinese
government
Dubai Government documents management Ongoing
system to be enacted by 2020
Global blockchain council (GBC) was Ongoing
established in 2016 with 32 members,
including government entities,
international companies, leading UAE
banks, free zones, and international
blockchain technology firms
Digital passport based on blockchain Announced in June 2017
Real-time information system about Announced in 2017
shipments to Dubai
Estonia eID (electronic ID management system) The government is currently upgrading
the existing system with blockchain
technology.
E-health (medical information management The government is currently upgrading
system) the existing system with blockchain
technology.
e-Residency (a first-of-a-kind a transnational Since 2015, more than 27,000 people from
digital identity) 143 countries have applied and 4272
companies have been established as of
December 2017
France French government has adopted new rules Announced in December, 2017
that will enable banks and fintech firms to
establish blockchain platforms for unlisted
securities trading.
Ghana Land title registry project by NGO “Bitland” Ongoing
Georgia Land title registry project Ongoing
Honduras Land title registry project Announced in 2015 and known as failure
now
Kazakhstan Announced that they will make the most Announced in July 17, 2017
favorable business climate for cryptocurrency
and Financial technology(Fintech)
Russia Blockchain based documents management Announced in 2016
system announced by Moscow government
Russia’s ministry of health is launching a Announced in Aug 10, 2017
blockchain pilot
Singapore Cross-border interbank payments A proof-of-concept project has been
initiated in 2016.
Sweden Trials of a blockchain smart contracts Tested in early 2017
technology for land registry
Jun Journal of Open Innovation: Technology, Market, and Complexity (2018) 4:7 Page 4 of 12

Table 1 Examples of government-led blockchain projects (Continued)

Nation Project Status
Switzerland The city of Zug (the capital of the canton of Since July 2016 (Crypto Valley was
Zug) started accepting bitcoin as payment for named by Ethereum co-founder Mihai
city fees. The large number of companies Alisie)
engaged in cryptocurrency are located in
Crypto Valley in Zug
Zug offers blockchain-based digital identity Announced in 2017
to their residents
The United Arab The central banks of the United Arab Emirates Announced in December, 2017
Emirates and and Saudi Arabia announced that they would
Saudi Arabia launch a pilot initiative that two institutions
test a new cryptocurrency for cross-border
payments.
Ukraine E-vox (Ethereum blockchain-based election Announced in 2016
platform)
Blockchain-based auction system Announced in 2016
United The UK government’s Department of Work Announced in July 2016 and successfully
Kingdom (UK) and Pensions tested an experiment in which a finished trail system
blockchain system is used to distribute welfare
payments.
Blockchain as a service for each government Available since August 2016
department
Blockchain-based digital currency UK’s Financial Conduct Authority (FCA)
permitted blockchain startup, Tramonex,
to issue digital money
Blockchain-based payment system between Announced in 2017
banks
United States Pilot project for secure exchange of personal A two-year agreement for the tests was
(US) health data online announced in 2016
Approving plan to issue stock via Bitcoin’s Announced in 2015
blockchain (Securities and Exchange
Commission)
Arizona bill to make blockchain smart Officially became state law in March 29,
contracts “legal” 2017
Governor of Delaware has officially signed a Announced in July 2017
bill making it explicitly legal for those entities
to use blockchain for stock trading and
record-keeping.
Illinois launches blockchain pilot to digitize Announced in Aug 31, 2017
birth certificates

Indeed, the history of humankind has been interwoven with the development of
technology. In twenty-first century society, individuals do not interact directly
through the face-to-face communication. It is now common that technology medi-
ates the interactions of individuals. We now use technologies everyday such as
email, BBS, mobile messages, messengers, SNS etc. In this sense, the nature and
characteristics of technology that weaves between individuals and individuals, indi-
viduals and groups, or groups and groups become an important subject. We are
now facing Blockchain technology.
The reason why blockchain is expected to change social organization is because
it can replace the role played by existing social technologies including the bureau-
cracy, the most elaborate and dominant organization form in modern society.
Jun Journal of Open Innovation: Technology, Market, and Complexity (2018) 4:7 Page 5 of 12

