electronics
Article
Distributed-Ledger-Based Blockchain Technology for Reliable
Electronic Voting System with Statistical Analysis
Rupa Ch 1 , Jaya Kumari D 2 , Thippa Reddy Gadekallu 3, *
1
2
3
4
*
and Celestine Iwendi 4, *
Department of Computer Science and Engineering, VR Siddhartha Engineering College,
Vijayawada 520007, India
Department of Computer Science and Engineering, Sri Vasavi Engineering College,
Tadepalligudeam 534101, India
School of Information Technology and Engineering, Vellore Institute of Technology, Vellore 632014, India
School of Creative Technologies, University of Bolton, Bolton BL3 5AB, UK
Correspondence: thippareddy.g@vit.ac.in (T.R.G.); c.iwendi@bolton.ac.uk (C.I.)
Abstract: In today’s society, voting is crucial to choosing the representatives of the people. The
current voting process is filled with a vast array of disputes and manipulations. The leader must be
selected in a precise manner without any malpractices. In addition, the people and authorities are
not happy with the election results and label them unpredictable. We offer a better solution to the
current problems, such as tampering, non-residents voting outside of the polling place, quick results
analysis, quick counting, and reduced use of staff and funds during the electoral franchise process.
In this offer, blockchain technology is used to create the distributed application (dApp) framework
that will be used for the proposed e-voting system. Additionally, it offers unique characteristics
such as immutability, transparency, privacy, and reception freedom that reduce crimes involving
the processing of sensitive data in the electoral process. Ganache, MetaMask, and specified dagger
hashing algorithm are used to develop the dApp. A key strength of this paper is the statistical
analysis of transactions on the blockchain. Moreover, it also provides security to voters’ identity and
leads to immediate acceptable counting results with more accuracy.
Citation: Ch, R.; Kumari D, J.;
Gadekallu, T.R.; Iwendi, C.
Distributed-Ledger-Based Blockchain
Technology for Reliable Electronic
Keywords: blockchain; e-vote; unique ID; Ethereum; secure preservation
Voting System with Statistical
Analysis. Electronics 2022, 11, 3308.
https://doi.org/10.3390/
electronics11203308
1. Introduction
Academic Editor: Juan M. Corchado
Electronic voting (sometimes known as e-voting) is a mode of voting in which votes
are cast and counted via electronic methods. E-voting may employ freestanding electronic
voting machines (EVM) or computers connected to the Internet, depending on the implementation. It might include a variety of Internet services, ranging from simple transmission
of tabulated results to full-function online voting via ordinary connectable household devices. Persons with limitations can have full access to electronic voting machines. Electronic
machines can use headphones, sip-and-puff, foot pedals, joysticks, and other adaptive technology to provide the necessary accessibility. Punched card and optical scan machines are
not fully accessible for the blind or visually impaired, and lever machines can be difficult
for voters with limited mobility and strength. Blockchain ensures transparency by storing
information in such a way that it cannot be altered without recording the changes made
using the necessary encryption and control mechanisms.
The necessity of a paper trail in connection with EVMs is acknowledged on a global
scale. In several countries, electronic voting was implemented. The security, precision,
dependability, and verifiability of electronic elections, however, were quickly disputed.
The types of hacking are always evolving, and the advisors for Electronics Corporation of
India Limited (ECIL) identified that when two wires were soldered together (the “diode
and triode period”), the data can be tampered with. They are unable to refute the claim
made by worldwide experts that no electronic device has ever been created that cannot be
Received: 23 September 2022
Accepted: 9 October 2022
Published: 14 October 2022
Publisher’s Note: MDPI stays neutral
with regard to jurisdictional claims in
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Copyright: © 2022 by the authors.
Licensee MDPI, Basel, Switzerland.
This article is an open access article
distributed under the terms and
conditions of the Creative Commons
Attribution (CC BY) license (https://
creativecommons.org/licenses/by/
4.0/).
Electronics 2022, 11, 3308. https://doi.org/10.3390/electronics11203308
https://www.mdpi.com/journal/electronics
Electronics 2022, 11, 3308
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tampered with or compromised. Concerns have grown for years that political opponents or
foreign powers could manipulate voters or even entire elections. Even if it is not possible
to influence an election’s outcome, attempts at manipulation will cause frustration and
uncertainty. These doubts are poisonous to any democracy because they undermine the
foundations of our political system, namely the need for basic trust in the legality of
electoral decisions and respect for the wishes of the majority. They have the potential to
cast doubt on democracy itself, especially at a time when it is up against formidable foes
such as autocrats, populists, and other opponents of pluralism.
Blockchain technology was developed to address these problems, and it now provides
decentralized nodes for electronic voting. Blockchain technology is used to develop electronic voting systems primarily due to the advantages of end-to-end verification. This
technology is a great alternative to traditional electronic voting systems since it has distributed, non-repudiation, and security protection characteristics. The security of remote
participation must be practical for a blockchain-based electronic voting system to be scalable, and transaction speed needs to be addressed. These issues have led to the conclusion
that the current frameworks needed to be modified before being used in voting systems.
The remaining paper is organized in the following way: In Section 2, recent works
are discussed. Materials and methods are discussed in Section 3. Section 4 discusses the
proposed methodology. Section 5 addresses results and analysis.
2. Literature Survey
X. Yang, X. Yi et al. [1] suggested a solution that combines public blockchain and
Intel Software Guard Extensions (SGX) to ensure that all conventional voting system
criteria are satisfied while also providing protection against malevolent adversaries with
administrative access. The SGX checks the vote’s eligibility and authenticity and encrypts
it within the SGX enclave. Fingerprints (i.e., the hash values) of the encrypted votes are
published on the public blockchain ledger before the deadline of the election. All encrypted
votes are disclosed until the deadline. The main limitations of this work are Intel SGX
Cache timing attacks and a lack of protection against side-channel attacks.
F. D. Giraldo et al. [2] proposed the idea to use blockchain and other technologies
to enable an electronic voting system for the election of unique candidates. They used
Ethereum Smart Contracts and the cryptographic security of public and private keys in
order to evaluate blockchain technology as a potential replacement for current voting
systems. This was accomplished through the specification of an architecture created
specifically for electoral processes. The disadvantage of this study is its inability to be
scaled and shared networks.
S. Gupta et al. [3] critically examined the evolution and present condition of blockchainbased online voting systems, its features and limitations, as well as quantum computing
and post-quantum cryptography breakthroughs. They offer a structure of the system for
an online voting system that uses post-quantum cryptography, as well as methodical and
critical viewpoints and findings on quantum-resistant blockchain for such a system in the
future. The major drawbacks of this work are large key sizes and performance costs and
non-ideal scalability.
S. Donepudi et al. [4] introduced this methodology based on blockchain that uses a
cryptographic signature known as a hash to record transactions for the online voting process.
Several blockchain voting mechanisms/strategies have been suggested by various scholars.
The purpose of this article is to compare and contrast blockchain voting technologies with
a “Performance Driven Framework for Mass e-Voting” leveraging Hyperledger Caliper.
The drawbacks are underutilization due to performance limitations imposed by species
and charge transports.
D. K and U. K et al. [5] discussed that creating a crowd in the existing scenario of
COVID-19 also adds a lot of complications. As a result, in such a situation, the online
voting system will be a huge success in the election. However, the online system’s security
and transparency raise certain concerns. Incorporating blockchain into online e-voting
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will eliminate all of these flaws. The method allows voters to register and vote for any
candidate. The vote will be saved in a secure blockchain, but all other information, such as
the voter’s name, city, and whether they voted or not, will be accessible to anybody via
the website. This system will provide security by denying duplication of votes. One of the
limitations is that block votes can have unpredictable and often undesirable impacts on
election outcomes.
A. Parmar et al. [6] proposed a blockchain-based decentralized national e-voting
system. It provides an admin interface for scheduling voting, managing candidates, and
declaring results. At the time of voting, the online application will prompt users to provide
their Aadhar card ID (unique Indian ID) as text input and a photo of themselves. The
voter’s eligibility will be verified when they submit their Aadhar card ID. The phone
numbers of eligible voters will be confirmed using a One Time Password (OTP). Individual
voters will be regarded as eligible to vote after voter verification. Voters will be observed
using a webcam/front camera while voting. The votes will be maintained in a blockchain,
and any tampering will be instantly recognized. The voting results will be declared on a
specified date and will be handled by the administrator. The main limitations are a greater
threat to individual and societal privacy.
S. T. Alvi et al. [7] proposed a blockchain-based e-voting system. Blockchain has
a variety of benefits that will alter the traditional system. However, Ethereum-based
blockchain implementation is costly because each transaction has a processing fee. The
authors have taken advantage of this principle to develop a low-cost blockchain-based
voting system since sidechains extend the functionality of blockchains by doing additional
actions outside of it with duplicate currency and returning the results to the mainchain for
use. The disadvantages are insecurity and lack of transparency.
In order to create an anonymous cloaking region and meet the requirements of both
the request vehicle and the cooperative vehicle, as well as combining the traits of these
two roles, the authors in [8] developed a blockchain-enabled trust-based location privacy
protection scheme in the VANET. It ensures that both the requester and the cooperator will
only work with vehicles they trust [9].
Verifiable Query language (VQL) is a query-based service provider for the blockchain
system. H. Wu et al. [10] used Ethereum blockchain, Rinkeby, and cloud environment to
test the proposed system. H. Wang et al. [11] proposed a searchable blockchain system that
uses two query searches mechanism. The proposed system doesn’t have separate query
search-supported system that can reduce the complexity of the application system in terms
of time and space. The summary of the literature survey is depicted in Table 1.
Table 1. Literature Survey Summary.
Author
Administrator
BCT
Type
Statistical
Analysis
Distributed
Application
Design/
Develop
[12]
[13]
[14]
[15]
[16]
[17]
[18]
[19]
Proposed Model
Not Existed
Not Existed
Not Existed
Not Existed
Yes
Not Existed
Not Existed
Not Existed
Yes
Private-Bit Coin
Private-Bit Coin
Private-Bit Coin
Private-Bit Coin
Private-Ark
Public-Ethereum
Public-Ethereum
Not mentioned
Public-Ethereum
No
Part
No
No
No
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Design
Both
Design
Design
Design
Design
Design
Analysis
Both
3. Material and Methods
To implement the proposed framework, we used the following system setup: Intel®
Core ™ i7 -8550U CPU @ 1.80 GHz, 16 GB RAM, and 64-bit processor on Windows 10.
To design and deploy blockchain-based smart contracts, we used Ganache to set up an
Electronics 2022, 11, 3308
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Ethereum public blockchain. MetaMask, which is a browser extension cryptocurrency
wallet, was also used. Furthermore, Solidity was used to develop and deploy the required
smart contracts, which can be deployed on EVM. An overview of the voting system
qualification testing is given in this section. The process of demonstrating that a voting
system complies with the standards and the conditions of its certification are known as
qualification testing.
Problem Statement
The people and authorities are not happy with the election results and label them
unpredictable. We can offer a better solution to the current problems, such as tampering,
non-residents voting outside of the polling place, quick results analysis, quick counting,
and reduced use of staff and funds during the electoral franchise process. Blockchain
technology is used to create the distributed application (dApp) framework that will be
used for the proposed e-voting system. Additionally, it has unmatched characteristics
such as immutability, transparency, privacy, and receipt freedom that limit the number of
crimes involving the processing of sensitive data in the electoral franchise system. The
dApp was created using Ganache, MetaMask, and the provided dagger hashing algorithm.
Additionally, it ensures the privacy of each voter and produces quicker, more accurate
results when the votes are counted.
Eth coins: Ethereum processing stage depends on the blockchain, which opens a
working framework with a keen agreement process. This supports a modified variation
of Nakamoto’s results by the exchange-based condition [20]. Ether is a digital currency
created by Ethereum and is used to reward digging-hubs for calculations. Each eth account
has an eth equivalent and can start with one record and move to the next.
Ganache: Ganache is utilized to run an individual Ethereum blockchain for decentralized applications. Moreover, It is used to create, test, compile and execute smart contracts.
Metamask: It is a digital currency wallet utilized on Chrome, Firefox, and other
programs. MetaMask is also used to store keys for Ethereum digital currencies. Metamask
does not need any login and does not store any private keys in any worker, and all
the passcodes are exceptionally secured [21,22]. The main problems encountered while
using Metamask only supports Ethereum and Ethereum Request Comment (ERC20) token.
ERC20 token is a standard that used to create and issue smart contracts on the Ethereum
blockchain
Solidity: Solidity is a statically composed programming language intended for creating
keen agreements that sudden spike in demand for EVM. EVM implies Ethereum Virtual
Machine [23]. Here, the designers can design applications that can be actualized by utilizing
self-authorizing business rationale encapsulated in shrewd agreements, definitive records
of exchange, and no reputation.
Smart contracts: Smart contracts check, authorize, or execute a shrewd agreement,
and it is a PC convention. Keen agreements permit us to play out the exchanges without
outsiders. The wise deal enables us to share cash, offers, or property. Smart contracts
have rules and punishments for a specific concurrent transaction [24–29]. Every new
arrangement should create new principles and penalties for each agreement and naturally
uphold those commitments.
Creation of a Smart Contract: Smart contracts are a commonly made programming
language called “Solidity”, which is practically like the dialects C++ and JavaScript. Dialects
such as Vyper and Bamboo are additionally utilized.
Contract: In all the top programming dialects, they allow clients to pass functions
legally, and some low-level programming dialects use the stack to provide attributes for
efficiency. In any case, an electronic democratic machine uses a 256-piece register stack in
which ongoing 16 things can be controlled or gotten to once.
Deploying a Smart Contract: An exchange is made without addressing when a smart
contract is executed. Additionally, some bytecodes are included as information. These
bytecodes go about as constructors, which are expected to compose starting factors to store
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before replicating the runtime bytecode to contracts code [30–37]. The bytecode has to run
once in it, and a runtime bytecode has to run on each agreement call.
4. Proposed Methodology
The proposed system improves the integrity and privacy of the present conventionalbased electoral franchise system due to blockchain’s additional features. Transparency is
the best way to prevent all forms of rigging, whether at the polling station, during the
count, or during aggregation. In this application, for each candidate or contestant, a block
must be allotted over a blockchain. Electors’ votes are maintained as transactions in the
block. Dependent on citizens, a unique BCTID (blockchain innovation ID) is created by
considering their credentials. Additionally, face or fingerprint or some other biometrics are
considered for avoiding infringement. As citizens seek enlistment and are enrolled, they
must obtain their BCTID to cast a ballot. At the time a citizen goes to vote the ballot, the
voter must be verified by the assigned unique BCTID by considering their proof submitted
at the time of initial registration. This feature helps to reduce fraudulent votes and can be
easily verified as a legitimate voter. After that point, the elector can cast a ballot for the
candidate they need to decide in favor of. If the citizen goes to the polling office without
the BCTID, they have to obtain Eth from an approved individual. Then, they have to be
allocated with a BCTID and can go for the democratic cycle. This blockchain innovation
can be utilized in different fields for making clinical records, making a computerized legal
official (i.e., e-public accountant), and in any other event, such as gathering charges, as
shown in Figure 1.
The blockchain system uses the asymmetric cryptographic system through public key
and private key pairs [38–48]. These key pairs are randomly generated pairs and are also
one-way-based. Each block consists of a unique address that has been evaluated from the
public key and Markel hash function. Hence, users can monitor immutable transactions.
All nodes that are in the network should approve if anyone would like to do any alterations
or modifications. Furthermore, it is not possible to make any alterations or update the data
over the network. Moreover, it is an interconnected blocks-based technology [42–48]. All
the record transactions are directly assigned with the session and transaction keys that act
as personalized digital signatures. This safe Electronic Democratic Framework utilizing
blockchain innovation holds various modules. Those are party/candidate enrollment,
BCT-based citizen ID creation, elector enlistment cycle, and casting a ballot cycle.
To reduce the crimes on sensitive data processing in the electoral franchise system,
we create file back-ups, data back-ups, and back-up bandwidth abilities. This will help a
company to retain its information in the event of extortion.
4.1. Contestant Block Creation
Initially, a unique block is generated for each contestant. This process depends on
the Eth balance of a contestant account. If a contestant has a sufficient cryptocurrency
(Eth/Gas) balance, it can generate a block. If there is no adequate balance for developing
a block, it is not possible to create a block. The required credit has to be credited into the
wallet from external sources to continue the block creation process, as shown in Figure 1
and Algorithm 1. Here, the currency name is Eth and gas is considered a commodity.
The gas fee will be refunded in Eth currency. Gas prices are quoted in gwei [27]. In this
application, solidity programming is used to create a block for each eligible contestant.
Electronics 2022, 11, 3308
Electronics 2022, 11, x FOR PEER REVIEW
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6 of 13
Voting(v
Unique ID
Voters
Candidates
Unique ID
1,v2,..)
Creation
BCTIDs
Registration
No
Chec
Eth-Gas
N
k
EthBalanceupd
Unique ID for
Yes
Che
ating
voters (BCTID)
Yes
NoBlock
Blocks create
SmartContra
ct
Block1
T1
T2
:
Block2
T3
T4
:
Figure 1. Proposed System Architecture.
The blockchain system uses the asymmetric cryptographic system through public
key
and private
keyCreation
pairs [39–49]. These key pairs are randomly generated pairs and are
Algorithm
1: Block
also one-way-based. Each block consists of a unique address that has been evaluated from
Input:
Contestant
Details,
BalanceHence, users can monitor immutable transacthe
public key
and Markel
hashEth
function.
Output:
Creation
of
a
Block
tions. All nodes that are in the network should approve if anyone would like to do any
Process: or modifications. Furthermore, it is not possible to make any alterations or upalterations
Take
contestant
date the
data
over thedetails.
network. Moreover, it is an interconnected blocks-based technology
for All
j = Contestant
‘1’ to Contestant
‘n’ do assigned with the session and transaction
[42–48].
the record transactions
are directly
Check
Eth_balance
keys that act as personalized digital signatures. This safe Electronic Democratic FrameIf Eth_Balance ≥ Threshold_cost then a block (block [j]) is created, otherwise no block
work utilizing blockchain innovation holds various modules. Those are party/candidate
is created.
enrollment, BCT-based citizen ID creation, elector enlistment cycle, and casting a ballot
Eth_balance←(Eth_balance—Threshold_cost)
cycle.
To reduce the crimes on sensitive data processing in the electoral franchise system,
4.2.
Creationdata
and Allotment
Voter
weBlockchain
create fileID
back-ups,
back-ups,for
and
back-up bandwidth abilities. This will help a
Using to
theretain
Ganache
platform, ain
distinct
blockchain-based
company
its information
the event
of extortion. identity (BCTID) is created
for each citizen. All voters need to first register, after which a special BCTID will be assigned
to them. Algorithm 2 demonstrates the suggested system procedure, which enables online
registrations, using a DAPP built on an Ethereum-based public blockchain foundation.
