The UK government is tracking the spending of people who receive welfare by posting their purchases to a digital ledger that can never be altered—specifically, a blockchain, the technology underpinning virtual currencies like bitcoin.
The use of such technology to police how the poor spend their money has come under fire from privacy advocates and anti-poverty activists alike.
The trial, which began in June, is the result of a partnership between UK company GovCoin Systems , University College London, Barclays, and energy company RWE npower. The trial was announced by former banker and current Conservative Minister of Welfare Reform David Freud at the 2016 Payments Innovations Conference in London.
“Claimants are using an app on their phones through which they are receiving and spending their benefit payments,” Freud said, according to a press statement . “With their consent, their transactions are being recorded on a distributed ledger to support their financial management.”
But blockchain technology, by virtue of posting personal information permanently, risks exposing highly personal information, according to the UK-based Open Data Institute (ODI).
“Blockchain-based benefits need to be carefully designed to meet agreed policy and ensure that recording auditable benefits payments and how the benefit recipient spends that money doesn’t unintentionally, even some time in the future, expose personal information to a wide group of people,” Jeni Tennison, Technical Director of the ODI, wrote me in an email.
Even if the personal information stored on the blockchain were encrypted, Tennison continued, “over a sufficiently long period, any encryption will be broken whether by discovery of loopholes, backdoors, or the advent of new techniques such as quantum computing .”
GovCoin Systems, the company leading the trial, did not respond to Motherboard’s request for comment within our publishing timeframe.But even if some of the dire privacy implications of the trial could be smoothed over, welfare experts […]