Table 2 Electronic voting systems based on blockchain around the world

Nation or Organization System Name Base Technology Application
Abu Dhabi Securities – – Shareholder voting
Exchange (Stock Exchange) system
Australia Postal Service – Digital Assets Digital voting of
Holdings Victoria government
Denmark Liberal Alliance Follow My Vote Graphene Blockchain Ballot system for
Framework political party
Estonia i-Voting KSI National voting system
London Stock – Hyperledger Shareholder voting
Exchange(LSE) system
Moscow government – Ethereum Digital voting of
Moscow government
Nasdaq – – Shareholder voting
system
Podemos (Spain) Agora-Voting Bitcoin Ballot system for political
party
Texas Libertarian Party VoteWatcher (by Blockchain Florincoin Blockchain Ballot system for political
Technologies Corp) party
Ukraine E-vox Ethereum Voting system for various
voting
Utah Republican party Blockchain Apparatus Smartmatic (private Ballot system for political
blockchain) party

Weak coercion, strong coercion, and absolute coercion

Here, however, a new problem arises. Because of the ways in which technology medi-
ates individuals, individuals interact with each other in ways defined by technology.
That is, new technology allows individuals to interact in an unprecedented manner,
while also restricting them to interact within the limits of “the specific way that the
technology allows.” This implies that technology can be considered a coercive force
that restricts individuals’ activities.
Particularly in our era, the coercive force of technology should not be treated trivially.
We are moving to an automated algorithm society9 based on artificial intelligence
coupled with big data already. Algorithms are composed of logic and control. An algo-
rithm society is a society wherein the coercive force of algorithms is generalized in soci-
ety as a whole. The software that implements the algorithm is not merely a collection
of strings written in a software language, but an enforcing constraint that specifically
limits how individuals behave and how they interact within these technologies. There-
fore, Professor Lawrence Lessig formulated the proposition “Code is Law” or “Code as
Law” to capture this idea.10
Blockchain is also an algorithm implemented by software. In particular, the Smart Con-
tracts11 feature, which is regarded as the greatest potential of the blockchain, makes it
possible to set rules that define conditions for executing pre-defined contracts automatic-
ally.12 In other words, because of the nature of the blockchain that prevents it from being
hacked or faked, the code of Smart Contracts in blockchain has a coercive force. Block-
chain makes it possible to build an “absolute law” that cannot be forged or violated.
Therefore, I distinguished three types of coercion: weak coercion, strong coercion,
and absolute coercion. The coercion in the laws of the real world is a “weak coercion.”
It is a type of coercion that can be violated if you choose to violate it, such as ignoring
the red light when crossing the road. The enforcement that is implemented in the
Jun Journal of Open Innovation: Technology, Market, and Complexity (2018) 4:7 Page 6 of 12

Table 3 Digital currency projects based on blockchain

Status Nation Status
In use Barbados Launched a blockchain-based version of the Barbadian dollar in 2016.
Tunisia Upgraded the e-dinar with blockchain based technology in 2016.
Senegal Launched a blockchain-based version of the eCFA(digital currency) in 2016.
This currency will be used as the official currency of The Western African
Economic and Monetary Union.
Pilot testing or Canada ‘Project Jasper’ phase II was started at December 2016 and announces phase
considering 3 of ‘Project Jasper’ DLT Trial in October, 2017.
China Completed a trial run of digital currency in January 2017.
Denmark Planning to Introduce E-Krone based on blockchain in February 2017.
England Approved the digital currency issued by fintech company in 2016.
Estonia Estcoin, a government backed cryptocurrency, announced in August 2017.
France Tested blockchain technology in October 2016.
Germany Tested blockchain technology in December 2016 with Hyperledger blockchain
technology.
India Finished testing blockchain solutions for core banking processes in the country
in May 2017.
Japan Japanese banks are planning to introduce a digital currency for the 2020
Tokyo Olympics.
Netherland Preparing an ambitious experiment aimed at discerning if an entire financial
market can be built on a blockchain and testing a prototype “DNBcoin.”
Russia Developing a national digital currency based on Ethereum in June 2017.
Singapore Completed the first phase of that pilot in March 2017 with the Private
Ethereum Blockchain.
South Africa Planning to Introduce national digital currency based on blockchain in
February 2017.
Sweden Considering the possibility of issuing blockchain based digital currency in
November 2016(no update as of December, 2017).
Ukraine The central bank began working on a blockchain-based system in November
2016 to develop a “cashless economy” and expanded and reinforced the team
in December, 2017