Electronics 2022, 11, 3308
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Algorithm 2: Unique ID Creation (BCTID) for Voter
Input:
Electors credentials
Output:
BCTID generates.
Process:
All voters take registration through frontend-based DAPP.
For i = ‘Voter 1’ to ‘Voter n’ do
Voter [i] BCT_ID[i]//A unique BCTID allotted to the voters
Where n = No. of balloters
As shown in Algorithm 3, when the electors go for the vote, they have to validate
their BCTID. If it is a valid BCTID, they can go for the electing process. If the citizens’
BCTID is not valid or the citizens are not registered yet, then they need to purchase the
cryptocurrency from an approved person. Later, that citizen is going to be assigned with a
BCTID. Then, they have to choose to vote, verify the BCTID if it is a legitimate BCTID, then
redirect to the contestants block.
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Algorithm 3: Electing Process
Input:
5.Output:
Results
Blockchain-based unique ID i.e BCTID
Vote transaction creation into a block
Process:
The proposed blockchain based distributed application (dApp) provides a secure
Initially,
Elector registration
verified.
voting system with
the following
features: privacy,
convenience, receipt and physical tally
or count freeness,
and
cost
and
fraud
voting
reduction.
The model uses the smart contracts
For i = 1 to n do
of add_voter
(
),
start_vote
(),
do_vote
(
),
total_votes
(
)
total_voters
(). Figure
2 shows
If BCT_ID(Elector [i]) exists then they can useand
their
voting right
otherwise
request for
MetaMask-based
eth
balance
that
has
to
be
used
to
perform
the
operations
of
a
proposed
registration.
system.
gasinto
(in terms
of Eth)
is required
call the functions by the regulatory
ElectorGenerally,
vote stores
a block
(block
[j]) as a to
transaction.
authority. Table 2 shows the gas consumption cost for each operation over the blockchain.
5.
Results
Table
2. System operations with gas cost.
The proposed blockchain based distributed application (dApp)
provides a secure
TxN Size
Caller
Function
Name
Gas
Cost
voting system with the following features: privacy, convenience, receipt
and physical tally
(In Bytes)
or count
freeness,
and
cost
and
fraud
voting
reduction.
The
model
uses
the
smart contracts
Administrator
Add_Voter ( )
0.001138
132 bytes
of add_voter
(
),
start_vote
(
),
do_vote
(
),
total_votes
(
)
and
total_voters
(
).
Administrator
Start_Vote ( )
0.000861
4 bytesFigure 2 shows
MetaMask-based
eth
balance
that
has
to
be
used
to
perform
the
operations
Vote Holder
Do_Vote ( )
0.01619
36 bytes of a proposed
system.
Generally,
gas
(in
terms
of
Eth)
is
required
to
call
the
functions
by the regulatory
Administrator
Total_votes ( )
0.15879
8 bytes
authority.
Table
2
shows
the
gas
consumption
cost
for
each
operation
over
Administrator
Total_voters ( )
0.1138
8 bytesthe blockchain.
Figure 2.
EthEth
Balance.
Figure
2. MetaMask
MetaMaskInitial
Initial
Balance.
Table 3 and Figure 3 represent the ETH balance consumption to process the votes in
the Ganache-based Ethereum blockchain. In this work, we tested cryptocurrency (ETH)
consumption rate by considering 100 votes. Furthermore, Table 3 shows the gas consumption for a specific number of votes. Table 4 shows the operational cost of every smart contract function in the blockchain environment.
Electronics 2022, 11, 3308
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Table 2. System operations with gas cost.
Caller
Function Name
Gas Cost
TxN Size
(In Bytes)
Administrator
Administrator
Vote Holder
Administrator
Administrator
Add_Voter ( )
Start_Vote ( )
Do_Vote ( )
Total_votes ( )
Total_voters ( )
0.001138
0.000861
0.01619
0.15879
0.1138
132 bytes
4 bytes
36 bytes
8 bytes
8 bytes
Table 3 and Figure 3 represent the ETH balance consumption to process the votes in
the Ganache-based Ethereum blockchain. In this work, we tested cryptocurrency (ETH)
consumption rate by considering 100 votes. Furthermore, Table 3 shows the gas consumption for a specific number of votes. Table 4 shows the operational cost of every smart
contract function in the blockchain environment.
Table 3. Eth consumption for votes.
Gas
No. of Votes
Electronics 2022, 11, x FOR PEER REVIEW
1
10
20
30
40
50
100
Limit (Units)
Cost
Price
(CGWEI)
71,894
56,894
113,748
170,682
227,576
284,470
5,689,400
0.01138
0.1138
0.2276
0.3414
0.4552
0.5690
0.11380
20
20
20
20
20
20
20
Eth
(Total)
0.001138
0.01138
0.02276
0.03414
0.04552
0.0569
9 of 13
0.01138
0.6
Crypto Balance
0.5
0.4
0.3
Gas Cost
ETH Cost
0.2
0.1
0
1
10 20 30 40 50 100
No of Voters
Figure3.3.Eth
Ethconsumption
consumptionfor
forvotes.
votes.
Figure
Table 3. Eth consumption for votes.
Gas
No. of Votes
1
10
20
30
40
Limit (Units)
Cost
71,894
56,894
113,748
170,682
227,576
0.01138
0.1138
0.2276
0.3414
0.4552
Price
(CGWEI)
20
20
20
20
20
Eth
(Total)
0.001138
0.01138
0.02276
0.03414
0.04552
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Table 4. Smart contracts operational cost over blockchain environment.
From Address: 0x2863B2f5ECE0de3aafc1eE5500e7E4ac6E852Ae5
To Address: 0xC31DDe674098rftv897hfty4BGOI2RS876e5987Td004
Function
Amount
Gas Used
Fee
(TxN)
addVoter ( )
1138
0.001138
Eth
startVote ( )
861
0.000861 Eth
doVote ( )
1619
0.01619 Eth
Totalvotes ( )
15,879
0.15879
Eth
Totalvoters ( )
1138
0.1138
Eth
Hash
(TxN)
Block Details
(Mined)
Size of a Block
(Bytes)
Nonce
(TxN)
Index
(TxN)
57
132
40
57
168
4
150
168
170
36
162
172
187
8
175
178
194
8
179
182
0x1649261e01550957dd8b
aa8527790ca1f7526fda956
d93ce6f229f90bcf1b993
0x615ec41c5b56707566933
a741346a5f1e4941045ed36
e009fefec2c86817c3a3
0xb71c0b33b37b034e4c87
9d21648952d0f04a012d05
e3f83b19e6c8334cc25d54
0x34c895c20880c429595ef
922b23bd5194a43aec3181
a046414b07237d3b460a8
0x4316Fb7f44E2715c614C
15B9aB62b6a3184aa84c00
7763213d394d66
Figures 4 and 5 show the proof of the transaction over a blockchain from Ganache. It
consists of details of the transaction such as hash value (Txn Hash), block number of the
Electronics 2022, 11, x FOR PEER REVIEW
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transaction, and transaction fee (Txn Fee), from address and to address. Table 5 shows
comparison of the proposed system with existing related works.
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Figure 4. Transactions information in Ganache.
Figure 4. Transactions information in Ganache.
Electronics 2022, 11, 3308
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Figure 4. Transactions information in Ganache.
Figure 5. Blocks information in Ganache.
Author Contributions: R.C.: data curation, methodology, writing—original draft; J.K.D.: literature
review, writing—review and editing; T.R.G.: formal analysis, writing—original draft, supervision;
C.I.: methodology, writing—review and editing, supervision. All authors have read and agreed to
the published version of the manuscript.
Funding: This research received no external funding.
Figure 5. Blocks information in Ganache.
Figure 5. Blocks information in Ganache.
Author Contributions: R.C.: data curation, methodology, writing—original draft; J.K.D.: literature
Table
5. Comparison
withand
existing
related
works.
review,
writing—review
editing;
T.R.G.:
formal analysis, writing—original draft, supervision;
C.I.: methodology, writing—review and editing, supervision. All authors have read and agreed to
the published version
of the manuscript.
Application
Blockchain
Tool
Application
Performance Analysis
Authors
Funding: This research received no external funding.
UAV Data
Remix
Not dApp
[36]
Functional and non-functional
requirements based
[37]
Voting
Designed
Not dApp
Not analyzed
[38]
Voting
Designed
Not dApp
Not analyzed
[39]
Token Transaction
Designed
Not dApp
Functional requirements Based
[40]
Medical Certificates
Test RPC
dApp
Functional and non-functional
requirements based
[41]
Vehicular Network
Hyperledger
dApp
Functional requirements Based
[42]
IoT
Designed
Not dApp
Non-functional requirements
Based
[43]
IoT
Designed
Not dApp
Not Analyzed
[44]
Blockshare: Prototype for
data sharing
Python & Solidity
Not dApp
Non-functional requirements
based
[45]
Scaling blockchain
Hyperledger
Not dApp
Functional requirements based
[46]
Lineage Chain: Blockchain
system
Hyperledger
Not dApp
Functional Requirements
[47]
Arithmetic circuits
Symme Proof: A
protocol
Not dApp
Non-functional requirements
based
[48]
Lineage Chain: Blockchain
system
Hyperledger
Not dApp
Functional Requirements
Proposed
System
Voting
Ganache
dApp
Functional and Non-functional
requirements based
Electronics 2022, 11, 3308
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6. Conclusions
An online voting system must be able to show proof that it effectively upheld election
integrity and that there was no fraud committed during the voting or tallying procedures.
The necessity to confirm the precision and correctness of the decrypting procedure without
disclosing private decryption key information or voter identities makes it difficult to achieve
this degree of verifiability. The paper contributes the following: identifying the holes in
the present e-voting system; evaluating existing blockchain-based e-voting systems; and
the potential for the blockchain idea to enhance e-voting systems by classifying the major
current problems into five categories: general, integrity, coin-based, privacy, and consensus.
In this work, we utilized Ethereum to implement a blockchain-based e-voting system. In
the future, an e-voting system based on a private blockchain with a digital signature feature
can be implemented.
Author Contributions: R.C.: data curation, methodology, writing—original draft; J.K.D.: literature
review, writing—review and editing; T.R.G.: formal analysis, writing—original draft, supervision;
C.I.: methodology, writing—review and editing, supervision. All authors have read and agreed to
the published version of the manuscript.
Funding: This research received no external funding.
Data Availability Statement: No data is used in this work.
Conflicts of Interest: The authors declare no conflict of interest.
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CORE
Metadata, citation and similar papers at core.ac.u
Provided by UWL Repository
Secure Digital Voting System based on
Blockchain Technology
Kashif Mehboob Khan1,
Junaid Arshad2,
Muhammad Mubashir Khan1
1
NED University of Engineering and Technology, Pakistan
2
University of West London, UK.
ABSTRACT
Abstract: Electronic voting or e-voting has been used in varying forms since 1970s with fundamental
benefits over paper based systems such as increased efficiency and reduced errors. However, there
remain challenges to achieve wide spread adoption of such systems especially with respect to improving
their resilience against potential faults. Blockchain is a disruptive technology of current era and promises
to improve the overall resilience of e-voting systems. This paper presents an effort to leverage benefits of
blockchain such as cryptographic foundations and transparency to achieve an effective scheme for evoting. The proposed scheme conforms to the fundamental requirements for e-voting schemes and
achieves end-to-end verifiability. The paper presents details of the proposed e-voting scheme along with
its implementation using Multichain platform. The paper presents in-depth evaluation of the scheme
which successfully demonstrates its effectiveness to achieve an end-to-end verifiable e-voting scheme.
Keywords: electronic voting, e-voting, blockchain, e-government, verifiable voting
INTRODUCTION
Elections are fundamental pillar of a democratic system enabling the general public to express their views
in the form of a vote. Due to their significance to our society, the election process should be transparent
and reliable so as to ensure participants of its credibility. Within this context, the approach to voting has
been an ever evolving domain. This evolution is primarily driven by the efforts to make the system
secure, verifiable and transparent. In view of its significance, continuous efforts have been made to
improve overall efficiency and resilience of the voting system. Electronic voting or e-voting has a
profound role in this. Since its first use as punched-card ballots in 1960’s, e-voting systems have achieved
remarkable progress with its adaption using the internet technologies (Gobel et al, 2015). However, evoting systems must adhere to specific benchmark parameters so as to facilitate its widespread adoption.
These parameters include anonymity of the voter, integrity of the vote and non-repudiation among others.
Blockchain is one of the emerging technologies with strong cryptographic foundations enabling
applications to leverage these abilities to achieve resilient security solutions. A Blockchain resembles a
data structure which maintains and shares all the transactions being executed through its genesis. It is
primarily a distributed decentralized database that maintains a complete list of constantly germinating and
growing data records secured from unauthorized manipulating, tampering and revision. Blockchain
allows every user to connect to the network, send new transactions to it, verify transactions and create
new blocks (Rosenfeld, 2017; Kadam et al, 2015; Nakamoto, 2009). Each block is assigned a
cryptographic hash (which may also be treated as a finger print of the block) that remains valid as long as
the data in the block is not altered. If any changes are made in the block, the cryptographic hash would
change immediately indicating the change in the data which may be due to a malicious activity.
Therefore, due to its strong foundations in cryptography, blockchain has been increasingly used to
mitigate against unauthorized transactions across various domains (Nakamoto, 2009; Kraft, 2015;
Narayanan et al, 2015).
Bitcoin remains the most distinguished application of blockchain however researchers are keen to explore
the use of blockchain technology to facilitate applications across different domains leveraging benefits
such as non-repudiation, integrity and anonymity. In this paper, we explore the use of blockchain to
facilitate e-voting applications with the ability to assure voter anonymity, vote integrity and end-toverification. We believe e-voting can leverage from fundamental blockchain features such as selfcryptographic validation structure among transactions (through hashes) and public availability of
distributed ledger of records. The blockchain technology can play key role in the domain of electronic
voting due to inherent nature of preserving anonymity, maintaining decentralized and publicly distributed
ledger of transactions across all the nodes. This makes blockchain technology very efficient to deal with
the threat of utilizing a voting token more than once and the attempt to influence the transparency of the
result.
The focus of our research is to investigate the key issues such as voter anonymity, vote confidentiality and
end-to-end verification. These challenges form the foundation of an efficient voting system preserving the
integrity of the voting process. In this paper, we present our efforts to explore the use of the blockchain
technology to seek solutions to these challenges. In particular, our system is based on the Prêt à Voter
approach (Ryan, 2008) and uses an open source blockchain platform, Multichain (Multichain, 2017) as
the underlying technology to develop our system. In order to protect the anonymity and integrity of a
vote, the system generates strong cryptographic hash for each vote transaction based on information
specific to a voter. This hash is also communicated to the voter using encrypted channels to facilitate
verification. The system therefore conforms with the fundamental requirements of an e-voting system as
identified by (Rura et al, 2016). More discussion around this is presented in section 2.
The rest of the paper is organized as follows: the next section presents the requirements for an e-voting
system as identified by (Rura et al, 2016) and explains how our proposed system fulfils them. Section 3
presents the state-of-the-art with respect to e-voting and how we contribute to it followed by a detailed
description of the system design in section 4. Section 5 presents the implementation of our proposed
system with Multichain and user interface along with evaluation of the system highlighting how it
achieves the requirements presented in section 2. Section 6 concludes the paper identifying current
progress and plans for further work.
E-VOTING BACKGROUND AND REQUIREMENTS
Electronic voting has been an area of research focus for many years by using computing machines and
equipment for casting votes and producing high quality and precise results in accordance with the
sentiments of the participating voters. Various attempts have been adopted in practice to support election
process. Initially computer counting system allowed the voter to cast vote on papers. Later on, those cards
went through the process of scanning and tallying at every polling cell on a central server (Kadam et al,
2015; Rockwell, 2017; Hao et al, 2010). Direct Recording Electronic (DRE) voting systems were put in
place later on which were admired and acknowledged greatly by the voters in-spite of the resistance from
computer scientists. If the voting system is well understood by the voters, the system’s usability can be
increased remarkably. DRE systems in particular have gathered a lot of successes in bringing the voters
to use this technology. These systems work more or less in the same way as any conventional election
system does. In the case of DRE, a voter begins his journey by going to their polling place and get their
token to vote where he utilizes his token at the voting terminal to vote for his candidate. When the
candidate selection procedure is completed, DRE systems present the final selection to the voter before
actually casting it (in case if the voter wants to change his opinion) and after the final selection, the ballot
casting is completed (Multichain, 2017; Dalia et al, 2012).
More recently, distributed ledger technologies such as blockchain have been used to achieve e-voting
systems primarily due to their advantages in terms of end-to-end verifiability. With properties such as
anonymity, privacy protection and non-repudiation, blockchain is a very attractive alternative to
contemporary e-voting systems. The research presented in this paper also attempts to leverage these
properties of blockchain to achieve an efficient e-voting system. A detailed analysis of such systems is
presented in the next section along with the identification of comparison with these approaches.
e-Voting Requirements and Compliance by the Proposed System
The generic requirements for a typical e-voting system have been defined in (Rura et al, 2016). We
present a brief description of each requirement along with an explanation of how the proposed system
fulfils it.
Privacy - Keeping an individual’s vote secret
The system leverages cryptographic properties of blockchain to achieve privacy of a voter. More
specifically, as voter is registered into the system, a voter hash is generated by blockchain which is the
unique identifier of a voter into the blockchain, and is protected from misuse due to collision resistance
property of the cryptographic hash. Due to this, the traceability of a vote is also non-trivial thereby
protecting the voter when under duress.
Eligibility - Allowing only registered voters to vote, with each such voter voting only once
All eligible users are required to register using unique identifiers such as government-issued documents to
assert their eligibility. In addition to this, our system implements strong authentication mechanism using
finger printing technology to assert that only authorized voters can access the system. Furthermore, the
use of biometrics also enables the system to protect against double voting.
Receipt Freeness - Voters should be unable to prove to a third party that they voted in a
particular way
The proposed system enables a voter to vote as per their choice and creates a cryptographic hash for each
such event (transaction). This is important to achieve verifiability i.e. to verify if a certain vote was
included in the count. However, possession of this hash does not allow to extract information about the
way voter has voted.
Convenience - Voters must be able to vote easily, and everyone who is eligible must be
able to vote
The system has been implemented using a user friendly web based interface with the voting process
requiring minimal input from the user. For instance, fingerprinting is implemented for authentication
mechanism to avoid the requirement to remember username/passwords. Furthermore, the overall process
is integrated which enables the user to interact with it in a seamless manner.
Verifiability - The ability to trust the vote tallying process
Upon casting their vote successfully, a user is provided with their unique transaction ID in the form of a
cryptographic hash. A user can use this transaction ID to track if their vote was included in the tallying
process. However, this process does not enable a user to view how they voted which has been adopted to
mitigate threats when under duress.
The analysis presented above highlights the performance of the proposed system with respect to the
specific requirements of e-voting. It also highlights the significance of defining characteristics of
blockchain and their profound role in achieving the cornerstones of an efficient e-voting system.
