The Guardian: The British government is exploring the use of blockchain technology to track where taxes go

Blockchain, the technology underlying the bitcoin currency, could potentially be used to distribute tax revenue more efficiently.

The British government is exploring the use of blockchain, the technology underlying bitcoin, to more efficiently distribute taxpayers' money to grants, Cabinet Office Minister Matt Hancock said on Tuesday.

Blockchain is a decentralized ledger verified and shared by a network of computers that can be used to record data and secure and verify transactions of various assets, such as currency or commodities.

More and more banks and other financial institutions are investing in blockchain technology, which they believe can reduce costs and increase the speed and transparency of operations.

Hancock said the government was looking at how blockchain technology could be used to manage and track the distribution of public funds, such as grants and student loans, which he said could "drive a new culture of trust".

Hancock said at a blockchain networking event in London,

"When new technologies come, the government cannot turn a deaf ear. In the past, the government has somewhat ignored the arrival of the Internet... and we must not let that happen again this time."

Matt Hancock

Britain's record on government IT systems is patchy. Previous IT problems have plagued the passport agency, the tax credit system and, most notably, the National Health Service, which was forced to abandon a multi-billion-pound plan to computerize medical records in 2011.

Hancock also warned against getting too caught up in the hype.

“Blockchain technology cannot solve all problems and cannot be applied to all aspects.”

Blockchain technology is still in its early stages: the first Bitcoin blockchain was created just seven years ago. Most financiers and technology experts believe that blockchain technology will not be widely adopted for another five to ten years. Many compare the current state of blockchain technology to the early stages of the Internet.

Just this year, the UK government's senior scientific adviser urged the government to explore how to use blockchain technology. The Bank of England has called blockchain technology a "key technological innovation" and has set up a team to study the application of blockchain, such as issuing central bank currency.