software code is a strong coercion because the law implemented in the software is diffi-
cult to violate. For example, in 2007, when the presidential election was held, Korea’s
No. 1 internet portal Naver, who was afraid of the conservative party, blocked the com-
ment field of political news articles. Therefore, netizens in Korea were unable to com-
ment at all on political news. They abruptly lost the space where they had expressed
their political views or opinions so far. (I think everyone may have experienced similar
situations where they could do or could not do something depending on the functions
implemented in Internet services.)
Thus, individuals can only engage in activities that are allowed by the Internet ser-
vices. Internet services are built by software, so we can say that software exerts “a
strong coercive force” on individuals’ activities. The law implemented on software is
significantly stronger than the law written on paper.
The blockchain goes one step further and is an example of “absolute coercion.” A
blockchain cannot be tempered or forged, and therefore, the rules implemented on a
blockchain cannot be changed. If we consider the code to be law, the blockchain allows
the implementation of “absolute laws” that no one can violate. Blockchain can be the
beginning of an entirely different phase in the history of laws. Furthermore, with this
Jun Journal of Open Innovation: Technology, Market, and Complexity (2018) 4:7 Page 7 of 12

feature, the blockchain makes it possible to ensure “absolute trust” in society. We

should note that trust has never been guaranteed absolutely before blockchain technol-
ogy emerged throughout human history.
In terms of social devices that ensure trust in society, we find three kinds of trust ma-
chines in history: the reputation system, the state including government and bureau-
cracy, and the blockchain technology.

Three types of trust machines in human history

I distinguish here the three trust machines, or social devices, of human history that
allow people to believe in and act with each other.
The first trust machine is the reputation system. This system is invisible, but regardless is
functional in our daily lives. Particularly in primitive tribal communities with a small population
of a hundred or so, the role of the reputation system was significantly more important than
anything else. We can say that the primitive tribal communities are the pure peer-to-peer soci-
eties where everyone can interact with face-to-face communication. Through anthropology and
brain science research, Robin Dunbar presented the famous Dunbar’s number, 150,13 indicating
the number of people who can know each other well and live together with close intimacy. This
scale indicates the number on which a reputation system can effectively operate. The reputation
system is now a part of our daily lives, particularly in our social network.
However, beyond this number, the reputation system does not work in ordinary lives, be-
cause there is no reputational information about others. Therefore, when the number of
community members exceeds the Dunbar’s number, 150, society needs another trust ma-
chine to ensure the trust of the extended community. This second machine in human his-
tory is the state composed of the government and the bureaucracy that has been introduced
for this purpose. There are many arguments about the origin and role of the state and gov-
ernment, but I think that their ultimate role is to guarantee trust in our society. In fact, the
state guarantees trust in society by taking complete responsibility for jurisdiction, security,
diplomacy, and national defense. Historically, if the trust in society collapses, the dynasties
or political powers that have operated or dominated the state or nation also collapse and be-
come replaced with others. Therefore, the most fundamental role of the state and govern-
ment is to ensure the trust of a large community that cannot be maintained by a reputation
system alone. The bureaucracy can be said to be the execution tool of the state and govern-
ment to ensure trust in society.
The third trust machine, blockchain technology is emerging now.14 Blockchain
technology ensures trust among anonymous individuals. Someone said that blockchain
is the technology that creates the real peer-to-peer society. Interactions among people
in the twenty-first century are more likely to be mediated by technology than face-to-
face communication. So, peer-to-peer in twenty-first century means that the interac-
tions of individuals are mediated not by other people, other companies, or other
organizations but by technologies. Therefore, it is easy to understand if we translate the
word “to” in “peer-to-peer” as “technology.” In other words, it would be correct to
interpret peer-to-peer as “person-technology-person,” or as “technology-mediated
human interaction.” In the era of blockchain, we must reinterpret the meaning of “to”
in “Peer to Peer” as “Trust technology.” We can say that the era of blockchain is one
where people (peer) connect and interact with each other using trust technology.
Jun Journal of Open Innovation: Technology, Market, and Complexity (2018) 4:7 Page 8 of 12