Therefore, we believe the work presented here makes significant contribution to the existing knowledge
with respect to the application of blockchain technology to achieve a secure digital voting system.
RELATED WORKS
In (Kiayias & Yung, 2002), a self-tallying voting system is proposed that does not require any trusted
third parties for vote aggregation and any private channel for voter-to-voter privacy. The proposed
protocol involves extensive computation. In (Hao et al, 2010) a two round protocol is proposed that
computes the tally in two rounds without using a private channel or a trusted third party. The protocol is
efficient in terms of amputation and bandwidth consumption but is neither robust nor fair in certain
conditions (Dalia et al, 2012). In (Dalia et al, 2012) a protocol is proposed to improve the robustness and
fairness of the two round protocol (Hao et al, 2010). In (Shahandashti & Hao, 2016), authors propose E2E
verifiable voting system named DRE-ip (DRE-i with enhanced privacy), that overcomes limitations of
DRE-i (Chaum et al, 2008). Instead of pre-computing ciphertexts, DRE-ip encrypts the vote on the fly
during voting process. DRE-ip achieves E2E verifiability without TAs, but at the same time provides a
significantly stronger privacy guarantee than DRE-i. In (Chaum, 2004) end-to-end verifiability is
achieved through the Mixnet protocol (Chaum, 1981) that recovers the plaintext ballot in an unlikable
manner by randomizing the ciphertext through a chain of mix servers.
Scantegrity is proposed in (Chaum et al, 2008) that achieves end-to-end (E2E) verifiability with
confirmation codes that allow voters to prove to themselves that their ballots are included in the final tally
as they really are. Another scheme Prêt à Voter based on (Chaum, 2004) is proposed in (Chaum et al,
2005) that ensures privacy by constructing the ballot with two columns i.e. voting options are listed in one
column and the voter's choice is entered in an adjacent column. The work in (Adida & Rivest, 2006) is
based on Prêt à Voter but using homomorphic tabulation and it uses scratch stripes to allow off-line
auditing of ballots. Other systems that have been proposed for electronic voting include: Bingo Voting
(Bohli et al, 2007), Helios (Adida, 2008), DRE-i (Hao et al, 2014 ) and DRE-ip (Shahandashti & Hao,
2016), Star-Vote (Bell et al, 2013) and (Sandler et al, 2008) to name a few.
Fig. 1 Architecture for proposed e-voting system.
The existing approaches perform well for end-to-end verifiability without compromising the privacy of
voters. In (McCorry et al, 2017), authors presented the implementation of decentralized and self-tallying
internet voting protocol over the blockchain using Ethereum. Authors used the openvote (Chaum et al,
2008) e-voting approach as their baseline.
The focus of our research is to explore the exciting opportunities presented by blockchain technologies by
investigating their application in diverse application domains. Within this context, this paper presents our
efforts to develop an e-voting system by leveraging blockchain technology. To this end, our proposed
scheme fulfils the specific requirements for e-voting as discussed in section 2 and illustrated further in the
following sections.
PROPOSED SYSTEM DEISGN
The proposed e-voting system is based on the well-established Prêt à Voter e-voting approach identified
in (Ryan, 2008). The system has been designed to support a voting application in the real world
environment taking into account specific requirements such as privacy, eligibility, convenience, receiptfreeness and verifiability. The proposed system aims to achieve secure digital voting without
compromising its usability. Within this context, the system is designed using a web-based interface to
facilitate user engagement with measures such as finger printing to protect against double voting. With a
clear need to administer the voters, constituencies and candidates for constituencies, a user-friendly
administrator interface is implemented to enable ease of access. Furthermore, the system allows all voters
equal rights of participation and develops a fair and healthy competition among all the candidates while
keeping the anonymity of the voters preserved. The cryptographic hash of the transaction (ID) is emailed
to the voter as a proof that the vote has been casted which may later on be tracked outside the premises of
the constituency.
Detailed Description of the Layered Approach
The proposed e-voting system architecture is presented in Fig. 1 and has been divided into several layers
to achieve modular design. These layers are described below;
User Interaction and Front-end Security layer is responsible for interacting with a voter (to support vote
casting functions) and the administrator (to support functions pertaining to administering the election
process). It encapsulates two key functions i.e. authentication and authorization of the users (voters and
administrators) to ensure that the access to the system is restricted to legitimate users in accordance with
the predefined access control policies. A number of different methods can be applied to achieve this
function ranging from basic username/password to more advanced such as fingerprinting or iris
recognition. Therefore these are rendered specific to individual implementation of the proposed
architecture. Overall, this layer serves as the first point of contact with the users and is responsible for
validating user credentials as governed by the system-specific policies.
Access Control Management layer is envisaged to facilitate layer 1 and layer 3 by providing services
required for these layers to achieve their expected functions. These services include roles definition, their
respective access control policies and voting transaction definitions. The role definition and management
provides core support for the access control functions implemented by layer 1 whereas the voting
transaction definitions support the blockchain based transaction mapping and mining performed at the
layer 3. Overall, this layer enables a coherent function of the proposed system by providing the
foundations required by individual layers.
e-Voting Transaction Management layer is the core layer of the architecture where the transaction for evoting constructed at Role Management / Transactions layer is mapped onto the blockchain transaction to
be mined. This mapped transaction also contains the credentials provided by a voter at layer 1 for
authentication. An example of such data can be the fingerprint of the voter. This data is then used to
create the cryptographic hash and contributes towards creating the transaction ID. The verification of such
credentials is envisioned to be achieved at User Interaction and Front-end Security layer (layer 1). A
number of virtual instances of nodes are involved in the process of mining to get this transaction finally
enter into the chain.
Ledger Synchronization layer synchronizes Multichain ledger with the local application specific database
using one of the existing database technologies. Votes cast are recorded in the data tables at the backend
of the database. Voters are able to track their votes using the unique identifier provided to them as soon as
their vote is mined and added into the blockchain ledger. The security considerations of the votes are
based on block-chain technology using cryptographic hashes to secure end-to-end communication. Voting
results are also stored in the application’s database with the view to facilitate auditing and any further
operations at a later stage.
The Voting Process
We now describe a typical interaction of a user with the proposed scheme based on our current
implementation of the system. Typically, a voter logs into the system by providing his/her thumb
impression. If the match is found, the voter is then presented with a list of available candidates with the
option to cast vote against them. On the contrary, if the match is unsuccessful, any further access would
be denied. This function is achieved using appropriate implementation of the authentication mechanism
(fingerprinting in this case) and predefined role based access control management. Furthermore, it is also
envisioned that a voter is assigned to their specific constituency and this information is used to develop
the list of candidates that a voter can vote for. The assignment of voter to a constituency is rendered an
offline process and therefore out of scope of this research.
After a successful vote-cast, it is mined by multiple miners for validation following which valid and
verified votes are added into public ledger. The security considerations of the votes are based on
blockchain technology using cryptographic hashes to secure end-to-end verification. To this end, a
successful vote cast is considered as a transaction within the blockchain of the voting application.
Therefore, a vote cast is added as a new block (after successful mining) in the blockchain as well as being
recorded in data tables at the backend of the database. The system ensures only one-person, one-vote
(democracy) property of voting systems. This is achieved by using the voter’s unique thumbprint, which
is matched at the beginning of every voting attempt to prevent double voting. A transaction is generated
as soon as the vote is mined by the miners which is unique for each vote. If the vote is found malicious it
is rejected by miners.
After validation process, a notification is immediately sent to the voter through message or an email
providing the above defined transaction id by which user can track his/her vote into the ledger. Although
this functions as a notification to the voter however it does not enable any user to extract the information
about how a specific voter voted thereby achieving privacy of a voter. It is important here to note that
cryptographic hash for a voter is the unique hash of voter by which voter is known in the blockchain. This
property facilitates achieving verifiability of the overall voting process. Furthermore, this id is hidden and
no one can view it even a system operator cannot view this hash therefore achieving privacy of individual
voters.
Fig. 2 Asset creation using Multichain
IMPLEMENTATION AND EVALUATION
Implementation
The implementation of the proposed system has been carried out within a controlled environment with a
web-based application created to serve as the front end application enabling the users to interact in a
convenient manner. This application is implemented via Java EE within the Netbeans platform with
native Glassfish server used for hosting the application. Glassfish managed server side container for
holding the application’s EJBs and the data source. The application uses a MySQL as the backend
database for the application and contains the data entered manually by an admin such as the voter details,
constituency details and the information about different political parties running for the election. An
application screenshot demonstrating the admin function to view list of eligible voters is presented in Fig.
2. In addition to manual entries, the application also supports importing data using MS Excel spread
sheets to perform bulk import in view of the size of the data in real-world voting scenarios. We have used
Multichain as the blockchain platform to create a private blockchain for this application which is used for
recording the voting transactions. This choice is influenced by the ease of use provided by this platform
and therefore it was easily integrated into our proposed architecture.
Evaluation and Experimentation
The primary objective of evaluation was to assess the performance of the system in view of the e-voting
system requirements presented in section 2 and to identify any considerations with regards to its
application in a real world scenario. The experimentation consisted of multiple steps i.e. conducting
multiple transactions, verification of transactions, mining transactions into blockchain, reflection of the
changes made in the public ledger to all the nodes in the network and the usability of the system.
A test run was made directly at Multichain by starting from asset creation. An outcome of this is
demonstrated by Fig. 3. We can refer these assets as votes. Since Multichain by default ideally suits to
cryptocurrency, therefore we wrote our API’s to design it in the context of vote. In order to perform
transaction in Multichain, we identified the address and the balance in the address of the node of
Multichain from where the asset (vote) will be sent.
While sending the asset to the address, the transaction hash was generated carrying the transfer of vote.
The balance of the receiving node was incremented by one vote (asset). The transaction becomes a part of
the public ledger which shows that it has been mined. A sample transaction within the proposed system is
presented by Fig. 3. Since our customized API for asset creation is designed in such a way that an address
can have at max only one vote (asset), therefore, it will not be possible for a voter to caste multiple vote
unless the node receives it from some other address which is only allowed in the case of the candidate.
Fig. 3 A sample transaction information for the proposed system
CONCLUSION AND FUTURE WORK
Electronic voting has been used in varying forms since 1970s with fundamental benefits over paper based
systems such as increased efficiency and reduced errors. With the extraordinary growth in the use of
blockchain technologies, a number of initiatives have been made to explore the feasibility of using
blockchain to aid an effective solution to e-voting. This paper has presented one such effort which
leverages benefits of blockchain such as cryptographic foundations and transparency to achieve an
effective solution to e-voting. The proposed approach has been implemented with Multichain and in-
depth evaluation of approach highlights its effectiveness with respect to achieving fundamental
requirements for an e-voting scheme.
In continuation of this work, we are focused at improving the resistance of blockchain technology to
‘double spending’ problem which will translate as ‘double voting’ for e-voting systems. Although
blockchain technology achieves significant success in detection of malleable change in a transaction
however successful demonstration of such events have been achieve which motivates us to investigate it
further. To this end, we believe an effective model to establish trustworthy provenance for e-voting
systems will be crucial to achieve an end-to-end verifiable e-voting scheme. The work to achieve this is
underway in the form of an additional provenance layer to aid the existing blockchain based
infrastructure.
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AUTHOR BIOGRAPHIES
Kashif Mehboob Khan is a PhD student in information security at the N.E.D. University
Karachi, Pakistan. Kashif graduated in Computer Engineering from Sir Syed University of Engineering &
Technology in 2005-2006 followed by Master in C.S. & I.T. from N.E.D University of Engineering &
Technology in 2009.
Junaid Arshad is a Senior Lecturer in cyber security emphasising impact of novel and emerging
technological paradigms such as blockchain, distributed systems, cloud computing and big data.. He has
worked as distributed systems security specialist for a number of EU funded projects focusing on mitigating
specific security threats to the project partners. Dr. Junaid Arshad has been actively involved in publishing
high quality research within this field and has a number of publications at high quality venues including
journals, book chapter, conferences and workshops. Dr. Junaid Arshad has served on Program and Review
Committee of a number of journals and conferences.
Muhammad Mubashir Khan is an Associate Professor in the Department of Computer Science
and Information Technology at NED University of Engineering and Technology, Karachi Pakistan. He
received his PhD degree in Computing from University of Leeds, UK in 2011. He did postdoctoral research
in Quantum Information Group University of Leeds, UK in 2015-16. His current research interests include
Network and Information Security, Cybersecurity and Quantum Cryptography.
sensors
Review
Blockchain for Electronic Voting System—Review and Open
Research Challenges
Uzma Jafar * , Mohd Juzaiddin Ab Aziz and Zarina Shukur
Faculty of Information Science and Technology, The National University of Malaysia, Bangi 43600, Malaysia;
juzaiddin@ukm.edu.my (M.J.A.A.); zarinashukur@ukm.edu.my (Z.S.)
* Correspondence: uzmajafar@gmail.com
Citation: Jafar, U.; Aziz, M.J.A.;
Shukur, Z. Blockchain for Electronic
Voting System—Review and Open
Research Challenges. Sensors 2021, 21,
5874. https://doi.org/10.3390/
s21175874
Academic Editors: Hong-Ning Dai,
Abstract: Online voting is a trend that is gaining momentum in modern society. It has great potential
to decrease organizational costs and increase voter turnout. It eliminates the need to print ballot
papers or open polling stations—voters can vote from wherever there is an Internet connection.
Despite these benefits, online voting solutions are viewed with a great deal of caution because
they introduce new threats. A single vulnerability can lead to large-scale manipulations of votes.
Electronic voting systems must be legitimate, accurate, safe, and convenient when used for elections.
Nonetheless, adoption may be limited by potential problems associated with electronic voting systems. Blockchain technology came into the ground to overcome these issues and offers decentralized
nodes for electronic voting and is used to produce electronic voting systems mainly because of
their end-to-end verification advantages. This technology is a beautiful replacement for traditional
electronic voting solutions with distributed, non-repudiation, and security protection characteristics.
The following article gives an overview of electronic voting systems based on blockchain technology.
The main goal of this analysis was to examine the current status of blockchain-based voting research
and online voting systems and any related difficulties to predict future developments. This study
provides a conceptual description of the intended blockchain-based electronic voting application and
an introduction to the fundamental structure and characteristics of the blockchain in connection to
electronic voting. As a consequence of this study, it was discovered that blockchain systems may
help solve some of the issues that now plague election systems. On the other hand, the most often
mentioned issues in blockchain applications are privacy protection and transaction speed. For a
sustainable blockchain-based electronic voting system, the security of remote participation must
be viable, and for scalability, transaction speed must be addressed. Due to these concerns, it was
determined that the existing frameworks need to be improved to be utilized in voting systems.
Jiajing Wu and Hao Wang
Keywords: electronic voting; security; blockchain-based electronic voting; privacy; blockchain
technology; voting; trust
Received: 6 July 2021
Accepted: 25 August 2021
Published: 31 August 2021
Publisher’s Note: MDPI stays neutral
with regard to jurisdictional claims in
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Copyright: © 2021 by the authors.
Licensee MDPI, Basel, Switzerland.
This article is an open access article
distributed under the terms and
conditions of the Creative Commons
Attribution (CC BY) license (https://
creativecommons.org/licenses/by/
4.0/).
1. Introduction
Electoral integrity is essential not just for democratic nations but also for state voter’s
trust and liability. Political voting methods are crucial in this respect. From a government
standpoint, electronic voting technologies can boost voter participation and confidence
and rekindle interest in the voting system. As an effective means of making democratic
decisions, elections have long been a social concern. As the number of votes cast in real life
increases, citizens are becoming more aware of the significance of the electoral system [1,2].
The voting system is the method through which judges judge who will represent in political
and corporate governance. Democracy is a system of voters to elect representatives by
voting [3,4]. The efficacy of such a procedure is determined mainly by the level of faith
that people have in the election process. The creation of legislative institutions to represent
the desire of the people is a well-known tendency. Such political bodies differ from student
unions to constituencies. Over the years, the vote has become the primary resource to
express the will of the citizens by selecting from the choices they made [2].
Sensors 2021, 21, 5874. https://doi.org/10.3390/s21175874
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The traditional or paper-based polling method served to increase people’s confidence
in the selection by majority voting. It has helped make the democratic process and the electoral system worthwhile for electing constituencies and governments more democratized.
There are 167 nations with democracy in 2018, out of approximately 200, which are either
wholly flawed or hybrid [5,6]. The secret voting model has been used to enhance trust in
democratic systems since the beginning of the voting system.
It is essential to ensure that assurance in voting does not diminish. A recent study
revealed that the traditional voting process was not wholly hygienic, posing several questions, including fairness, equality, and people’s will, was not adequately [7] quantified and
understood in the form of government [2,8].
Engineers across the globe have created new voting techniques that offer some anticorruption protection while still ensuring that the voting process should be correct. Technology introduced the new electronic voting techniques and methods [9], which are essential
and have posed significant challenges to the democratic system. Electronic voting increases
election reliability when compared to manual polling. In contrast to the conventional
voting method, it has enhanced both the efficiency and the integrity of the process [10].
Because of its flexibility, simplicity of use, and cheap cost compared to general elections,
electronic voting is widely utilized in various decisions [11]. Despite this, existing electronic
voting methods run the danger of over-authority and manipulated details, limiting fundamental fairness, privacy, secrecy, anonymity, and transparency in the voting process. Most
procedures are now centralized, licensed by the critical authority, controlled, measured,
and monitored in an electronic voting system, which is a problem for a transparent voting
process in and of itself.
On the other hand, the electronic voting protocols have a single controller that oversees
the whole voting process [12]. This technique leads to erroneous selections due to the
central authority’s dishonesty (election commission), which is difficult to rectify using
existing methods. The decentralized network may be used as a modern electronic voting
technique to circumvent the central authority.
Blockchain technology offers a decentralized node for online voting or electronic
voting. Recently distributed ledger technologies such blockchain were used to produce
electronic voting systems mainly because of their end-to-end verification advantages [13].
Blockchain is an appealing alternative to conventional electronic voting systems with
features such as decentralization, non-repudiation, and security protection. It is used to
hold both boardroom and public voting [8]. A blockchain, initially a chain of blocks, is
a growing list of blocks combined with cryptographic connections. Each block contains
a hash, timestamp, and transaction data from the previous block. The blockchain was
created to be data-resistant. Voting is a new phase of blockchain technology; in this area,
the researchers are trying to leverage benefits such as transparency, secrecy, and nonrepudiation that are essential for voting applications [14]. With the usage of blockchain for
electronic voting applications, efforts such as utilizing blockchain technology to secure and
rectify elections have recently received much attention [15].
The remainder of the paper is organized as follows. Section 2 explains how blockchain
technology works, and a complete background of this technology is discussed. How
blockchain technology can transfer the electronic voting system is covered in Section 3.
