Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

My Thoughts

How Artificial Intelligence and Blockchain can Improve Government

A skillful use of a combination of artificial intelligence and block chain might increase the efficiency, transparency and effectiveness of government.

There are many ways that blockchain and AI can reduce the cost of government while making it more responsive to citizens. Even some age old abuses might be corrected or eliminated by these cutting edge technologies.

Examples of How AI and Blockchain can Improve Government Services

Here are a few of examples of AI and Blockchain’s potential to greatly improve government.

  • By eliminating gerrymandering. Currently it is very easy for politicians to draw legislative districts in such a way as to exclude certain groups. This can disfranchise voters by putting them into a sort of political ghetto. Since an AI is not motivated by racial prejudice; or party loyalty, it would be able to draw up rational districts. This might give all the voters fair representation, and reduce political polarization. One advantage to AIs is that they would be more likely to draw up compact districts that reflect the actual population rather than party needs.

  • Increasing the speed of government service delivery while reducing bureaucracy. JPMorgan Chase (NYSE: JPM) unveiled a learning machine called Contract Intelligence, or COIN that is capable of analyzing thousands of loan contracts for errors at once. Why not use COIN to analyze government documents such as Medicare bills or welfare applications. This can reduce fraud and speed up services. It would also eliminate the need for thousands of expensive bureaucrats, between June 2016, and February 2017 COIN preformed 360,000 hours of work normally done by lawyers and loan officers, Bloomberg reported.


  • By making applying for government services fast and easy. Goldman Sachs (NYSE: GS) Marcus website can process a loan application in a minute with no human involvement. The same technology can easily be applied to unemployment applications or tax returns.
A joint session of Parliament in the House of Commons in Ottawa November 3, 2014. (Chris Wattie/Reuters)
  • Making the process fairer and more accurate by eliminating potentially biased human actors from the process. For example a bureaucrat who is likely to turn down a welfare or visa application because of a person’s race or skin color. A Marcus for benefits might distribute funds to those who actually need them, rather than the people the bureaucrat likes.


  • Making it far easier and cheaper to distribute benefits such as Basic Income to vast numbers of people. A Marcus type program would do this by dispersing cryptocurrency to digital wallets. The same AI might be able process applications and dispense the funds at the same time eliminating the need for a vast amount of bureaucracy.

  • Making economic stimulus easier and more effective. Central bankers or officials would be able to disperse funds almost instantly to areas where they are needed such as a depressed small town. Instead of buying bonds for stimulus a banker at the Federal Reserve would be able to push a button and send the money straight to the people that actually need it. The greatest drawback to present stimulus programs is that the money often only reaches the rich or corporations, not those who actually need it.


  • Eliminating voter fraud and questions about elections. We can apply block chain in such a way that each vote would effectively be tamper proof. There would be a permanent encrypted record that would allow officials to keep track of every voter. Using an AI to count the votes would eliminate many of the questions about elections, and make it harder for politicians to use allegations of vote fraud to undermine the democratic process.

  • Making government records easy to access but hard to tamper with. Government records stored on a block chain can be available in the cloud for everybody to access but they would be hard to tamper with. This would increase transparency but reduce costs by getting rid of all that paper. Another advantage would be to make it easier to comply with Opens Records Laws and to protect classified or sensitive data.


  • Perhaps eventually eliminating paper money which can be costly and facilitate crime and terrorism. Today terrorism, the drug trade, illegal immigration and organized crime are largely funded with cash. Replace the cash with cryptocurrency and you can eliminate the funding for a lot of nefarious and destructive activity. There would also be savings by eliminating the printing, transportation and security costs associated with paper money.


  • Allowing the military and law enforcement to always stay one step ahead of bad guys such as organized crime and terrorists. The AI Libratus was able to develop strategies that enabled it to out think, and outplay human poker players in a tournament in February 2017. One of those players called the defeat an “absolute beat down.” An AI such as Libratus would be able to help the military develop strategies to win on the battlefield and devise new defenses against terrorism. It might even be able to predict terrorists’ or criminals moves and position troops or agents to stop them.

  • Making effective use of intelligence. Our government collects a vast amount of intelligence through agencies such as the CIA and NSA, yet often makes poor or no use of it. The last 20 years have seen two massive intelligence failures; the inability to detect the conspiracy behind the September 11 attacks even though the identity of some of the terrorists was known to agencies, and the false claims of weapons of mass destruction before the Second Iraq War. An AI such as Libratus might be able to effectively sift through and analyze that intelligence; and provide leaders and commanders with accurate information. One practice such an AI might reduce; or eliminate, is the tailoring of data for political reasons. Human analysts only give leaders the data they think the boss wants to see and suppress the rest. An AI with no political agenda might provide the leader or commander with a full picture.

  • Creating new means of financing government with next generation financial instruments. Technologies like those that power the AI hedge fund Numerai might allow the creation of new kinds of bonds or other financial instruments to fund government. This might allow for reductions in taxes or increases in government services. One possibility would be new kinds of Treasury bonds, another would be securities issued to fund infrastructure construction.


There are many other potential uses for AIs in government, for example in helping prosecutors win cases and put criminals in prison where they belong. An AI might also be able to devise new strategies for tax collection, education, social services or law enforcement that would enhance life in our cities.

The possibilities of AI-enhanced and blockchain powered government are vast. The question we need to ask; is will the bureaucrats and politicians let us take advantage of such technologies, or will they try to suppress such advances to protect their jobs?