Blockchain is a type of distributed ledger technology. Instead of relying on one central database, it stores information across a network of computers. Each piece of data, called a block, is linked to the previous one, forming a chain. The design makes records hard to tamper with, because changes would have to be updated across all copies of the ledger simultaneously.

In Digital Public Infrastructures blockchain is sometimes proposed as a solution for identity, payment and data exchange systems. Supporters argue that it can create transparent, tamper-resistant records that reduce corruption and fraud. For example, a blockchain could record government subsidies or land ownership titles in a way that prevents later manipulation.

Benefits of Blockchain

Transparency and Trust: Public ledgers can increase accountability by making data visible and verifiable.
Decentralisation: Reduces resilience on central authority or single point of failure. This can help decentralise control over the DPI to a federated system of governance.
Security: The cryptographic design makes unauthorised changes difficult.

Risks and Limitations of Blockchain

Privacy Concerns: Blockchains are by default transparent, meaning sensitive personal data should never be stored directly “on chain”. Once published, it is irreversible and cannot be deleted or changed. Data Protection Officials have examined this problem and many argue it conflicts with basic data subject rights to request deletion and correction of personal data.
Scalability and Performance: High energy use and slow transaction times make some systems unsuitable for large-scale DPI. While some blockchains try to mitigate the energy problem, the performance issue often forces the systems rely on gateways that “cache” the blockchain. These gateways become new centralised points of control that nullify the benefits through the blockchain.
Complexity of the system: There are rarely problems for which blockchain is a suitable technology. Blockchain is not a prerequisite to implement Self-Sovereign Identity or Zero Knowledge Proofs. Achieving unlinkability and unobservability is actually harder in a blockchain architecture.
Governance Questions: Since blockchains are a distributed system, it becomes really important to clarify who controls and updates the system and its nodes. Theoretically blockchain technology can be suited for shared governance scenarios (local communities, private and public sector, etc.), but in practice the technology is far too complex to be operated independently by most organisations.

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Blockchain is really good for solving the problem of digital currency that protects against the uncontrolled copying of money. This created a hype that has lead many people to use blockchain for problems it is ill suited to solve. People that have invested in cryptocurrencies want (their) blockchains to be used so the value of their investment goes up.

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What to Ask as a CSO

Is there blockchain technology used in our DPI?
How much energy and water does it consume?
What is the governance of the system and who invented the particular blockchain?
What is stored on the blockchain and does this contain personal information?
If the system is distributed, who controls the other nodes of the blockchain? </aside>