In Section 4, the problems and their solutions of developing online voting systems are
identified. The security requirements for the electronic voting system are discussed in
Section 5, and the possibility of electronic voting on blockchain is detailed in Section 6.
Section 7 discusses the available blockchain-based electronic voting systems and analyzes
them thoroughly. In Section 8, all information related to the latest literature review is
discussed and analyzed deeply. Section 9 addresses the study, open issues, and future
trends. Furthermore, in the end, Section 10 concludes this survey.
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2. Background
The first things that come to mind about the blockchain are cryptocurrencies and
2. Background
smart contracts
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in blocks
are are formed
theremains
data remains
unchanged.
In blockchain
solutions,
stored
in blocks
from
all the
validated
transactions
during
creation,
which
means
no can
one can insert,
formed from
all the
validated
transactions
during
theirtheir
creation,
which
means
no one
delete
or alter
transactions
in already
an already
validated
block
without
it being
noticed [24]. The
insert, delete
or alter
transactions
in an
validated
block
without
it being
noticed
initial
zero-block,
called
“genesis
block,”
usually
contains
some
network
[24]. The initial
zero-block,
called
thethe
“genesis
block,”
usually
contains
some
network
set-settings, for
example,
the
initial
set
of
validators
(those
who
issue
blocks).
tings, for example, the initial set of validators (those who issue blocks).
aretodeveloped
be used in aenvironment.
distributed environment.
It is
Blockchain Blockchain
solutions aresolutions
developed
be used intoa distributed
It is asthat nodes
contain
identical
and form network
a peer-to-peer
network
sumed that assumed
nodes contain
identical
data and
form data
a peer-to-peer
without
a cen- without a
central
authority.algorithm
A consensus
algorithm
is used
to reach anon
agreement
on data
blockchain data
tral authority.
A consensus
is used
to reach
an agreement
blockchain
that
is
fault-tolerant
in
the
presence
of
malicious
actors.
Such
consensus
is
called
that is fault-tolerant in the presence of malicious actors. Such consensus is called Byzan- Byzantine
fault tolerance, named after the Byzantine Generals’ Problem [25]. Blockchain solutions use
different Byzantine fault tolerance (BFT) consensus algorithms: Those that are intended to
be used in fully decentralized self-organizing networks, such as cryptocurrency platforms,
Sensors 2021, 21, 5874
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use algorithms such as proof-of-work or proof-of-stake, where validators are chosen by
an algorithm so that it is economically profitable for them to act honestly [26]. When the
network does not need to be self-organized, validators can be chosen at the network setup
stage [27]. The point is that all validators execute all incoming transactions and agree on
achieving results so that more than two-thirds of honest validators need to decide on the
outcome.
Public key cryptography is used mainly for two purposes: Firstly, all validators own
their keypairs used to sign consensus messages, and, secondly, all incoming transactions (requests to modify blockchain data) have to be signed to determine the requester. Anonymity
in a blockchain context relates to the fact that anyone wanting to use cryptocurrencies just
needs to generate a random keypair and use it to control a wallet linked to a public key [28].
The blockchain solution guarantees that only the keypair owner can manage the funds in
the wallet, and this property is verifiable [29,30]. As for online voting, ballots need to be
accepted anonymously but only from eligible voters, so a blockchain by itself definitely
cannot solve the issue of voter privacy.
Smart contracts breathed new life into blockchain solutions. They stimulated the
application of blockchain technology in efforts to improve numerous spheres. A smart
contract itself is nothing more than a piece of logic written in code. Still, it can act as an
unconditionally trusted third party in conjunction with the immutability provided by a
blockchain data structure and distributed consensus [31]. Once written, it cannot be altered,
and all the network participants verify all steps. The great thing about smart contracts is
that anybody who can set up a blockchain node can verify its outcome.
As is the case with any other technology, blockchain technology has its drawbacks.
Unlike other distributed solutions, a blockchain is hard to scale: An increasing number
of nodes does not improve network performance because, by definition, every node
needs to execute all transactions, and this process is not shared among the nodes [32].
Moreover, increasing the number of validators impacts performance because it implies a
more intensive exchange of messages during consensus. For the same reason, blockchain
solutions are vulnerable to various denial-of-service attacks. If a blockchain allows anyone
to publish smart contracts in a network, then the operation of the entire network can be
disabled by simply putting an infinite loop in a smart contract. A network can also be
attacked by merely sending a considerable number of transactions: At some point, the
system will refuse to receive anything else. In cryptocurrency solutions, all transactions
have an execution cost: the more resources a transaction utilizes, the more expensive it will
be, and there is a cost threshold, with transactions exceeding the threshold being discarded.
In private blockchain networks [33,34], this problem is solved depending on how the
network is implemented via the exact mechanism of transaction cost, access control, or
something more suited to the specific context.
2.1. Core Components of Blockchain Architecture
These are the main architectural components of Blockchain as shown in Figure 2.
•
•
•
•
•
•
Node: Users or computers in blockchain layout (every device has a different copy of a
complete ledger from the blockchain);
Transaction: It is the blockchain system’s smallest building block (records and details),
which blockchain uses;
Block: A block is a collection of data structures used to process transactions over the
network distributed to all nodes.
Chain: A series of blocks in a particular order;
Miners: Correspondent nodes to validate the transaction and add that block into the
blockchain system;
Consensus: A collection of commands and organizations to carry out blockchain
processes.
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•
Consensus: A collection of commands and organizations to carry out blockchain pro- 5 of 22
cesses.
•
Consensus: A collection of commands and organizations to carry out blockchain processes.
Figure 2. Core components of blockchain architecture.
Figure2.2.Core
Corecomponents
componentsofofblockchain
blockchainarchitecture.
architecture.
Figure
2.2. Critical Characteristics of Blockchain Architecture
2.2.
Characteristics
ofofBlockchain
Architecture
Blockchain
architecture
has many
benefits
for all sectors that incorporate blockchain.
2.2.Critical
Critical
Characteristics
Blockchain
Architecture
Here are a variety
of
embedded
characteristics
as
described
Figure
3:that
Blockchain
architecture
has
many
benefits
for
sectors
Blockchain architecture has many benefits
forall
all
sectors
thatincorporate
incorporateblockchain.
blockchain.
Here
are
a
variety
of
embedded
characteristics
as
described
Figure
3:3: because of
•
Cryptography:
Blockchain
transactions
are authenticated
andFigure
accurate
Here are a variety
of embedded
characteristics
as described
computations
and cryptographic
evidence
between
the
parties involved;
•• Cryptography:
Blockchain
transactions
are
and
Cryptography:
Blockchain
transactions
areauthenticated
authenticated
andaccurate
accuratebecause
becauseofof
•
Immutability:
Any
blockchain
documents
cannot
be
changed
or
deleted;
computations
and
cryptographic
evidence
between
the
parties
involved;
computations and cryptographic evidence between the parties involved;
•
Provenance:
It refers to
theblockchain
fact
that every
transaction
can be
inoror
the
blockchain
•• Immutability:
Any
documents
cannot
changed
deleted;
Immutability:
Any
blockchain
documents
cannot
betracked
changed
deleted;
ledger;
•• Provenance:
Provenance:ItItrefers
referstotothe
thefact
factthat
thatevery
everytransaction
transactioncan
canbe
betracked
trackedininthe
theblockchain
blockchain
•
Decentralization:
The
entire
distributed
database
may
be
accessible
by
all
members
ledger;
ledger;
Decentralization:
The
distributed
database
may
be
by
of •the
network.
Aentire
consensus
algorithm
allows
control
of the system,
as
• blockchain
Decentralization:
The
entire
distributed
database
may
beaccessible
accessible
byall
allmembers
members
the
blockchain
network.
A
consensus
algorithm
allows
control
of
the
system,
shown of
in
core
process;
of the blockchain network. A consensus algorithm allows control of the system,asas
shown
•
Anonymity:
Ain
blockchain
network participant has generated an address rather than
shown
inthe
thecore
coreprocess;
process;
•
Anonymity:
A
blockchain
participant
has
generated
anan
address
than
a
a user
maintainsnetwork
anonymity,
especially
ingenerated
a blockchain
publicrather
sys• identification.
Anonymity: AIt blockchain
network
participant
has
address
rather
than
identification.
It maintains
anonymity,
especially
in a in
blockchain
public
system;
tem; user
a user
identification.
It maintains
anonymity,
especially
a blockchain
public
sys•
Transparency:
It
means
being
unable
to
manipulate
the
blockchain
network.
It does
•
Transparency:
It
means
being
unable
to
manipulate
the
blockchain
network.
It
does
tem;
not happen
as immense
it takes immense
computational resources
toblockchain
erase the blockchain
not•happen
as it takes
to erase
the
net- It does
Transparency:
It means computational
being unable toresources
manipulate
the blockchain
network.
work. network.
not happen as it takes immense computational resources to erase the blockchain network.
Figure 3.Figure
Characteristics
of blockchain
architecture.
3. Characteristics
of blockchain
architecture.
Characteristics of blockchain architecture.
3.Figure
How 3.Blockchain
Can Transform the Electronic Voting System
Blockchain technology fixed shortcomings in today’s method in elections made the
polling mechanism clear and accessible, stopped illegal voting, strengthened the data
protection, and checked the outcome of the polling. The implementation of the electronic
voting method in blockchain is very significant [35]. However, electronic voting carries
significant risks such as if an electronic voting system is compromised, all cast votes can
probably be manipulated and misused. Electronic voting has thus not yet been adopted on
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3. How Blockchain Can Transform the Electronic Voting System
Sensors 2021, 21, 5874
Blockchain technology fixed shortcomings in today’s method in elections made the
polling mechanism clear and accessible, stopped illegal voting, strengthened the data protection, and checked the outcome of the polling. The implementation of the electronic voting method in blockchain is very significant [35]. However, electronic voting carries sig- 6 of 22
nificant risks such as if an electronic voting system is compromised, all cast votes can
probably be manipulated and misused. Electronic voting has thus not yet been adopted
on a national
scale,
considering
allall
itsitspossible
a national
scale,
considering
possibleadvantages.
advantages.Today,
Today,there
there is
is aa viable
viable solusolution to
tion toovercome
overcomethe
therisks
risksand
andelectronic
electronicvoting,
voting,which
whichisisblockchain
blockchaintechnology.
technology.In
InFigure
Figure4, one
4, onecan
cansee
seethe
themain
maindifference
differencebetween
betweenboth
bothofof
the
systems.
traditional
voting
sys- we
the
systems.
InIn
traditional
voting
systems,
tems, have
we have
a
central
authority
to
cast
a
vote.
If
someone
wants
to
modify
or
change
the
a central authority to cast a vote. If someone wants to modify or change the
record,
record,
theycan
cando
doititquickly;
quickly;no
noone
one knows
knows how
how to
they
to verify
verify that
thatrecord.
record.One
Onedoes
doesnot
nothave
have the
the central
authority;
not possible
possible to
tohack
hackall
allnodes
central
authority;the
thedata
dataare
arestored
storedin
inmultiple
multiple nodes.
nodes. It
It is
is not
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andchange
changethe
thedata.
data.Thus,
Thus,in
in this
this way,
way,one
onecannot
cannotdestroy
destroythe
thevotes
votesand
andefficiently
efficientlyverify
verifythe
thevotes
votesby
bytally
tallywith
withother
othernodes.
nodes.
4. Traditional
vs. blockchain
system.
FigureFigure
4. Traditional
vs. blockchain
votingvoting
system.
the technology
is correctly,
used correctly,
the blockchain
is a digital,
decentralized,
If the Iftechnology
is used
the blockchain
is a digital,
decentralized,
en- encrypted,
transparent
ledger
that
can
withstand
manipulation
and
fraud.
Because
crypted, transparent ledger that can withstand manipulation and fraud. Because of theof the
distributed
structure
the blockchain,
a Bitcoin
electronic
system
reduces
the risks
distributed
structure
of the of
blockchain,
a Bitcoin
electronic
votingvoting
system
reduces
the risks
involved
with
electronic
voting
and
allows
for
a
tamper-proof
for
the
voting
system.
A
involved with electronic voting and allows for a tamper-proof for the voting system. A
blockchain-based electronic voting system requires a wholly distributed voting infrastrucblockchain-based electronic voting system requires a wholly distributed voting infrastructure. Electronic voting based on blockchain will only work where the online voting system
ture. Electronic voting based on blockchain will only work where the online voting system
is fully controlled by no single body, not even the government [36]. To sum-up, elections
is fully controlled by no single body, not even the government [36]. To sum-up, elections
can only be free and fair when there is a broad belief in the legitimacy of the power held
can only be free and fair when there is a broad belief in the legitimacy of the power held
by those in positions of authority. The literature review for this field of study and other
by those in positions of authority. The literature review for this field of study and other
related experiments may be seen as a good path for making voting more efficient in terms
related experiments may be seen as a good path for making voting more efficient in terms
of administration and participation. However, the idea of using blockchain offered a new
of administration and participation. However, the idea of using blockchain offered a new
model for electronic voting.
model for electronic voting.
4. Problems and Solutions of Developing Online Voting Systems
4. Problems and Solutions of Developing Online Voting Systems
Whether talking about traditional paper-based voting, voting via digital voting maWhether
talking
about
traditional
voting, need
voting
digital voting machines, or
an online
voting
system,paper-based
several conditions
to via
be satisfied:
chines, or an online voting system, several conditions need to be satisfied:
•
Eligibility: Only legitimate voters should be able to take part in voting;
•
Eligibility:
Only legitimate
voters
should
be able
to take part in voting;
•
Unreusability:
Each voter
can
vote only
once;
•
Unreusability:
Each
voter
can
vote
only
once;
•
Privacy: No one except the voter can obtain information about the voter’s choice;
•
Privacy:
No oneNo
except
the obtain
voter can
obtain information
about the voter’s choice;
•
Fairness:
one can
intermediate
voting results;
•
Soundness: Invalid ballots should be detected and not taken into account during
tallying;
•
Completeness: All valid ballots should be tallied correctly.
Below is a brief overview of the solutions for satisfying these properties in online
voting systems.
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4.1. Eligibility
The solution to the issue of eligibility is rather apparent. To take part in online
voting, voters need to identify themselves using a recognized identification system. The
identifiers of all legitimate voters need to be added to the list of participants. But there
are threats: Firstly, all modifications made to the participation list need to be checked so
that no illegitimate voters can be added, and secondly, the identification system should be
both trusted and secure so that a voter’s account cannot be stolen or used by an intruder.
Building such an identification system is a complex task in itself [37]. However, because
this sort of system is necessary for a wide range of other contexts, especially related to
digital government services, researchers believe it is best to use an existing identification
system, and the question of creating one is beyond the scope of work.
4.2. Unreusability
At first, glance, implementing unreusability may seem straightforward—when a voter
casts their vote, all that needs to be done is to place a mark in the participation list and not
allow them to vote a second time. But privacy needs to be taken into consideration; thus,
providing both unreusability and voter anonymity is tricky. Moreover, it may be necessary
to allow the voter to re-vote, making the task even more complex [38]. A brief overview
of unreusability techniques will be provided below in conjunction with the outline on
implementing privacy.
4.3. Privacy
Privacy in the context of online voting means that no one except the voter knows
how a participant has voted. Achieving this property mainly relies on one (or more) of the
following techniques: blind signatures, homomorphic encryption, and mix-networks [39].
Blind signature is a method of signing data when the signer does not know what they
are signing. It is achieved by using a blinding function so that blinding and signing
functions are commutative–Blind(Sign(message)) = Sign(Blind(message)). The requester
blinds (applies blinding function to) their message and sends it for signing. After obtaining
a signature for a blinded message, they use their knowledge of blinding parameters to
derive a signature for an unblinded message. Blind signatures mathematically prevent
anyone except the requester from linking a blinded message and a corresponding signature
pair with an unblinded one [40].
The voting scheme proposed by Fujioka, Okamoto, and Ohta in 1992 [41] uses a blind
signature: An eligible voter blinds his ballot and sends it to the validator. The validator
verifies that the voter is allowed to participate, signs the blinded ballot, and returns it to
the voter. The voter then derives a signature for the unblinded vote and sends it to the
tallier, and the tallier verifies the validator’s signature before accepting the ballot.
Many online voting protocols have evolved from this scheme, improving usability
(in the original method, the voter had to wait till the end of the election and send a ballot
decryption key), allowing re-voting, or implementing coercion resistance. The main threat
here is the power of the signer: There must be a verifiable log of all emitted signatures;
this information logically corresponds to the receiving of a ballot by the voter, so it should
be verified that only eligible voters receive signatures from the signer [42]. It should also
be verifiable that accounts of voters who are permitted to vote but have not taken part in
voting are not utilized by an intruder. To truly break the link between voter and ballot, the
ballot and the signature need to be sent through an anonymous channel [43].
Homomorphic encryption is a form of encryption that allows mathematical operations
to be performed on encrypted data without decryption, for example, the addition
Enc(a) + Enc(b) = Enc(a + b); or multiplication Enc(a) × Enc(b) = Enc(a × b). In the
context of online voting, additive homomorphic encryption allows us to calculate the sum
of all the voters’ choices before decryption.
It is worth mentioning here that multiplicative homomorphic encryption can generally
be used as an additive. For example, if we have choices x and y and multiplicative
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homomorphic encryption, we can select a value g and encrypt exponentiation: Enc(gx) ×
Enc(gy) = Enc(g(x + y)).
Homomorphic encryption can be used to obtain various properties necessary in
an online voting system; with regards to privacy, it is used so that only the sum of all
the choices is decrypted, and never each voter’s choice by itself. Using homomorphic
encryption for privacy implies that decryption is performed by several authorities so that
no one can obtain the decryption key; otherwise, privacy will be violated [44].
It is usually implemented with a threshold decryption scheme. For instance, let us
say that we have n authorities. To decrypt a result, we need t of them, t <= n. The protocol
assumes that each authority applies its vital part to the sum of the encrypted choices. After
t authorities perform this operation, we get the decrypted total sum of choices. In contrast
to the blind signature scheme, no anonymous channel between voters and the system is
needed. Still, privacy relies on trust in the authorities: If a malicious agreement is reached,
all voters can be deanonymized.
Mix-networks also rely on the distribution of the trust, but in another way. The idea
behind a mix-network is that voters’ choices go through several mix-servers that shuffle
them and perform an action–either decryption or re-encryption, depending on the mixnetwork type. In a decryption mix network, each mixing server has its key, and the voter
encrypts their choice like an onion so that each server will unwrap its layer of decryption.
In re-encryption mix-networks, each mix server re-encrypts the voters’ choices.
There are many mix-network proposals, and reviewing all their properties is beyond
the scope of this paper. The main point regarding privacy here is that, in theory, if at least
one mix-server performs an honest shuffle, privacy is preserved. It is slightly different
from privacy based on homomorphic encryption, where we make assumptions about the
number of malicious authorities. In addition, the idea behind mix-networks can be used to
build anonymous channels required by other techniques [45].