With the emergence of blockchain technology, the role of the state and the government
that has functioned as a trust machine until now are bound to change and the mode of
operation of bureaucracy will consequently change as well.

The nature of bureaucracy

The analyses of bureaucracy, so far, have focused on its moral and emotional aspects
such as its inhuman characteristics or inefficiency. If you study bureaucracy only as an
inhuman tool or in terms of efficiency, you will not be able to grasp why bureaucracy
emerged in society. Additionally, you will also be unable to grasp how bureaucracy
survived in human society for thousands of years despite the heavy and severe criticism
it received. In addition, this view makes it impossible to see the essential role that
bureaucracy plays in society, which also makes it impossible to see how its role will
change in the future, especially in the era of blockchain.
I define the nature of bureaucracy as a social technology that works as an “information
processing machine” for the community to which it belongs. In other words, bureaucracy
is a social technology dedicated to the distribution and processing of information that is
needed in a specific community. This is illustrated by the fact that the first bureaucrats
recorded in history in the world were “scribes” in Sumer; scribes were people who
recorded and managed various kinds of information on tablets. They made a lot of tablets
with their early letters, which provide information of lending, debt, interest, and so on.15
Why did they have to write down the lending, debt, interest? It was an effort to maintain
the trust of society in the extended community. In a large community where a reputation
system does not works as a trust machine, the society can not maintain trust unless some-
one is managing these information. Therefore, bureaucracy is not an organization for
charity, cooperation, or innovation, but an “information processing machine” that pro-
cesses all kinds of information according to predefined laws. The primary role of bureau-
cracy is to produce and circulate information forcibly within a large community.
There are close similarities between the blockchain and bureaucracy. Bureaucracy is
very similar to the tasks performed by computer systems. First, both of them are de-
fined by the rules and execute predetermined rules. The blockchain technology is, of
course, a kind of computer system and works according to the predetermined rules.
Therefore, it is theoretically not problematic to claim that the blockchain technology
would replace the role of bureaucracy. Second, both of them work as society’s informa-
tion processing machines. Third, both of them work as trust machines. Therefore, I
think that not only is it possible to replace bureaucracy with the blockchain system, but
that it is unavoidable.
In addition, the blockchain technology make it possible to implements the “absolute
law,” so it can process information more efficiently and accurately than does the
bureaucracy. In addition, Smart Contracts can automate the administrative process.
New bureaucratic systems based on blockchain technology would be faster, more
secure, more accurate, and more efficient than traditional bureaucracies. This is why it
is inevitable that the current bureaucratic system based on human activities will be
replaced by a new system based on blockchain. This is why so many projects are being
driven by the governments of over 40 countries within a span of 2 years.
Blockchain technology can act as a precise technology that can replace the bureaucracy,
because it can create, store, and process information with safety and non-falsification.
Jun Journal of Open Innovation: Technology, Market, and Complexity (2018) 4:7 Page 9 of 12

Furthermore, blockchain technology can handle existing governments’ tasks significantly

more faster and efficiently. I will call a government that uses blockchain technology as a
key instrument in its work a “Blockchain Government.” If this concept of a blockchain
government is realized, our society will undergo revolutionary changes. Blockchain
technology is a really innovative technology that can transform the very basis of our
society.

