A hackathon project has become a government pilot in Mexico where one of the first government tender is to take place this August on an ethereum based blockchain according to local media.
“The objective is to continue strengthening the prototype that was presented in April of this year, within the framework of Talent Land 2018, and to launch in August the model of governance of the public network,” Yolanda Martínez Mancilla, coordinator of the National Digital Strategy for Mexico, said.
The ethereum based blockchain does not use crypto. It is instead a public-private hybrid of sorts with three components, public, administrative, and services.
The public nodes are to be run by Mexican and international universities, as well as “civil society groups,” with the aim of this being a network owned by the Mexican people rather than the government.
The administrative nodes, however, seem to be the ones doing the validation, while service nodes are described as the ones managing encryption keys.
That doesn’t make very much sense, so what we think they mean is public nodes being the light nodes whereby you can connect to the network, administrative nodes being full nodes which undertake the validation and service nodes are probably the ones that decide which is a public or administrative node.
The showcase for this set-up is business bidding to provide services to the government in a tender. They kindly describe in some detail how this would work and we think its best to quote the full rough translation with cosmetic modifications:
“The public bidding process on a blockchain network involves the creation of several smart contracts, one for each phase of the smart contracting process. The first performs the registration of the Buyer Unit, that is, the public agency that intends to acquire a product or contract a service.
The second smart contract is that of registration of suppliers, in which the data of the companies that want to participate in one or several bidding processes are stored in the blockchain. Within this second contract, another is also executed that verifies the reputation of the provider according to the information registered in the network on the results obtained in previous bids.
A fourth smart contract is the one that allows you to store important information of a contracting project, from the registration of the project to the result of the tender. To carry out the award of a project, a fifth smart contract is executed, which evaluates the technical requirements of the proposals registered for a bidding process.”
We’re not very sure of that last part because we can’t see how a smart contract evaluates a project, but the design does sound a bit interesting.
Conceptually, the way this would work is probably like the trial of Canada’s government or that of the Brazilian State Bank.
That is, the tender information is entered into the smart contract and then everyone can publicly verify it, but the problem is that while they can see the information, they can’t be sure the entered information is correct.
It is thus more of a voluntary increase in transparency, with questions still remaining on whether they are not revealing something or whether they are incorrectly revealing something.
However, as there would be more parties than just the government involved, and in a rigorous set-up to ensure accuracy as well as independent verification, the level of trust can potentially be increased.
You could for example have the company itself enter the data, the government authenticate, and an independent third party audit or oversee both, with the results then publicly revealed and maintained for history to see.
In regards to that latter part, to have some confidence that past records are not changed like they can be changed in a database, the blockchain needs to be a public blockchain with many nodes as in a private blockchain set-up, collusion can be easy and secret.
Public blockchains, however, are not quite ready yet as sharding implementation in ethereum is needed first which might hopefully go live by 2020, so private blockchains for now are probably the appropriate testing ground for governments or companies to experience blockchain tech for themselves with some training wheels.