4.4. Fairness
Fairness in terms of no one obtaining intermediate results is achieved straightforwardly: Voters encrypt their choices before sending, and those choices are decrypted at the
end of the voting process. The critical thing to remember here is that if someone owns a
decryption key with access to encrypted decisions, they can obtain intermediate results.
This problem is solved by distributing the key among several keyholders [41]. A system
where all the key holders are required for decryption is unreliable—if one of the key holders does not participate, decryption cannot be performed. Therefore, threshold schemes
are used whereby a specific number of key holders are required to perform decryption.
There are two main approaches for distributing the key: secret sharing, where a trusted
dealer divides the generated key into parts and distributes them among key holders (e.g.,
Shamir’s Secret Sharing protocol); and distributed key generation, where no trusted dealer
is needed, and all parties contribute to the calculation of the key (for example, Pedersen’s
Distributed Key Generation protocol).
4.5. Soundness and Completeness
On the face of it, the completeness and soundness properties seem relatively straightforward, but realizing them can be problematic depending on the protocol. If ballots are
decrypted one by one, it is easy to distinguish between valid and invalid ones, but things
become more complicated when it comes to homomorphic encryption. As a single ballot is
never decrypted, the decryption result will not show if more than one option was chosen
or if the poll was formed so that it was treated as ten choices (or a million) at once. Thus,
we need to prove that the encrypted data meets the properties of a valid ballot without
compromising any information that can help determine how the vote was cast. This task
is solved by zero-knowledge proof [46]. By definition, this is a cryptographic method of
proving a statement about the value without disclosing the value itself. More specifically,
range proofs demonstrate that a specific value belongs to a particular set in such cases.
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The properties described above are the bare minimum for any voting solution. But
all the technologies mentioned above are useless if there is no trust in the system itself.
A voting system needs to be fully verifiable to earn this trust, i.e., everyone involved can
ensure that the system complies with the stated properties. Ensuring verifiability can
be split into two tasks: personal, when the voter can verify that their ballot is correctly
recorded and tallied; and universal, when everyone can prove that the system as a whole
works precisely [47]. This entails the inputs and outputs of the voting protocol stages being
published and proof of correct execution. For example, mix-networks rely on proof of
correct shuffling (a type of zero-knowledge proof), while proof of correct decryption is
also used in mix-networks and threshold decryption. The more processes that are open to
public scrutiny, the more verifiable the system is. However, online voting makes extensive
use of cryptography, and the more complex the cryptography, the more obscure it is for
most system users [48]. It may take a considerable amount of time to study the protocol
and even more to identify any vulnerabilities or backdoors, and even if the entire system is
carefully researched, there is no guarantee that the same code is used in real-time.
Last but not least are problems associated with coercion and vote-buying. Online
voting brings these problems to the next level: As ballots are cast remotely from an
uncontrolled environment, coercers and vote buyers can operate on a large scale [49]. That
is why one of the desired properties of an online voting system is coercion resistance. It is
called resistance because nothing can stop the coercer from standing behind the voter and
controlling its actions. The point here is to do as much as possible to lower the risk of mass
interference. Both kinds of malefactors—coercers and vote buyers—demand proof of how
a voter voted. That is why many types of coercion resistance voting schemes introduce the
concept of receipt-freeness.
The voter cannot create a receipt that proves how they voted. The approaches to
implementing receipt-freeness generally rely on a trusted party—either a system or device
that hides the unique parameters used to form a ballot from the voter, so the voter cannot
prove that a particular ballot belongs to them [50]. The reverse side of this approach is that
if a voter claims that their vote is recorded or tallied incorrectly, they simply cannot prove
it due to a lack of evidence.
An overview of technologies used to meet the necessary properties of online voting systems and analysis deliberately considered the properties separately [51]. When
it comes to assembling the whole protocol, most solutions introduce a trade-off. For example, as noted for the blind signature, there is a risk that non-eligible voters will vote,
receipt-freeness contradicts verifiability, a more complex protocol can dramatically reduce
usability, etc. Furthermore, the fundamental principles of developing the solution, but
many additional aspects must be considered in a real-world system like security and
reliability of the communication protocols, system deployment procedure, access to system
components [52]. At present, no protocol satisfies all the desired properties and, therefore,
no 100% truly robust online voting system exists.
5. Security Requirements for Voting System
Suitable electronic voting systems should meet the following electronic voting requirements. Figure 5 shows the main security requirements for electronic voting systems.
5.1. Anonymity
Throughout the polling process, the voting turnout must be secured from external
interpretation. Any correlation between registered votes and voter identities inside the
electoral structure shall be unknown [20,53].
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5. Security Requirements for Voting System
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Suitable electronic voting systems should meet the following electronic voting requirements. Figure 5 shows the main security requirements for electronic voting systems.
Anonymity
Recoverabilit
y and
Identification
Accessibilit
y and
Reassuran
ce
Auditabilit
y and
Accuracy
Democrac
y/Singulari
ty
Availability
and Mobility
Security
Transparenc
y and
Fairness
Verifiable
participation
/
Authenticity
Vote-Privacy
Robustness
and Integrity
Voters
Verifiability
Figure 5. Security
requirements
forrequirements
electronic voting
system. voting system.
Figure
5. Security
for electronic
5.1. Anonymity 5.2. Auditability and Accuracy
Accuracy,
also called
demands
the declared
Throughout the
polling process,
thecorrectness,
voting turnout
must that
be secured
from results
externalcorrespond preto the election
results.
It means votes
that nobody
can identities
change theinside
votingthe
of other citizens,
interpretation. cisely
Any correlation
between
registered
and voter
that
the
final
tally
includes
all
legitimate
votes
[54],
and
that
there
is
no
definitive
tally of
electoral structure shall be unknown [20,53].
invalid ballots.
5.2. Auditability and Accuracy
5.3. Democracy/Singularity
Accuracy, also A
called
correctness,
demands
that the
declared
results
correspond
“democratic”
system
is defined
if only
eligible
voters
can vote,preand only a single
cisely to the election
results.
It
means
that
nobody
can
change
the
voting
of
other
citizens,
vote can be cast for each registered voter [55]. Another function is that no one else should
that the final tally
includes
all legitimate
votes [54], and that there is no definitive tally of
be able
to duplicate
the vote.
invalid ballots.
5.4. Vote Privacy
5.3. Democracy/Singularity
After the vote is cast, no one should be in a position to attach the identity of a voter
A “democratic”
is defined secrecy
if only eligible
voters
can
and only awhich
singlemeans that the
with itssystem
vote. Computer
is a fragile
type
of vote,
confidentiality,
vote can be castvoting
for each
registered remains
voter [55].
Another
is thatperiod
no oneaselse
should
relationship
hidden
forfunction
an extended
long
as the current rate
be able to duplicate
the
vote.
continues to change with computer power and new techniques [56,57].
5.4. Vote Privacy5.5. Robustness and Integrity
This
condition
meansbe
that
reasonably
large group
of electors
or representatives
After the vote is
cast,
no one should
in a position
to attach
the identity
of a voter
cannot
disrupt
the
election.
It
ensures
that
registered
voters
will
abstain
without problems
with its vote. Computer secrecy is a fragile type of confidentiality, which means that the
or
encourage
others
to
cast
their
legitimate
votes
for
themselves.
The
corruption
of citizens
voting relationship remains hidden for an extended period as long as the current rate conand
officials
is
prohibited
from
denying
an
election
result
by
arguing
that
some
other
tinues to change with computer power and new techniques [56,57].
member has not performed their portion correctly [58].
5.5. Robustness and Integrity
5.6. Lack of Evidence
This condition means that a reasonably large group of electors or representatives canWhile anonymous privacy ensures electoral fraud safeguards, no method can be
not disrupt the election. It ensures that registered voters will abstain without problems or
assured that votes are placed under bribery or election rigging in any way. This question
encourage others to cast their legitimate votes for themselves. The corruption of citizens
has its root from the start [59].
and officials is prohibited from denying an election result by arguing that some other
member has not
performed
theirand
portion
correctly [58].
5.7.
Transparency
Fairness
It means that before the count is released, no one can find out the details. It avoids acts
such as manipulating late voters’ decisions by issuing a prediction or offering a significant
yet unfair benefit to certain persons or groups as to be the first to know [60].
Sensors 2021, 21, 5874
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5.8. Availability and Mobility
During the voting period, voting systems should always be available. Voting systems
should not limit the place of the vote.
5.9. Verifiable Participation/Authenticity
The criterion also referred to as desirability [61] makes it possible to assess whether or
not a single voter engaged in the election [62]. This condition must be fulfilled where voting
by voters becomes compulsory under the constitution (as is the case in some countries
such as Australia, Germany, Greece) or in a social context, where abstention is deemed to
be a disrespectful gesture (such as the small and medium-sized elections for a delegated
corporate board).
5.10. Accessibility and Reassurance
To ensure that everyone who wants to vote has the opportunity to avail the correct
polling station and that polling station must be open and accessible for the voter. Only
qualified voters should be allowed to vote, and all ballots must be accurately tallied to
guarantee that elections are genuine [63].
5.11. Recoverability and Identification
Voting systems can track and restore voting information to prevent errors, delays, and
attacks.
5.12. Voters Verifiability
Verifiability means that processes exist for election auditing to ensure that it is done
correctly. Three separate segments are possible for this purpose: (a) uniform verification or
public verification [64] that implies that anybody such as voters, governments, and external
auditors can test the election after the declaration of the tally; (b) transparent verifiability
against a poll [65], which is a weaker prerequisite for each voter to verify whether their
vote has been taken into account properly.
6. Electronic Voting on Blockchain
This section provides some background information on electronic voting methods.
Electronic voting is a voting technique in which votes are recorded or counted using
electronic equipment. Electronic voting is usually defined as voting that is supported
by some electronic hardware and software. Such regularities should be competent in
supporting/implementing various functions, ranging from election setup through vote
storage. Kiosks at election offices, laptops, and, more recently, mobile devices are all
examples of system types. Voter registration, authentication, voting, and tallying must be
incorporated in the electronic voting systems Figure 6.
One of the areas where blockchain may have a significant impact is electronic voting. The level of risk is so great that electronic voting alone is not a viable option. If
an electronic voting system is hacked, the consequences will be far-reaching. Because a
blockchain network is entire, centralized, open, and consensus-driven, the design of a
blockchain-based network guarantees that fraud is not theoretically possible until adequately implemented [66]. As a result, the blockchain’s unique characteristics must be taken
into account. There is nothing inherent about blockchain technology that prevents it from
being used to any other kind of cryptocurrency. The idea of utilizing blockchain technology
to create a tamper-resistant electronic/online voting network is gaining momentum [67].
End users would not notice a significant difference between a blockchain-based voting
system and a traditional electronic voting system.
Sensors 2021, 21, 5874
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Figure 6. Blockchain voting systems architectural overview.
Figure 6. Blockchain voting systems architectural overview.
On the other hand, voting on the blockchain will be an encrypted piece of data that is
fully open and publicly stored on a distributed blockchain network rather than a single
One of the areas where blockchain may have a significant impact is electronic voting.
server. A consensus process on a blockchain mechanism validates each encrypted vote,
The level of risk is so great that electronic voting alone is not a viable option. If an elecand the public records each vote on distributed copies of the blockchain ledger [68]. The
tronic voting system is hacked, the consequences will be far-reaching. Because a blockgovernment will observe how votes were cast and recorded, but this information will not
chain
network to
is entire,
open,
andsystem
consensus-driven,
the and
design
of a blockbe restricted
policy. centralized,
The blockchain
voting
is decentralized
completely
open,
chain-based
network
guarantees
that
fraud
is
not
theoretically
possible
until
adequately
yet it ensures that voters are protected. This implies that anybody may count the votes with
implemented
As a result,
unique
must
be taken
into
blockchain [66].
electronic
voting,the
butblockchain’s
no one knows
who characteristics
voted to whom.
Standard
electronic
account.
There
is
nothing
inherent
about
blockchain
technology
that
prevents
it
from
bevoting and blockchain-based electronic voting apply to categorically distinct organizational
ingideas.
used to any other kind of cryptocurrency. The idea of utilizing blockchain technology
to create a tamper-resistant electronic/online voting network is gaining momentum [67].
End
would
not notice a significant
between a blockchain-based voting
7. users
Current
Blockchain-Based
Electronicdifference
Voting Systems
system The
and following
a traditional
electronic
voting
system. founded but mainly formed over the last
businesses
and
organizations,
On
the
other
hand,
voting
on
the
blockchain
be aanstrong
encrypted
of data
that
five years, are developing the voting sector. Allwill
share
visionpiece
for the
blockchain
is fully
open
and
publicly
stored
on
a
distributed
blockchain
network
rather
than
a
single
network to put transparency into practice. Table 1 shows the different online platforms,
server.
consensusand
process
on a blockchain
eachCurrently
encryptedavailable
vote,
theirAconsensus,
the technology
used mechanism
to develop validates
the system.
and
the
public
records
each
vote
on
distributed
copies
of
the
blockchain
ledger
[68].
blockchain-based voting systems have scalability issues. These systems can beThe
used
government
observe
votes
were are
castnot
andefficient
recorded,
this
information
not
on a smallwill
scale.
Still,how
their
systems
forbut
the
national
level will
to handle
be millions
restricted
policy. The
blockchain
voting
system
is decentralized
andsuch
completely
of to
transactions
because
they use
current
blockchain
frameworks
as Bitcoin,
open,
yet it ensures
that voters
areetc.
protected.
anybodyanalysis
may count
the
Ethereum,
Hyperledger
Fabric,
In TableThis
2 weimplies
presentthat
scalability
of famous
votes
with
blockchain
electronic
voting,
but
no
one
knows
who
voted
to
whom.
Standard
blockchain platforms. The scalability issue arises with blockchain value suggestions;
electronic
voting
andblockchain
blockchain-based
to categorically
distinct
therefore,
altering
settingselectronic
cannot bevoting
easily apply
increased.
To scale a blockchain,
organizational
ideas.
it is insufficient
to increase the block size or lower the block time by lowering the hash
complexity. By each approach, the scaling capability hits a limit before it can achieve
7. Current
Blockchain-Based
Voting
Systems such as Visa, which manages an
the transactions
needed toElectronic
compete with
companies
average
of
150
million
transactions
per
day.
Research
released
by Tataformed
Communications
The following businesses and organizations, founded
but mainly
over the
in
2018
has
shown
that
44%
of
the
companies
used
blockchain
in
their
survey
refers
last five years, are developing the voting sector. All share a strong vision for theand
blockto
general
issues
arising
from
the
use
of
new
technology.
The
unresolved
scalability
issue
chain network to put transparency into practice. Table 1 shows the different online platemerges
a barrier from
an architectural
standpoint
to blockchain
adoption
andavailapractical
forms,
theiras
consensus,
and the
technology used
to develop
the system.
Currently
implementations.
As
Deloitte
Insights
puts
it,
“blockchain-based
systems
are
comparatively
ble blockchain-based voting systems have scalability issues. These systems can be used
Blockchain’s
transaction
is afor
major
enterprises
depend
on slow.
a small
scale. Still, sluggish
their systems
are notspeed
efficient
the concern
nationalfor
level
to handlethat
millions
on
high-performance
legacy
transaction
processing
systems.”
In
2017
and
2018,
the
public
of transactions because they use current blockchain frameworks such as Bitcoin,
attained
an
idea
of
issues
with
scalability:
significant
delays
and
excessive
charging
Ethereum, Hyperledger Fabric, etc. In Table 2 we present scalability analysis of famousfor
the Bitcoin
network and
infamousissue
Cryptokitties
application
that clogged
the Ethereum
blockchain
platforms.
Thethe
scalability
arises with
blockchain
value suggestions;
blockchain network (a network that thousands of decentralized applications rely on).
Sensors 2021, 21, 5874
Table 1. Comparison of current blockchain-based electronic voting systems.
Online Voting
Platforms
Follow My
Vote
Voatz
Framework
Language
Cryptographic
Algorithm
Consensus
Protocol
Main Fe
(Online Blockchai
Audit
Anonymity
Verifiability
by Voter
Integrity
Bitcoin
C++/Python
ECC
PoW
X
X
X
X
Go/JavaScript
AES/GCM
PBFT
X
X
X
X
Luxoft
Hyperledger Fabric
Private/local
Blockchains
Hyperledger Fabric
Polys
Ethereum
Solidity
Agora
Bitcoin
Python
Polyas
NP
ECC
PET
X
X
X
X
Go/JavaScript
ECC/ElGamal
Shamir’s Secret
Sharing
ElGamal
PBFT
X
X
X
X
PoW
X
X
X
X
BFT-r
X
X
X
X
Table 2. Scalability analysis of famous blockchain platforms.
Framework
Year Release
Generation
Time
Hash Rate
Transactions Per Sec
Cryptographic
Algorithm
Bitcoin
2008
9.7 min
899.624 Th/s
4.6 max 7
ECDSA
Ethereum
Hyperledger
Fabric
Litecoin
Ripple
Dogecoin
Peercoin
2015
10 to 19 s
168.59 Th/s
15
ECDSA
High (around
165,496,835,118)
High (around 10,382,102)
Mining Difficulty
2015
10 ms
NA
3500
ECC
No mining required
2011
2012
2013
2012
2.5 min
3.5 s
1 min
10 min
1.307 Th/s
NA
1.4 Th/s
693.098 Th/s
56
1500
33
8
Scrypt
RPCA
Scrypt
Hybrid
Low 55,067
No mining required
Low 21,462
Moderate (476,560,083)
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7.1. Follow My Vote
It is a company that has a secure online voting platform cantered on the blockchain
with polling box audit ability to see real-time democratic development [69]. This platform
enables the voters to cast their votes remotely and safely and vote for their ideal candidate.
It can then use their identification to open the ballot box literally and locate their ballot
and check that both that it is correct and that the election results have been proven to be
accurate mathematically.
7.2. Voatz
This company established a smartphone-based voting system on blockchain to vote
remotely and anonymously and verify that the vote was counted correctly [70]. Voters
confirm their applicants and themselves on the application and give proof by an image
and their identification to include biometric confirmation that either a distinctive signature
such as fingerprints or retinal scans.
7.3. Polyas
It was founded in Finland in 1996. The company employs blockchain technology to
provide the public and private sectors with an electronic voting system [71]. Polyas has
been accredited as secure enough by the German Federal Office for Information Security for
electronic voting applications in 2016. Many significant companies throughout Germany
use Polyas to perform electronic voting systems. Polyas now has customers throughout
the United States and Europe.
7.4. Luxoft
The first customized blockchain electronic voting system used by a significant industry
was developed by the global I.T. service provider Luxoft Harding, Inc., in partnership with
the City of Zug and Lucerne University of Applied Sciences of Switzerland [72]. To drive
government adoption of blockchain-based services, Luxoft announces its commitment to
open source this platform and establishes a Government Alliance Blockchain to promote
blockchain use in public institutions.
