The term “blockchain” remains a mystery to many, but its potential is extremely intriguing, particularly as applied to the government contracting industry.
As reflected in the 2018 National Defense Authorization Act (NDAA) ( H.R. 2810), the federal government is cautiously entering the blockchain waters. This blog post will first attempt to explain what blockchain is, and then will review some of the government’s efforts to understand how blockchain can improve its business processes.
Holland & Knight attorneys Shawn Amuial, Josias Dewey, and Jeffrey Seul recently authored The Blockchain: A Guide for Legal and Business Professionals. The book explains the blockchain concept in a readily understandable manner:
Blockchain is a distributed ledger existing across many computers that can record transactions or other data. The transactions are mined into blocks and each block is given a unique hashtag that is copied onto a subsequent block, which form a chain (hence, the term blockchain). Changes to the blockchain are very difficult because the blocks are chained together and distributed across a wide network.
This technology – distribution of data over multiple computers that is linked together and has a unique identifier – is of particular interest to the government contracts industry. For example, blockchain technology potentially may produce “smart contracts,” which would be virtually self-executing and self-administered. It may also be useful in tracking supply chains or distributing energy. The Government accordingly is studying blockchain technology, especially whether it is resistant to cyber-attacks.
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