Blockchain government
I suggest the principles for implementing a blockchain-based government system.
The first principle is the “Blockchain Statute law.” Blockchain technology ensures “absolute
coercion,” thus enabling the creation of a law that cannot be violated. We can put this law
on the blockchain and allow it to run automatically with Smart Contracts. We have already
discussed how the code is law. It means that we should treat the rules written on the soft-
ware as a level of law. The concept of Blockchain Statute law should now be introduced,
since blockchain enables “absolute law” that cannot be tampered or violated. In addition, this
is the only way to prevent society from falling into a catastrophe with unintended mistakes
or bad intentions, particularly in the era of the Fourth Industrial Revolution16 wherein we
cohabit with living things everywhere.
The second principle is “transparent disclosure,” or open source strategy. The scope of
the disclosure here contains from the blockchain software code itself that constitutes the
public infrastructure to the data contained in it. They must be disclosed to the maximum
extent possible. The Government 2.0 guide, formulated by the Australian government,17
already claims that all data, excluding the data having clear reasons for non-disclosure,
should be disclosed. In addition, since the blockchain technology is a distributed ledger, it
is suitable for disclosing and sharing information. There are two other reasons for claiming
“Transparent disclosure.” One reason why blockchain software should be disclosed is that
it is necessary for everyone to be able to verify the laws embedded in the code. The other
reason is that open source strategy is the best way to make software more secure and to
encourage the development of an ecosystem.
The third principle is the implementation of “An automated process.” This would allow
us to build a significantly faster and more efficient government system. The automation of
government administrative systems using Smart Contracts is already being conducted in
several places. We do not need to be afraid of the automation of government administrative
systems because it is possible to manage the laws implemented in the blockchain with the
consent of all the community members. This leads to the following fourth principle.
The fourth principle is to build “A direct democratic governance system.” Many pro-
jects have already been implemented to rebuild existing voting systems using block-
chain technology worldwide, but we can think beyond the voting system we have
known so far. The laws that are implemented in the blockchain can be determined and
revised through a consensus process involving all community members. In other words,
we can build a mechanism that allows to modify “the law” stored in the blockchain
automatically through democratic voting and consent of all community members.
Several blockchain projects that aim to overcome the shortcomings of Bitcoin or Ether-
eum blockchains are attempting to implement automated revision with the consensus
of the participants of the blockchain network.18 Although it is not easy to apply this
Jun Journal of Open Innovation: Technology, Market, and Complexity (2018) 4:7 Page 10 of 12

feature to the current administration system, we can apply this feature to the Block-
chain government in the near future.
The fifth principle is building a Distributed Autonomous Government (DAG). If all
of us, the entire community, participates and provides consent for government laws
through a consensus process, and make it run on a blockchain automatically, we can
create a government that is completely different from existing governments. It means
that it is possible to construct a government system as a social operating infrastructure,
as an information processing machine of the community that executes automatically
and whose rules are decided with the consent of the whole community. Such a govern-
ment can be termed DAG.