7.5. Polys
Polys is a blockchain-based online voting platform and backed with transparent
crypto algorithms. Kaspersky Lab powers them. Polys supports the organization of polls
by student councils, unions, and associations and helps them spread electoral information
to the students [73]. Online elections with Polys lead to productivity in a community,
improve contact with group leaders, and attract new supporters [74]. Polys aims to reduce
time and money for local authorities, state governments, and other organizations by helping
them to focus on collecting and preparing proposals.
7.6. Agora
It is a group that has introduced a blockchain digital voting platform. It was established in 2015 and partially implemented in the presidential election in Sierra Leone in
March 2018. Agora’s architecture is built on several technological innovations: a custom
blockchain, unique participatory security, and a legitimate consensus mechanism [75]. The
vote is the native token in Agora’s ecosystem. It encourages citizens and chosen bodies,
serving as writers of elections worldwide to commit to a secure and transparent electoral
process. The vote is the Agora ecosystem’s universal token.
8. Related Literature Review
Several articles have been published in the recent era that highlighted the security and
privacy issues of blockchain-based electronic voting systems. Reflects the comparison of
selected electronic voting schemes based on blockchain.
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The open vote network (OVN) was presented by [76], which is the first deployment of
a transparent and self-tallying internet voting protocol with total user privacy by using
Ethereum. In OVN, the voting size was limited to 50–60 electors by the framework. The
OVN is unable to stop fraudulent miners from corrupting the system. A fraudulent voter
may also circumvent the voting process by sending an invalid vote. The protocol does
nothing to guarantee the resistance to violence, and the electoral administrator wants to
trust [77,78].
Furthermore, since solidity does not support elliptic curve cryptography, they used an
external library to do the computation [79]. After the library was added, the voting contract
became too big to be stored on the blockchain. Since it has occurred throughout the history
of the Bitcoin network, OVN is susceptible to a denial-of-service attack [80]. Table 3 shows
the main comparison of selected electronic voting schemes based on blockchain.
Lai et al. [81] suggested a decentralized anonymous transparent electronic voting
system (DATE) requiring a minimal degree of confidence between participants. They think
that for large-scale electronic elections, the current DATE voting method is appropriate.
Unfortunately, their proposed system is not strong enough to secure from DoS attacks
because there was no third-party authority on the scheme responsible for auditing the
vote after the election process. This system is suitable only for small scales because of
the limitation of the platform [8]. Although using Ring Signature keeps the privacy of
individual voters, it is hard to manage and coordinate several signer entities. They also
use PoW consensus, which has significant drawbacks such as energy consumption: the
“supercomputers” of miners monitor a million computations a second, which is happening
worldwide. Because this arrangement requires high computational power, it is expensive
and energy-consuming.
Shahzad et al. [2] proposed the BSJC proof of completeness as a reliable electronic
voting method. They used a process model to describe the whole system’s structure. On
a smaller scale, it also attempted to address anonymity, privacy, and security problems
in the election. However, many additional problems have been highlighted. The proof of
labor, for example, is a mathematically vast and challenging job that requires a tremendous
amount of energy to complete. Another problem is the participation of a third party since
there is a significant risk of data tampering, leakage, and unfair tabulated results, all of
which may impact end-to-end verification. On a large scale, generating and sealing the
block may cause the polling process to be delayed [8].
Gao et al. [8] has suggested a blockchain-based anti-quantum electronic voting protocol with an audit function. They have also made modifications to the code-based Niederreiter algorithm to make it more resistant to quantum assaults. The Key Generation Center
(KGC) is a certificateless cryptosystem that serves as a regulator. It not only recognizes the
voter’s anonymity but also facilitates the audit’s functioning. However, an examination
of their system reveals that, even if the number of voters is modest, the security and efficiency benefits are substantial for a small-scale election. If the number is high, some of the
efficiency is reduced to provide better security [82].
Yi [83] presented the blockchain-based electronic voting Scheme (BES) that offered
methods for improving electronic voting security in the peer-to-peer network using
blockchain technology. A BES is based on the distributed ledger (DLT) may be employed
to avoid vote falsification. The system was tested and designed on Linux systems in a
P2P network. In this technique, counter-measurement assaults constitute a significant
issue. This method necessitates the involvement of responsible third parties and is not
well suited to centralized usage in a system with many agents. A distributed process, i.e.,
the utilization of secure multipart computers, may address the problem. However, in this
situation, computing expenses are more significant and maybe prohibitive if the calculation
function is complex and there are too many participants. [84,85].
Acc
Sensors 2021, 21, 5874
Table 3. Comparison of selected electronic voting schemes based on blockchain.
Authors
Voting Scheme
BC Type
Consensus
Algorithm
Framework
Shahzad and
Crowcroft [2]
BSJC
Private
PoW
Cryptographic Algorithm
Hashing
Algorithm
Bitcoin
Not specified
SHA-256
Double
SHA-256
Gao, Zheng [8]
Anti-Quantum
Public
PBFT
Bitcoin
Certificateless Traceable Ring
Signature, Code-Based, ECC
McCorry,
Shahandashti [76]
OVN
Public
2 Round-zero
Knowledge Proof
Ethereum
ECC
Not specified
Lai, Hsieh [81]
DATE
Public
PoW
Ethereum
Yi [83]
Khan, K.M. [86]
BES
BEA
Public
Private/Public
PoW
PoW
Bitcoin
Multichain
Ring Signature, ECC,
Diffie-Hellman
ECC
Not specified
SHA-256
Not specified
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Khan, K.M. [86] has proposed block-based e-voting architecture (BEA) that conducted
strict experimentation with permissioned and permissionless blockchain architectures
through different scenarios involving voting population, block size, block generation rate,
and block transaction speed. Their experiments also uncovered fascinating findings of
how these parameters influence the overall scalability and reliability of the electronic
voting model, including interchanges between different parameters and protection and
performance measures inside the organization alone. In their scheme, the electoral process
requires the generation of voter addresses and candidate addresses. These addresses are
then used to cast votes from voters to candidates. The mining group updates the ledger of
the main blockchain to keep track of votes cast and the status of the vote. The voting status
remains unconfirmed until a miner updates the main ledger. The vote is then cast using
the voting machine at the polling station.
However, in this model, there are some flaws found. There is no regulatory authority
to restrict invalid voters from casting a vote, and it is not secure from quantum attach. Their
model is not accurate and did not care about voter’s integrity. Moreover, their scheme using
Distributed consensus in which testimonies (data and facts) can be organized into cartels
because fewer people keep the network active, a “51%” attack becomes easier to organize.
This attack is potentially more concentrated and did not discuss scalability and delays in
electronic voting, which are the main concerns about the blockchain voting system. They
have used the Multichain framework, a private blockchain derived from Bitcoin, which is
unsuitable for the nationwide voting process. As the authors mentioned, their system is
efficient for small and medium-sized voting environments only.
9. Discussion and Future Work
Many issues with electronic voting can be solved using blockchain technology, which
makes electronic voting more cost-effective, pleasant, and safe than any other network.
Over time, research has highlighted specific problems, such as the need for further work
on blockchain-based electronic voting and that blockchain-based electronic voting schemes
have significant technical challenges.
9.1. Scalability and Processing Overheads
For a small number of users, blockchain works well. However, when the network is
utilized for large-scale elections, the number of users increases, resulting in a higher cost
and time consumption for consuming the transaction. Scalability problems are exacerbated
by the growing number of nodes in the blockchain network. In the election situation, the
system’s scalability is already a significant issue [87]. An electronic voting integration will
further impact the system’s scalability based on blockchain [88,89]. Table 3 elucidates different metrics or properties inherent to all blockchain frameworks and presents a comparative
analysis of some blockchain-based platforms such as Bitcoin, Ethereum, Hyperledger Fabric, Litecoin, Ripple, Dogecoin, Peercoin, etc. One way to enhance blockchain scaling would
be to parallelize them, which is called sharding. In a conventional blockchain network,
transactions and blocks are verified by all the participating nodes. In order to enable high
concurrency in data, the data should be horizontally partitioned into parts, each known as
a shard.
9.2. User Identity
As a username, blockchain utilizes pseudonyms. This strategy does not provide
complete privacy and secrecy. Because the transactions are public, the user’s identity may
be discovered by examining and analyzing them. The blockchain’s functionality is not well
suited to national elections [90].
9.3. Transactional Privacy
In blockchain technology, transactional anonymity and privacy are difficult to accomplish [91]. However, transactional secrecy and anonymity are required in an election
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system due to the presence of the transactions involved. For this purpose, a third-party
authority required but not centralized, this third-party authority should check and balance
on privacy.
9.4. Energy Efficiency
Blockchain incorporates energy-intensive processes such as protocols, consensus, peerto-peer communication, and asymmetrical encryption. Appropriate energy-efficient consensus methods are a need for blockchain-based electronic voting. Researchers suggested
modifications to current peer-to-peer protocols to make them more energy-efficient [92,93].
9.5. Immatureness
Blockchain is a revolutionary technology that symbolizes a complete shift to a decentralized network. It has the potential to revolutionize businesses in terms of strategy,
structure, processes, and culture. The current implementation of blockchain is not without
flaws. The technology is presently useless, and there is little public or professional understanding about it, making it impossible to evaluate its future potential. All present technical
issues in blockchain adoption are usually caused by the technology’s immaturity [94].
9.6. Acceptableness
While blockchain excels at delivering accuracy and security, people’s confidence and
trust are critical components of effective blockchain electronic voting [95]. The intricacy of
blockchain may make it difficult for people to accept blockchain-based electronic voting,
and it can be a significant barrier to ultimately adopting blockchain-based electronic voting
in general public acceptance [96]. A big marketing campaign needed for this purpose to
provide awareness to people about the benefits of blockchain voting systems, so that it will
be easy for them to accept this new technology.
9.7. Political Leaders’ Resistance
Central authorities, such as election authorities and government agencies, will be
shifted away from electronic voting based on blockchain. As a result, political leaders
who have profited from the existing election process are likely to oppose the technology
because blockchain will empower social resistance through decentralized autonomous
organizations [97].
10. Conclusions
The goal of this research is to analyze and evaluate current research on blockchainbased electronic voting systems. The article discusses recent electronic voting research using
blockchain technology. The blockchain concept and its uses are presented first, followed by
existing electronic voting systems. Then, a set of deficiencies in existing electronic voting
systems are identified and addressed. The blockchain’s potential is fundamental to enhance
electronic voting, current solutions for blockchain-based electronic voting, and possible
research paths on blockchain-based electronic voting systems. Numerous experts believe
that blockchain may be a good fit for a decentralized electronic voting system.
Furthermore, all voters and impartial observers may see the voting records kept in
these suggested systems. On the other hand, researchers discovered that most publications
on blockchain-based electronic voting identified and addressed similar issues. There have
been many study gaps in electronic voting that need to be addressed in future studies.
Scalability attacks, lack of transparency, reliance on untrustworthy systems, and resistance
to compulsion are all potential drawbacks that must be addressed. As further research
is required, we are not entirely aware of all the risks connected with the security and
scalability of blockchain-based electronic voting systems. Adopting blockchain voting
methods may expose users to unforeseen security risks and flaws. Blockchain technologies
require a more sophisticated software architecture as well as managerial expertise. The
above-mentioned crucial concerns should be addressed in more depth during actual voting
Sensors 2021, 21, 5874
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procedures, based on experience. As a result, electronic voting systems should initially
be implemented in limited pilot areas before being expanded. Many security flaws still
exist in the internet and polling machines. Electronic voting over a secure and dependable
internet will need substantial security improvements. Despite its appearance as an ideal
solution, the blockchain system could not wholly address the voting system’s issues due to
these flaws. This research revealed that blockchain systems raised difficulties that needed
to be addressed and that there are still many technical challenges. That is why it is crucial
to understand that blockchain-based technology is still in its infancy as an electronic voting
option.
Author Contributions: Conceptualization, U.J., M.J.A.A. and Z.S.; methodology, U.J., M.J.A.A. and
Z.S.; formal analysis, U.J., M.J.A.A. and Z.S.; writing—original draft preparation, U.J. and M.J.A.A.;
writing—review and editing, U.J.; supervision, M.J.A.A. and Z.S. All authors have read and agreed
to the published version of the manuscript.
Funding: This research received no external funding.
Institutional Review Board Statement: Not applicable.
Informed Consent Statement: Not applicable.
Data Availability Statement: Not applicable.
Acknowledgments: This research was funded by the Malaysia Ministry of Education (FRGS/1/2019/
ICT01/UKM/01/2) and Universiti Kebangsaan Malaysia (PP-FTSM-2021)
Conflicts of Interest: The authors declare no conflict of interest.
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Recent Progress in Blockchain in Public Finance
and Taxation
Behraj Khan
Tahir Syed
National University of Computer
and Emerging Sciences, Karachi, Pakistan
behraj.khan@nu.edu.pk
National University of Computer
and Emerging Sciences & FidelAI
tahir@fidelai.com
However, after the understanding of core idea behind
blockchain, the successful acceptance of Bitcoin as one of
top cryptocurrency [2], and the reliability attributes such as
privacy, security and scalability it offers, almost all major
public as well as private sectors of the world jumped in to
explore ways in which blockchain technology would assistant
existing financial institutions.
This attraction of larger financial institutions towards
blockchain based systems made it one of emerging research
area for computer scientists in following years. As the work
it this area started, the blockchain technology was found
facing various challenges including those related to latency,
bandwidth and size ,wasted resources, security, ,throughput,
versioning and usability , hark folks and multiple chains [3].
Consequently, a research gap is still there to look for
resolution of existing issues in block-chaining. Besides, the
internal architecture of blockchain requires further work for
generalization and customization so that advantages of this
concept can be incorporated in all financial areas of public as
well as private financial institutions.
Abstract—Blockchain technology is an open-source decentralized (peer-to-peer) transaction model with offers transparency
among participants without third party validation. It is impacting
any traditional industries. This paper reviews its potential in the
public financial sector along with its technical challenges and
limitations. We also raise and identify potential questions in the
current trend, challenges and future directions for Blockchain
technology pertaining to its application to national taxation. The
work also includes core components and underlying infrastructure to address its associated challenges.
Index Terms—Blockchain, Public Finance, Taxation, Cryptocurrency, Bitcoin
I. I NTRODUCTION
Financial systems throughout the world have some things
in common: activities termed as transactions, entities involved
in such transactions and the recording of transactions in
a database or ledger. Here the role of a central authority
becomes significant to facilitate such transactions and manage
the record of those transactions in reliable manner. However,
the emergence of the blockchain as the automated mechanism
of handling and recording transactions have redefined the
ordinary financial accounting mechanism in such a way that no
any central authority is required anymore. This is being seen as
a good solution having no any risks associated with existence
of a central authority. In addition, blockchain is admired to be
a good solution having fast pace, secure method of transactions
and cryptographic redundancy of the database.
Blockchain is defined as peer-to-peer (distributed) digital
ledger of transactions based upon the principles of cryptography (Public Key Infrastructure and hashing functions). It
facilitates the recording of real-time transactions (called as
blocks), incurred among authorized participants over a certain
blockchain network without involving any centralized 3rd
party. The mechanism completely relies upon the availability
of real-time access with the help of the Internet.
This work presents the consolidated review of all studies
made under the subject area of our research questions for
last six years. It categorizes papers according to different
parameters and presents the summary of work in a clear and
easy-to-understand manner.
The concept of blockchain technology emerged in year 2008
as the underlying part of Bitcoin Cryptocurrency introduced b
an author nicknamed Satoshi Nakamoto [1]. In its initial days,
it was considered part of a cryptocurrency system.
II. D ISCOVERING WHAT SCIENTIFIC PROBLEMS EXIST THE RESEARCH QUESTIONS
The formulation process of our research questions was
repeating process. We started with general questions. However,
we modified them afterwards to make ourselves more specific
with the domain of this study.
Thus, we finally formulated four research questions (RQ),
each one of them is given as under:
• RQ1: What blockchain-based financial applications
exist?
The main research question for this review is to explore
the state-of-art applications in the areas of blockchain
especially in domain of financial services. The aim behind
this question is to get a good understanding of impenetrability of blockchain and its successes, failures and future
prospects.
• RQ2: What are core components for blockchain architecture?
The next question of this study is aimed to identify the
internal structure of blockchain, demark its core functional units and their interoperations. The major topics
to address in this question are the concepts of smart
978-1-7281-2334-9/19/$31.00 c 2019 IEEE
36
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•
•
contracts, mining nodes, hashing algorithms and other
related implementations of blockchain in public sector.
RQ3: How blockchain works for public financial sector
and e-taxation?
The third question of this research work is aimed to figure
out the feasibility of the implementation of blockchain in
the public sector. The study under this question is aimed
to analyze the mechanics of public finance systems, the
feedback of public as well as government regarding eservices and analyze the acceptability of blockchain based
e-systems for public offices.
RQ4: Is blockchain secure enough?
Our last research question of this review is based upon
the need of dependability expected from blockchain. This
question aims to explore the security measures in the
blockchain as it is self-managed and self-secure decentralized system of transactions. Thus, the huge amount of
public finance requires a highly safe and secure system.
So, this question tries to know major security concerns
in blockchain, their solutions and future prospects.
collaborating with financial technology firm based in New
York. This trend not only shows the faith of top leading
vendors in the technology sector in blockchain but speaks
volume about the potential of new idea and its impact on the
any financial institution business model.
A short account of the types of interesting applications
and projects that are undertaken by innovative and visionary
companies. Following are few examples:
Stock Exchange: Stock exchange business model is as old
as any other business model in the world. It is considered to
be the most stable sort of business model, where securities are
bought and sold while maintaining capital table and keeping
a healthy relationship with investors. Many pre-IPO, public
and private entities trade stocks in the same traditional way
which is time consuming and contingent on the involvement
of several third parties. NASDAQ has launched its own private
equity exchange NASDAQ Private Equity [6] since 2014 based
on a blockchain architecture. Utilizing the concepts of smart
contracts, they have been able to deliver a system which not
only fast, traceable and efficient but reliable too.
Another example of security exchange is that of Medici [6],
which employs the counterparty implementation of Bitcoin
2.0. The idea to get rid of the middleman entirely from
the business transactions. Eliminating involvement of any
third party broker or party. Using Counterparty protocol, the
traditional physical document requirement is removed and the
contracts, negotiations etc. are guaranteed by Smart Contracts.
. The open source community has always taken lead and
supported any new technology, blockchain technology is no
exception. Blockstream [6], is another open source project
example which prevents fragmentation using Sidechains in
security and cryptocurrencies. Whole wide variety of commodities can be registered such as securities, bonds, mortgages
and stocks.
Financial transactions are most time sensitive and critical transactions, especially in the stock exchange. Delay in
processing can have a huge financial impact. Coinsetter [6],
is an example of blockchain exchange. It uses blockchain
technology to close and complete financial transactions in
minutes which used to take up 3 to 2 working days to get
processed.
