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Download Link Distributed on Social Media) Could Be Used to Forge Ballots at Scale UC Berkeley Connected Communities Title Blockchain in California: A Roadmap Permalink https://escholarship.org/uc/item/2j9596dp Author Crittenden, Camille Publication Date 2020-07-01 eScholarship.org Powered by the California Digital Library University of California California Blockchain Working Group Members Chair of the Blockchain Working Group Camille Crittenden, CITRIS and the Banatao Institute, University of California Three appointees from the technology industry Brian Behlendorf, Linux Foundation Audrey Chaing, Blockchaing David Tennenhouse, VMware Three appointees from the non-technology-related industry Ben Bartlett, Berkeley City Councilmember Meredith Lee, West Big Data Innovation Hub Anne Neville-Bonilla, California State Library Three appointees with a background in law chosen in consultation with the Judicial Council Jason Albert, Workday Liz Chien, Ripple Labs Inc. Michele Neitz, Golden Gate University School of Law Two appointees from privacy organizations Arshad Noor, StrongKey Sheila Warren, World Economic Forum Two appointees from consumer organizations* Radhika Iyengar-Emens, DoubleNova Group The State Chief Information Officer Amy Tong, California Department of Technology The Director of Finance Keely Bosler, Department of Finance Ted Ryan, designee i The Chief Information Officers of three other state agencies Benjamin Bonte, Department of Industrial Relations Sergio Gutierrez, California Environmental Protection Agency Kem Musgrove, Franchise Tax Board One member of the Senate Senator Robert M. Hertzberg Freddie Quintana, Office of Senator Robert M. Hertzberg Cynthia Castillo, Office of Senator Robert M. Hertzberg Charles Loudon, Office of Senator Robert M. Hertzberg One member of the Assembly Assemblymember Ian Calderon Voleck Taing, Office of Assemblymember Ian Calderon Michael Magee, Office of Assemblymember Ian Calderon *Contributions were provided by Kai Stinchcombe who withdrew before the completion of this report. ii Table of Contents i. List of Blockchain Working Group Members ..........................................................i ii. Table of Contents ................................................................................................... iii iii. Introductory Letter, Blockchain Working Group Chair ........................................v I. Executive Summary and Recommendations ..................................................... 1 II. Legislative Charge and Working Group Process .............................................. 13 III. Blockchain and its Defining Characteristics ..................................................... 17 IV. Considerations for Appropriate Application ..................................................... 23 A. Framework for assessing the fitness of blockchain .................................24 B. Ethical considerations ................................................................................27 C. Digital identity .............................................................................................32 D. Cybersecurityand risk management ........................................................40 E. Privacy infrastructure ..................................................................................46 F. State Information Technology staff perspective .....................................53 VI. Potential Application Areas ................................................................................ 58 A. Vital records.................................................................................................59 B. Health records .............................................................................................65 C. Supply chain ................................................................................................72 1. Food and agriculture .......................................................................73 2. Pharmaceuticals ..............................................................................79 D. Property ........................................................................................................84 1. Real estate ........................................................................................85 2. Vehicles and parts ...........................................................................90 3. Property insurance ...........................................................................96 4. Firearms ...........................................................................................100 E. Utilities and natural resources ..................................................................101 1. Energy sector ..................................................................................101 2. Natural resources ...........................................................................108 F. Finance, payments & commercial business ..........................................110 1. Welfare and entitlement programs .............................................110 2. Taxes and revenue ........................................................................111 3. Bonds and public finance ............................................................114 iii 4. Public banking ................................................................................120 5. Digital asset banks .........................................................................122 6. Cannabis and banking .................................................................124 7. Remittances ....................................................................................130 G. Civic participation ....................................................................................134 1. State Archives .................................................................................135 2. Secretary of State: Business programs .........................................138 3. Internet voting ................................................................................139 H. Education & workforce ............................................................................144 1. Academic institutions ....................................................................145 2. Credentials: degrees, professional certification .........................146 VI. The Role of State Government .......................................................................... 150 A. Fostering a welcoming business environment .......................................152 B. Working with consumer advocates and other stakeholders ...............155 C. Recommended amendments to California statutes ...........................157 VII. Acknowledgements ......................................................................................... 160 VIII. Appendix .......................................................................................................... 162 A. Cybersecurity: Disruptive Defenses.........................................................163 B. Survey responses .......................................................................................165 C. Assembly Bill 2658 (Calderon) .................................................................167 iv Introductory Letter To the Members of the California Legislature: As Chair of the Blockchain Working Group, it is my pleasure to submit the Group’s report for your review. The report fulfills the charge established by AB 2658 (Calderon) and represents a significant step in analyzing the potential uses, risks and benefits of blockchain technology in state government and for businesses operating in California. It was my privilege to lead a diverse 21-member group representing multiple disciplines, which developed a comprehensive report that includes feedback from many stakeholders, including industry groups, academic experts, public sector leaders, and the broader public. The Working Group investigated a range of topics and potential applications, from public vital records and personal health records to supply chain and educational credentials. Although leaders throughout California State government were consulted and the Government Operations Agency championed the process and provided logistical support, the Working Group operated as an independent body. The ideas contained in the report are those of the Working Group and do not necessarily reflect administration policies. Any consideration of adopting blockchain by government entities in California should include conversations about the risks and benefits of blockchain to the people of California—not just government—and ensure that clear communications about benefits, such as privacy and control over personal data, are communicated clearly as well as any risks. After a year of research and discussions, the Working Group has identified three recommended pilots for your consideration: Department of Motor Vehicles The Department of Motor Vehicles (DMV) identified three candidates for pilots in which blockchain technology could improve its current processes. These included creating a digital wallet for individual identification, building a common blockchain platform for tracking a vehicle’s lifecycle, and creating a fine-grained security structure for sharing driver records across states. For the moment, DMV has put this project on hold to focus on the State’s response to the COVID-19 pandemic. v The Department of Food and Agriculture The California Department of Food and Agriculture could pilot the use of blockchain technology to more quickly trace the source of food-borne contamination by collecting and
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