Conclusion
It can be said that the blockchain technology will be a great tool for social innovation
not only for the enhancement of the effectiveness of government but for the innovation
of society from the grassroot. But blockchain is not a fully developed technology but an
emerging one. We need more time to harness the full potential of blockchain technol-
ogy, and several tasks must be solved. Here, I suggest the tasks that need to be im-
proved or supplemented in the future.
The first is to ensure the integrity of the program. We have experienced that there is
a loophole in Ethereum’s Smart Contracts with “The DAO” project.19 Therefore, it is
necessary to find a way to supplement the shortcomings of Smart Contracts. Several
projects such as BOScoin, Tezos, Qtum, EOS and Cardano are aiming to find alterna-
tive ways to build a more secure and efficient Smart Contracts platform.
The second issue is to introduce a governance feature, a consensus mechanism involving
all network participants, in order to modify and revise the blockchain algorithm itself. This
function is introduced now in newly designed blockchains such as Tezos, BOScoin and
Cardano. I think that these new concepts of Blockchains will form the third wave of block-
chain technology.
The third issue is performance. Bitcoin processes transactions approximately four
times per second, and Ethereum can only process transactions nine times per second at
most. It is difficult to expand the usage of the blockchain technology without increasing
the processing performance. Fortunately, many different algorithms have been devel-
oped now to improve the performance of blockchains significantly. Therefore, it is a
matter of time before we can solve the performance issue.
The fourth is to make it possible to accommodate the private data in public blockchains,
such as personal identity (sex, age, name, address and etc.), health record, private keys, or
ownership of assets. Ordinarily, the data in public blockchains is made transparent to every-
one; therefore, it is almost impossible to accommodate private data in it. However, if we
plan to use blockchain technology widely including for identification, secret ballots, health
record management or so, we need another technology, such as Zero knowledge proof,
Multi-party computation, or Homomorphic Encryption algorithm, that can handle the
secret and private data in the blockchain. Several projects, such as Zcash and Zcoin are
currently attempting to develop this technology.
Finally, there may be an epistemological repulsion towards the idea of an automated
system based on blockchains replacing our familiar public domains, such as bureaucracy.
It is necessary for society to admit that these kinds of transformation are inevitable and to
Jun Journal of Open Innovation: Technology, Market, and Complexity (2018) 4:7 Page 11 of 12

conduct open discussions to reduce the fear and side effects of introducing new and revolu-
tionary technologies.

Endnotes
1
Walport 2015.
2
Rizzo 2016.
3
Higgins 2017.
4
Jun 2017.
5
Swan 2015.
6
Nelson and Nelson 2002.
7
Dougherty 2017.
8
Nakamoto 2008.
9
Kang 2014.
10
Lessig 2000.
11
Buterin 2014.
12
Tapscott and Tapscott 2016.
13
Dunbar 1993.
14
Berkeley 2015.
15
Robson 2000.
16
To understand the features of Fourth Industrial Revolution, see Hang Sik Park (2017).
17
Australian Government 2009.
18
Bitcoin has not been able to improve performance for many years because the
miners could not reach consensus on how to improve the algorithm. Ethereum also
experienced same problem when The DAO accident happened. This resulted in the
separation of Ethereum and Ethereum Classic. This allowed for two consensus block-
chain algorithms: one for the data, and the other for the rules implemented in the
blockchain. This mechanism is already being implemented in new blockchains like
Tezos, BOScoin, Dfinity, Cardano, etc. See MyungSan Jun (2017).
19
Siegel 2016.

Acknowledgements
Not applicable.

Funding
Not applicable.

Availability of data and materials

Not applicable.

Author’s contributions
Not applicable.

Author’s information
MyungSan Jun graduated with a bachelor’s degree from the Division of Sociology, Seoul National University in Korea In 1995.
He has worked in the IT industry for 20 years including Cyworld, the world’s first successful social network service (SNS). He
published a book, From the State to the Village in 2012, which analyzed the communication structure of twenty-first century.
This book was selected as an “Excellent literary book” in 2012 by the Ministry of Culture and Tourism, Korea. He also writes IT
columns for various journals in Korea. In 2017, he published his second book, Blockchain Government, in Korea in which he
investigates the relationship between the government and blockchain. He now works for BlockchainOS Inc., a blockchain tech
company.

Competing interests
Blockchain, Governance, Digital economy, Open Innovation, Smart Contracts.
Jun Journal of Open Innovation: Technology, Market, and Complexity (2018) 4:7 Page 12 of 12

Publisher’s Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Received: 12 October 2017 Accepted: 23 January 2018

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