Predictive analysis is another area where blockchain applicability has been explored. Augur [6], provides it users to
purchase and sell shares before a specific outcome of the
market based on a probabilistic model. Enabling users to
make financial and economic forecasts models constructed on
collective wisdom paradigm.
Bitshares [6] are resident digital tokens in blockchain architecture and for specifying commodities or assets for example
currencies etc. Token owners might have the option of earning
interest on common commodities like natural resources (oil
gold) and other currencies (euro, dollars).
In insurance business assets should be identifiable. However,
identifiable assets registered in blockchain architecture are not
neither easy to destroy nor replicate. This is very essential in
insurance business, as one would like to verify the ownership
III. R ESEARCH Q UESTIONS D ISCUSSION AND R ESULTS
In this section, we discuss the results of our review, by
categorizing relevant papers according to their relevance to
our respective question. We present our results under each
question separately as followed.
RQ1: What blockchain based financial applications exist?
Blockchain is transforming transactions mechanism like the
internet did for information. Initially, blockchain was met
with skepticism and the financial world was caught between
promise and the reality. Bitcoin is one such example. However,
with the exponential growth of Bitcoin in early 2013 it has
grown into a market capital of roughly six billion US dollars
with a daily transactions volume of around 200,000.
Nowadays, proposals are inundating the markets from
blockchain-powered payments, identify management solutions, and many others all powered by application of
blockchain technology. The financial section is now fundamentally rethinking its business model by enabling trust and
uprooting the way we interact, transact and grow, adopting
radical transparency by removing barriers but at the same time
generating new revenue streams.
Currently three approaches are popular in the industry
besides cryptocurrency for blockchain based technology. Alternative Blockchain are primarily focused on SSL certification
authority, DNS voting system and file storage by using an
algorithm to achieve distributed consensus on a particular
digital asset. Then, there is Colored coin, an open source
project describing a class of methods to developers to create
a digital asset. Sidechains fortify the Bitcoin Contract just as
dollars and pounds are backed up by Gold.
Many Big industries names such as IBM, Samsung, Amazon
to name a few have been extensively exploring blockchain
technology for incorporating it in their line of products. Banks
are no exceptions, world’s top banks too are joining the
bandwagon including Barclays and Goldman Sacks who have
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of an asset along with history trail. Any property be it
digital or physical will be potentially registered in blockchain
mechanism to verify the ownership and validated by insurers
along with complete audit trail
One such endeavor is undertaken by a company Everledger
[6], which generates permanent ledger for diamonds. This
includes the certification along with history of transaction
history of particular diamond using blockchain technology.
The attributes which pinpoint the diamond as unique such as
height, width, weight, color, depth, etc are incorporated into
the ledger using hash function. These diamonds then can be
further cross verified by owners, claimants, law enforcement
agencies and insurance companies. The whole process is
facilitated by a web service API model which make the model
easily adaptable to layman in insurance sector.
Active work is being carried out in Internet of Things (IoT)
software section by adopting blockchain technology. Allowing
devices to keep a unique identity on a public ledger concept
has been provided by a startup company Filament [6].
Blockchain enabled solutions for supply chain industry is
another of expansion. The anti-counterfeit model can further be explored in pharmaceutical and electronics industries.
BlockVerify [6] provides such solutions to enhance transparency and traceability such as in case of luxury items i.e.
Diamonds.
Open-source projects for enterprise grade applications is
also being pursued, one such example is of Hyperledger [7].
It’s a collaborative venture started in early 2016 by Linux
Foundation which now proudly consists of more than 50
members. The central idea was to to establish a standard
framework which is cross-industry open standard distributed
ledger platform on a global scale using same code base.
This would eventually transfigure the way of transactions in
business being orchestrated across the global.
Open source implementation of a standard distributed ledger
on a permissioned blockchain framework is being developed
for the business applications. Hyperledger Fabric [7], is an
example which uses identify features, incorporate user-defined
smart contracts along with strong security and employs pluggable consensus protocols on a modular architecture.
Decentralized smart contract Hawk [?], conceals the financial transactions in a blockchain architecture by providing
privacy of transactions from everyone. A Hawk programmer
would be able to draft a private smart contract without having
any knowledge of how to implement cryptography. The Hawk
complier would generate an efficient crypto protocol automatically. These transactions would be supported by cryptography
between any contractual parties in a blockchain framework.
RQ2: What are core components for blockchain architecture?
For financial-services business incomes declining, executives are under huge shareholder weight to streamline workflows, improve confounded manual back-office courses allay administrative burdens, wha’ss more diminishing money
fetches. However, unique endeavors that present incremental
upgrades verifiably have required set sway.
RQ3: How does blockchain (with respect to e-government)
work for public financial sector? Value Added Tax (VAT)
assumes a major part inside the Indonesian state income. In
spite of its significance, it needs a multifaceted organization
technique to be done legitimately [9].
The prominent technique for the assessment organization
makes provisos which will be misused by beguiling citizens
to limit the duty paid to the govt.. The present framework
does not defer the misleading citizens to manufacture assess
solicitations that bring charge misfortune for the govt.. We tend
to utilize the blockchain innovation to frame a total exceptional
approach of actualizing the conveyed record in tax assessment
space. The arranged convention made a reasonable and secure
VAT and conjointly improved the way toward administrating
the VAT. This procedure diminishes the duty extortion and
will builds the expense consistence. The arranged framework
conjointly amplified the recognition ability of duty specialist.
Brazil, also, is at present adopting a wait-and-see approach
as to the regulation of virtual currencies, exercising some
mistake and issuing recommendations as needed. Current
regulation does not distinguish virtual currencies as legal
tender but rather treat them as investments. However, Brazilian
regulators have been warning individual investors on the risk
of purchasing such assets and course-plotting institutional
investor.
Although the tax treatment as investments seems to be
a good solution do deal with gains derived from virtual
currencies acquired for investment purposes which probably
make up most of current virtual currencies holdings , it may
be less adequate to deal with the use of such currencies as
actual payment mechanisms. On the specifics of taxation of
income related to virtual currencies, the few tax regulations
issued by the Brazilian Federal Revenue Service are in line
with the position that such currencies are not legal tender
neither Brazilian nor foreign and should therefore be treated,
for tax purposes, as an investment. Such obstacle would only
cease to exist at least in Brazil if: (i) cryptocurrencies are
recognized as national legal tender; or (ii) the tax exemption
for gains with virtual currencies (or at least barter exchanges
with virtual currencies) and its reporting needs [10].
The main issues Blockchain has yet to overcome are the
complexity of the system and a lacking number of IT specialists with the ability to create a business Blockchain.
Moreover, as common Blockchain technology is used in
cryptocurrencies, the issue of transferring it onto a more
complex system, i. Technology development is an ongoing
process, and revolutionary inventions like the Internet would
not be what they are today without considerable development
and brainstorming. Still, Blockchain is already showing many
benefits and while the main hype and buzz is concentrated
around financial services and banking, in a long time perspective it is also promising in the world of taxation. It is only
a matter of time until the revolution of Blockchain reaches
taxation on all levels.
The development of Blockchain is still at a1 very early stage
and many issues have yet to be resolved. It is an undisputable
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fact that eight years after the introduction of Bitcoin, cryptocurrencies remain the sole example of a common Blockchain
system. Digitalization of tax is gaining speed, with not only
superbly developed countries adopting [11].
The utilization of blockchain innovations publically life and
legislative administrations offers outstanding power and security edges. Contrasted with Estonia’s utilization of blockchain
innovation in help of administrative administrations, distinctive
governments are still at an early, for the most part dynamic
phase of outlining. The Estonian government’s plentiful and
changed utilization of individual blockchains to help open
administrations uncovers the innovation’s few potential points
of interes’sgoing from misrepresented straightforwardness to
technique strength to quantum versatility [12].
Thus, there’s as yet an outstanding level of vulnerability in
these nations in regards to the innovation’s usage, especially
because of it can’t be dealt with as a segregated piece
of the national IT foundation, however rather as a needy
part in an extremely bigger arrangement of administrative
administrations. In refinement, individual blockchains, similar
to the one sent in Estonia’s legislative administrations, stay
away from these regularly vitality wasteful instruments. Their
abilities and protection from tough enemies depend upon the
solid trust models and implemented security components that
are need to shield the companions from corporate inside and
outcast assaults. This approach grants higher efficeincy, in
any case it accompanies a value: security certifications of
individual blockchains can’t be essentially summed up. Their
security investigation can depend after understanding the solid
assention instrument and ramifications of various security parts
that actualize [12].
In the emerging technologies why the blockchain might
be a keystone and turbulent innovation, with the feasibility
to change the character of an interface between pecuniary
operators, we’ve offered a non-thorough execution of existing
usage of blockchain innovation. However, as sea brilliant
(refered to by Harford 2010), ”factors that expansion confide
in the public arena don’t appear to be basically a conventional factor, because of they will expand the bonds between
pack individuals, whose principle monetary achievement originates from blackmailing or constraining elective individuals”.
This analysis is upheld by Kaminska (2014), describes that
blockchain revolution has been hampered in inconsistency
from the emergence [13]. we’ve uncovered the center thoughts
at the guts of blockchain innovation also as some of the chief
imperative alternatives of open restricted record stages.
Be that as it may, the present scholarly scene still covers
a substantial range of assessments, beginning from absolute
intensity (Masters, 2015) to embedded negativity (Kaminska,
2014. These applications change from Block stream feature
chains and Ethereal to computerized character providers and
blockchain-based vote frameworks, additionally as Ripple. Regardless of those important reservations, we have a tendency to
trust that extra blockchain applications can develop inside the
near future in regions as different as craftsmanship, business
undertaking and games. what’s more, that we have featured
the social gathering connectedness of those far reaching innovative advancements, that may successfully add to social
incorporation inside the creating scene.
Blockchain innovation is likely going to wind up a swap
establishment for a few procedures that regard use of gathered
data, by assembling sets of checked, period data. In an
extremely world overflowed with data however ailing in trust,
devices region unit embarking to develop that empower a
logical osmosis, stockpiling and investigation of data, and trust
inside the viable utilization of this profitable data asset [14].
Governments round the globe square measure gazing to
counter to those mechanical improvements, exchanging some
of the physically unbroken records to dispersed record stages.
Such dynamic adjustment, once controlled satisfactorily, incorporates an energy to drive a few procedures stock-still in outdated authoritative opinions to the substances of the elegant
world. In spite of the fact that, on account of auxiliary issues,
change to blockchain innovation by open area isn’t required to
coordinate the speed of customer markets or cash foundations,
the alteration is unmistakably in progress. Tax collection, every
national and worldwide, may impressively enjoy such mechanical advances. Taxation, both national and international, could
significantly benefit from such technological advances.
From a duty viewpoint what’s imperative is that expense
organizations square measure connected with amid this discourse from the point to stay away from that at some reason inside what’s to come they’re gone up against with a
specialized stage that doesn’t meet their wants and will be
troublesome to fluctuate. Concurring the coveted speculation
would require engagement and responsibility at board level
over each the get aspect and offer feature of the exchange
and for controllers to play an enthusiastic rather than inactive part, for instance requiring the selection of shared data
game plans for prohibitive reportage or thirty-eight golf shot
monetary association saves utilized for definite settlement of
cash installments onto a common appropriated record. The
two primary issues brought up in these theories were: first
regardless of whether the appropriation of shared conveyed
records required to be created first in particular things, building
up ’verification of idea’ by apply the new innovation in settings
wherever there’s by and by no concentrated security store for
recording possession; and second that the broad reception of
common circulated records, and full misuse of their potential
for value decrease, would require an extensive reengineering
of the courses of action for clearing and settlement. near day
and age settlement will be accomplished just by expecting of
these means to be taken before exchange and doesn’t require
moving settlement onto shared appropriated records [15].
The test of applying shared dispersed record in securities
settlement is not just showing specialized practicability however moreover an organized re-engineering of business forms
over different partnerships. This paper reports the consequence
of a progression of meetings and center groups, evoking and
recording perspectives of market.
The first Bitcoin people group made bottomless out of the
”trustless” idea of the innovation (Miscione and Kavanagh
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2015) the undeniable reality that it doesn’t acknowledge
beyond any doubt focal delegates yet more up to date groups
square measure expanding the vision into one among trustempowering limited cooperatives, or distributed collaborative
organizations .
The cryptographic money is predicated on agreeable open
supply standards and shared systems that prescribe a pledge
to social shared characteristic and strategic help, however
Bitcoin’s picture has turned out to be identified with theorists,
benefit driven business visionaries, advertise fundamentalist
libertarians and innovation fetishists (Yelowitz and Wilson
2015). This refered to outlines out the forms of some key
issues that social and shared characteristic fund experts should
consider once pondering about digital money innovation [16].
In the first place, it considers claims made by Bitcoin
defenders in regards to the positive part Bitcoin will play as a
device of fiscal incorporation, or as an instrument to make new
frameworks of property rights in nations with insecure administration. In spite of this, the topic of regardless of whether
Bitcoin are frequently controlled to enable underestimated
groups and assemble new one [17]. The possibility of the reorganization of the taxation system at the global level will
go to the region of cryptocurrency, transparency of operations
will make the payment of taxes not only automatic, but also
inevitable (today the invoices represent the amounts of VAT
paid by customers, and in the future, the amount of tax will
automatically be transferred to the competent tax authority, or
a specific global or regional project) [18].
Blockchain could be a progressive change on any unified
framework. Expense organizations are intrinsically principally
in light of. Why select payroll taxation? Payroll compliance is
an ideal space for blockchain. Not only is the payroll calculation exceedingly complex, occasionally involving matching
contributions from employers, but the data involved is collected and stored centrally by multiple regulatory agencies
each of whom can and do audit the data files. More than
this, know your client (KYC) regulations and anti-money laundering, can readily be confirmed with immutable blockchain
records. This is an environment where a distributive ledger
should thrive. The payroll space appears ready for blockchain.
Foundational technologies are initially understood mainly
through the applications they support. Blockchain, like all
similar foundational technologies, is going through a four
phases development process. There are two sets of variables
guiding the development [20]: (a) The degree of perceived
novelty in the technology or application, and (b) The level
of complexity and the degree of coordination required to use
the technology or application at each stage of development.
Processes and procedures that are too new are resisted. So
too are complex applications that require a high degree of
coordination. Fig. 7 below sets out the four phases, following
from block [1] through [4] in sequence.
user to be uncomplicated, and not much different from
what is currently available.
2) Localized-Use cases: This is where foundational technologies and their applications move next. Development
tends to come first along the degree of novelty axis, not
the complexity and co- ordination axis although payroll
applications appear to be developing differently. Payroll
applications may be ready to leap-frog the localized-use
case step.
3) Replacement: The third quadrant identifies developments
that are a low degree of novelty (building on single-use
and localized-use applications), but require a significant
degree of coordination. Enterprises in this quadrant
are replacing traditional businesses, reducing cost, and
increasing availability of goods or services.
4) Transformation: The last phase in the development of
a foundational technology is when the technology supports completely novel (unforeseen) applications that
fundamentally change the nature of business and public
systems.
Currently, the payroll space has (only) two single-use case
blockchain applications,=, one in Finland (Futurice), and the
other in the US (Bitwage) [20]. There are no localizeduse cases, and no replacement or transformative applications,
although it is easy to imagine how a blockchain application
could replace much of what a payroll service provider supplies today (once a workable blockchain is constructed). A
blockchain-based model framework pointed toward taking out
just forge able archives and inadequate global trade of learning
between assess specialists, financial specialists misguidedly
apply for these public forms [21].
In money related markets it’s regular for organizations and
individuals to bring a situation into outside companies. To
maintain a strategic distance from the twofold tax assessment
of speculators on profit installment - each inside the nation
wherever the benefit is produced moreover on the grounds
that the nation of living arrangement - most governments have
gone into respective twofold tax assessment bargains, wherever
by financial specialists will assert a duty discount inside the
nation where the benefit is created.
In light-weight of the present nonattendance of an information and considering the standards gave by the blockchain
application structure (Glaser, 2017), we tend to established that
this issue exhibits a significant utilize case for a blockchain
data. on the far side the specialized practicalities, blockchain
conjointly seems, by all accounts, to be wrongfully appropriate
to the present case in light-weight of the current advances of
blockchain-based exchanges inside the general population benefit area (e.g., endorsement and dispersion of open welfare).
Contrasted with antiquated data frameworks, blockchain gives
a far reaching determination (i.e., on foundation, application
and introduction levels) that might be specially crafted with
nearly less exertion by various partners (e.g., distinctive assessment experts, money related foundations, singular clients). for
the last time, the blockchain’s unchanging log of verifiable
exchanges keeps banks from submitting wrong reports and
1) Single-Use cases: The lower left quadrant is where we
begin. Foundational technologies enter the market on the
back of an application (a single-use) that appears to the
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permits quick withdrawal of exchanges in order to find tricky
applications.
The architecture of traditional centralized databases work
as follows: the location of information, its storage, and maintenance is done at a single location, whereas, control is done
by a principal executive, which certify its probity. On other
hand, distributed databases work in a method in which the
database (or redundant copies) is distributed among distantly
located nodes. However, The Distributed ledger technology
(DLT) works in completely different manner; it’s a database
framework which facilitates the storage and splitting of records
in both: decentralized and distributed way, and in parallel to it
ensures its integrity by using concurrent-based authentication
cryptographic signatures and protocols [22].
In essence, it is the prospective of DLT to increase the
efficiency and reduce costs of reconciling soundness, which
is the mandatory phase of each certainty transaction. Albeit,
DLT became very popular due to it’s virtual currency and
widely use of application,like Bitcoin, which also reserve some
potential for many applications in other domains of finance.In
general post-trade processing, and the settlement of securities
in particular, is the area which provide the room that backoffice costs can be reduced using DLT. The simplification of
the process and security brings net benifits to end user. [22] .
Since the settlement of DLT-based system is a technology
which distinguished by network exteriorities, by a first-rate
advantage and by reducing the average costs, in symmetry
there will be some contributors of DLT-based system settlement [22]. RQ4: Is blockchain secure enough?
Blockchain operates with a ledger which used to hold all
of the transactions between networks, for the purpose of data
integrity it distributes a copy of ledger among all of network
members which helps to detect and eliminate the member tried
to maliciously tamper with the ledger.
At every transaction or a new data added to chain a
majority of the people from network must validate the purity
of transaction. One can send the important information by
using the public key encryption technique, these significantly
satisfies the proof of work problem (POW).
Blockchain innovation is actualizing applications in both
money related and non-budgetary regions [?].
[2] Kondor D, Posfoi M, Csabai I, Vatty G, ”Do The Richer Get Richer?
An empirical analysis of Bitcoin Transaction Network”, PIoS one,
9(2):e86197, 2014
[3] Swan M, Blockchain: Blueprint for a New Economy, O’Reilly Media
Inc, 2015
[4] Kitchenham, Guidelines for performing Systematic Literature Reviews
in Software Engineering, EBSE Technical Report EBSE-2007-01
[5] Tore Dyba?, Torgeir Dingsyr, Empirical studies of agile software development: A systematic review, Information and Software Technology 50
(2008) 833859
[6] Michael Crosby (Google), Nachiappan (Yahoo), Pradan Pattanayak
(Yahoo), Sanjeev Verma (Samsung Research America), Vignesh Kalyanaraman (Fairchild Semiconductor), BlockChain Technology: Beyond
Bitcoin, Berkeley 2016.
[7] Christian Cachin, Architecture of the Hyperledger Blockchain Fabric,
IBM Research - Zurich, Switzerland. July 2016.
[8] Ahmed Kosba, Andrew Miller, Elaine Shi, Zikai Wen, Charalampos
Papamanthou, The Blockchain Model of Cyptography and PrivacyPreserving Smart Contracts, IEEE, 2016.
[9] Wijaya D.A., Liu J.K., Suwarsono D.A., Zhang P. (2017) A New
Blockchain-Based Value-Added Tax System. In: Okamoto T., Yu Y.,
Au M., Li Y. (eds) Provable Security. ProvSec 2017. Lecture Notes in
Computer Science, vol 10592. Springer, Cham.
[10] Rubinstein, Flavio and Vettori, Gustavo Gonalves, Taxation of Investments in Bitcoins and Other Virtual Currencies: International Trends and
the Brazilian Approach (March 6, 2018).
[11] Ernest Frankowski, Piotr Bara?ski, MarcjannaBronowska, Blockchain
technology and its potential in taxes, December 2017, Deloitte Poland.
[12] Ivan Martinovic, Lucas Kello, Ivo Sluganovic, Blockchains for Governmental Services: Design Principles, Applications, and Case Studies,
December 2017, Oxford University Centre for Technology and Global
Affairs.
[13] Pilkington, Marc, Blockchain Technology: Principles and Applications
(September 18, 2015). Research Handbook on Digital Transformations,
edited by F. Xavier Olleros and MajlindaZhegu. Edward Elgar, 2016.
[14] Iansiti, Marco; Lakhani, Karim R. ”The Truth About Blockchain”.
Harvard Business Review. Harvard University, January 2017
[15] Mainelli, Michael and Milne, Alistair, The Impact and Potential of
Blockchain on the Securities Transaction Lifecycle (May 9, 2016).
SWIFT Institute Working Paper No. 2015-007.
[16] Scott, Brett. How can cryptocurrency and blockchain technology play
a role in building social and solidarity finance?. No. 2016-1. UNRISD
Working Paper, 2016.
[17] Pokrovskaia, N. N. ”Tax, financial and social regulatory mechanisms
within the knowledge-driven economy. Blockchain algorithms and fog
computing for the efficient regulation.” Soft Computing and Measurements (SCM), 2017 XX IEEE International Conference on. IEEE, 2017.
[18] Ainsworth, Richard Thompson and Shact, Andrew, Blockchain (Distributed Ledger Technology) Solves VAT Fraud (October 17, 2016).
Boston Univ. School of Law, Law and Economics Research Paper No.
16-41.
[19] Ainsworth, Richard Thompson and Viitasaari, Ville, Payroll Tax and
the Blockchain (March 13, 2017). Tax Notes International, March 13,
pp. 1007-1024, March 2017; Boston Univ. School of Law, Law and
Economics Research Paper No. 17-17.
[20] Ainsworth, Richard Thompson and Viitasaari, Ville, Payroll Tax the
Blockchain (March 13, 2017). Tax Notes International, March 13,
pp. 1007-1024, March 2017; Boston Univ. School of Law, Law and
Economics Research Paper No. 17-17.
[21] Hyvrinen, Hissu, Marten Risius, and Gustav Friis. ”A BlockchainBased Approach Towards Overcoming Financial Fraud in Public Sector
Services.” Business Information Systems Engineering 59.6 (2017): 441456.
[22] Benos, Evangelos, Rod Garratt, and Pedro Gurrola-Perez. ”The economics of distributed ledger technology for securities settlement.”
(2017).
[23] Understanding Modern Banking Ledgers through Blockchain Technologies: Future of Transaction Processing and Smart Contracts on the
Internet of Money, Gareth W. Peters ? ? Efstathios Panayi
IV. C ONCLUSION
Blockchain technology is the engine behind the digital
currency nowadays. It offers a complete alternative e-payment
system which not only challenges the norms of the current
financial world but also offers the transparency without compromising the security. However, this innovative idea came
with a bunch of technical limitations and challenges that
requires further research to be addressed. This review therefore
would serve as an enabler of further research based on its
compilation pf the existing art.
R EFERENCES
[1] Nakamoto, Satoshi, ”Bitcoin: A peer-to-peer electronic cash system”,
whitepaper, https://bitcoin.org/bitcoin.pdf, 2009
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https://bar.anpad.org.br
BAR − Brazilian Administration Review
Vol. 18, No. Spe, Art. 4, e200109, 2021
https://doi.org/10.1590/1807-7692bar2021200109
Special Issue on
Blockchain, Cryptocurrencies and Distributed Organizations
Research Article
Opportunities and Challenges of Using Blockchain
Technology in Government Accounting in Brazil
Paula Raymundo Prux1
Fernanda da Silva Momo1
Claudia Melati1
1
Universidade Federal do Rio Grande do Sul, Porto Alegre, RS, Brazil.
Received 08 October 2020. This paper was with the authors for one revision. Accepted 13 September 2021.
First published online 20 October 2021.
Editors-in-Chief: Carlo Gabriel Porto Bellini (Universidade Federal da Paraíba, Brazil);
Ivan Lapuente Garrido (Universidade do Vale do Rio dos Sinos, Brazil)
Guest Editors: Jorge Renato Verschoore (Universidade do Vale do Rio dos Sinos, Brazil);
Eduardo Henrique Diniz (Fundação Getúlio Vargas, EAESP, Brazil);
Ricardo Colomo-Palacios (Østfold University College, Norway)
Reviewers: Two anonymous reviewers
Editorial assistants: Kler Godoy and Simone Rafael (ANPAD, Maringá, PR, Brazil)
P. R. Prux, F. da S. Momo, C. Melati
2
ABSTRACT
New technologies lead to significant changes in how public and private organizations structure
their processes and activities. This study aims to identify the challenges and opportunities of using
blockchain technology in government accounting in Brazil. This is a descriptive research using
quantitative and qualitative data, collected through a questionnaire applied to a non-probabilistic
sample of 94 professionals. The data were submitted to descriptive statistical analysis and content
analysis, based on seven categories: technology, government accounting, security, transparency,
control, change, and knowledge. For 89.4% of respondents, blockchain can improve government
accounting and be applied to financial transactions, auditing, and asset transfers. The technology
offers the benefits of trust and control, information security, and control against fraud and
corruption. For 98.9% of the sample, the challenges of using blockchain technology in
government accounting are the lack of knowledge about the technology and its cost-benefit and
implementation, difficulties in replacing or adapting systems, and few blockchain use cases
demonstrating the technology’s use and application.
Keywords: government accounting; blockchain; opportunities; challenges
JEL Code: M4, O3
Opportunities and challenges of using blockchain technology in government accounting in Brazil
3
INTRODUCTION
The convergence of administrative procedures and digital technologies in management systems
marks the Fourth Industrial Revolution (Industry 4.0) (Schwab, 2016). The speed, reach, and
impact of technology affect institutions in all countries, including the field of accounting.
Industry 4.0 entails new operations and insights from accountants, who are discussing topics such
as disruption, blockchain, compliance, and artificial intelligence (AI) (Rikhardsson &
Yigitbasioglu, 2018). In Brazil, for example, the implementation of the Public Digital
Bookkeeping System (SPED) by the country’s federal revenue agency (RFB) has advanced the
accounting sector. The system allows data cross-checking, integrates the accounting and tax
information on taxes levied in different levels of government (federal, state, and local),
rationalizes, standardizes, and consolidates accessory obligations, and improves the process of tax
inspection (Sebold, Pioner, Schappo, & Pioner, 2012).
Technology has led to changes in both government and business sectors, offering new
management tools to improve access to information and transparency (Chahin, Cunha, Knight,
& Pinto, 2004). It has contributed to accounting processes automation increasing productivity,
efficiency, better customer service, information quality, and cost reduction (Ionescu, 2019; Lee
& Tajudeen, 2020). Blockchain technology emerged amidst this context in 2008, characterized
as a tool that ensures data reliability and security without the need for a central regulatory
authority (Nakamoto, 2008; Tapscott & Tapscott, 2016). Its core features are encryption and the
process of verifying the transactions until their registration, which makes the transaction safe and
irreversible (Swan, 2015).
According to Talwar (2015), blockchain technology allows verifying each transaction, which
could mean the end of random sampling. Thus, real-time auditing is possible since the transaction
data is recorded in the blockchain ledger (Tapscott & Tapscott, 2016). Blockchain and artificial
intelligence can transform fraud investigations and forensic accounting, issue alerts, and
investigate unusual transactions as they occur (Talwar, 2015). Therefore, as highlighted by Moura,
Brauner, and Janissek-Muniz (2020), the fact that blockchain can offer safe data storage and
management contributes to making a case for its adoption in the public sector.
This study recognizes the potential of this technology to improve government accounting and
considers the challenges of implementing projects using blockchain — lack of knowledge and use
cases, low number of capable institutions and developers, and lack of encouragement from the
public sector — as identified by Giongo and Balestro (2019). It proposes advancing the discussion
about the use of blockchain technology by exploring the perception of Brazilian professionals
working in the government. Thus, the research question guiding this study is: Considering the
perspective of experts in technology and accounting in the public sector, what are the main
opportunities and challenges of blockchain technology for government accounting?
Therefore, this work identifies the main opportunities and challenges of using blockchain in
Brazilian government accounting. It observes the current context where the public sector seeks
agility, quality, and accountability to administrative practices by resorting to smart and electronic
P. R. Prux, F. da S. Momo, C. Melati
4
government, using technology to organize public data (Melati & Janissek-Muniz, 2020). The
volume of thousands of daily transactions in the Brazilian Integrated System of Federal
Government Financial Administration (SIAFI), to mention only one of the systems in
government accounting, is a crucial element in this context, requiring technologies for more
transparency and quality of information. This study contributes to identify the perception of
public actors about blockchain. The research addresses its potential to promote security in data
storage and processing, information traceability, and government transparency (Kossow & Dykes,
2018), as well as avoiding data duplication, to generate information integrity, and to improve the
workflow (Atzori, 2018), building policies that add public value (Scholl & Bolívar, 2019).
The research uses qualitative and quantitative data collected through a questionnaire with both
open and close-ended questions, 19 in total. The non-probabilistic sample was composed of 94
professionals. The closed-ended questions were analyzed with descriptive statistics and the openended questions with content analysis.
This article is organized into five sections, including this introduction. The second section
presents the concept of blockchain in the context of government accounting, followed by the
methodology. The fourth section shows the results, and the last section offers the final
considerations.
BLOCKCHAIN AND GOVERNMENT ACCOUNTING
The concepts and discussions presented in this section are based on a literature review of the
databases BDTD/IBICT (Brazilian digital library of dissertations and theses of the Brazilian
Institute of Information in Science and Technology), Periódicos Capes, and Google Scholar. The
search was carried out from August 2018 to October 2019, using the keywords ‘blockchain,’
‘blockchain use cases,’ ‘blockchain accounting,’ and ‘blockchain public sector.’ The selected
literature is briefly presented below, describing the studies’ objectives and conclusions.
The definition of blockchain by Wright and Filippi (2015) stands out. They describe it as a
“distributed, shared, encrypted-database that serves as an irreversible and incorruptible public
repository of information” (Wright & Filippi, 2015, p. 2.) The essence of this technology is how
information is recorded. Each transaction originates a unique cryptographic key, created based
on a code verification and validation network, which guarantees a safe transaction (Swan, 2015).
The technical characteristics of this technology allow the expansion of information attributes
such as data integrity and reliability and the establishment of validation mechanisms to reduce
fraud and make accountability more precise and accessible (Nofer, Gomber, Hinz, & Schiereck,
2017; Zachariadis, Hileman, & Scott, 2019).
Blockchain can be structured into two major groups: public (permissionless) or private
(permissioned) networks. Public networks have their own rules, and their operation does not
depend on legal or regulatory aspects, while private networks are restricted to corporations — in
this case, the blockchain network follows a specific regulation of pre-selected actors to participate
Opportunities and challenges of using blockchain technology in government accounting in Brazil
5
(Formigoni, Braga, & Leal, 2017; Yermack, 2017). Thus, the cryptographic access keys for a
blockchain categorize it as being a public or private network, since the wide access and
anonymous keys are related to public networks, while the controlled keys (requesting permission
for the registration of transactions) are related to the private blockchain network (Darlington,
2021).
Regardless of how blockchain is technologically structured, the application opportunities and its
potential to redesign transactions and processes in business are outstanding (Cohen, Amorós, &
Lundy, 2017; Swan, 2015). Blockchain can be used (beyond its application in cryptocurrency) to
create smart contracts, register a variety of assets (stocks, real estate, vehicles, luxury handbags,
works of art), and even “for public records such as real estate titles, birth certificates, driver’s
licenses, and university degrees” (Yermarck, 2017, p. 8). Therefore, blockchain is considered the
new internet of business since its potential decentralization can affect the application of laws or
their implementation and the governments, organizations, and society in general in their way of
operating (Atzori, 2015; Wright & Filippi, 2015).
Giongo and Balestro (2019) approached the main characteristics of blockchain technology,
addressing its impacts on accounting and finance. After carrying out exploratory research and
interviewing three professionals, the authors observed that it was not yet possible to measure the
scope of the technology. However, they concluded that blockchain potentially affects several
areas, including finance and accounting, and stressed its application in the banking sector and
its short-term impacts in auditing. Migliorini and Rocha (2019) researched how blockchain can
be used within the accounting system, the level of acceptance of accounting professionals in the
face of new technologies, and their perception regarding blockchain. Counting on a sample of
526 participants, the authors concluded that accounting professionals still have little knowledge
about blockchain and cannot foresee the use of this technology in the field.
Biancolini, Silva, and Osti (2018) analyzed the possible uses of blockchain in public
administration, mentioning several cases and pointing out positive and negative aspects.
According to the authors, the technology is disruptive and can be widely used in the public sector,
particularly in the areas of tax and compliance, increasing transparency, and reducing transaction
costs. Bastos, Andujar, and Rode (2018) sought to identify the main impacts of blockchain as a
tool for auditing, exploring its advantages and disadvantages in the face of future challenges
regarding auditing practices. Based on systematic bibliographic research, the authors noticed an
increase in the number of financial institutions using blockchain. Bastos et al. (2018) concluded
that the characteristics of blockchain allow the implementation of continuous internal and
external audits. They also point out a lack of regulation and legal environment in many countries.
Dai and Vasarhelyi (2017) researched blockchain applications in accounting in order to discuss
how this technology can support a real-time, verifiable, and transparent accounting ecosystem.
The authors propose that blockchain is a tool to authenticate auditing information. They suggest
conducting more research on the technology’s applications and challenges in specific areas such
as government auditing.
P. R. Prux, F. da S. Momo, C. Melati
6
There is a positive and constructive relationship between the use of blockchain and the public
sector. This technology affects the social, productive, and organizational dynamics through new
tools created to solve contemporary problems. Most blockchain applications in the public sector
are related to data processing and security, new models of state regulation, and new institutional
procedures (Moura, Brauner, & Janissek-Muniz, 2020). In this sense, applying this technology in
the public sector makes it possible to develop governance models based on shared data and
distributed systems that allow, for example, more flexible government regulatory agencies and
more transparent consortia (Colchester, 2019).
Although there is an optimistic perspective in the public sector considering the technology’s
potential to change society, Atzori (2015) emphasizes weighing the risks and benefits of possible
applications as a disruptive technology for governments, avoiding utopian expectations or
technocratic reasoning traps.
The search for blockchain use cases resulted in experiences carried out in the government and
business sectors. Table 1 summarizes the literature findings on the technology’s challenges and
opportunities.
Table 1
Use cases of blockchain in accounting
Use cases
Applications
Opportunities
Challenges
References
Continuous
auditing
Financial transactions
available in real-time
More accurate and
transparent corporate
reporting
Regulatory
environment
Bastos et al.
(2018); Dai and
Vasarhelyi
(2017)
Junta Comercial do
Estado do Ceará
(Commercial
Registry Office of
the State of Ceará
— Brazil)
Protection of the
registered companies’
databases; combating
fraud
Less time spent
validating; security,
trust, and registry
immutability
Extending the
process to a larger
scope
Biancolini et al.
(2018)
Protection and sharing
data among banks;
combating fraud
Safe and fast
transactions; instant
payments
High volume of
transactions in
peak hours
Pimenta and
Seco (2019)
Platform of joint and
distributed control of
market information; realtime interaction
Increase of regulatory
transparency; safe and
auditable process;
reduction in control
failures
Expanding the
platform to the rest
of the Brazilian
public sector
Pimenta and
Seco (2019)
Rede Blockchain
do Sistema
Financeiro
Nacional
(Brazilian National
Financial System’s
Blockchain
Network)
PIER — Plataforma
de integração de
informações das
entidades
reguladoras
(Platform to
Integrate
Information of
Regulatory
Agencies)
Continues
Opportunities and challenges of using blockchain technology in government accounting in Brazil
7
Table 1 (Continued)
Use cases
Applications
Opportunities
Challenges
References
Sistema Financeiro
Digital (SFD)
(Brazilian Digital
Financial System)
Connection of banking
datacenters; real-time
transactions (24 hours)
Increase in security
and ease in banking
transactions
Cultural change to
models without
intermediaries
Biancolini et al.
(2018)
Solução Online de
Licitação (Online
Solution for Public
Procurement)
Transparency in public
purchases from
cooperatives and
membership
organizations — Bahia
Produtiva project
Automatic generation
of invitations to bid,
minutes, and
contracts, based on
stored data; online
monitoring of bidding
results
Bring technology
closer to
cooperatives and
membership
organizations;
centralize purchase
of goods and
services in the app
Biancolini et al.
(2018)
SERPRO
Blockchain
Platform
Transactions of the
Tesouro Direto
(program of the
Brazilian government to
sell government bonds)
Easy investor
registration and
access
Increase investors’
base
Brasil (2017)
Santander One Pay
FX
International transfers
for individuals
Speed in transfers;
reduction of term and
fees for foreign
exchange remittances
Include other
banking services
and expansion to
other countries
Biancolini et al.
(2018); Giongo
and Balestro
(2019)
TruBudget BNDES
Tracking money;
sharing financial
information among
institutions
Increase transparency
in public budget
allocation;
circularization in
auditing
Scale the scope to
cover all projects of
the Amazon Fund
that are in the
disbursement
stage
Arantes,
D’Almeida,
Onodera,
Moreno and
Almeida (2018)
BNDES Token
Tracking public funds
used to finance public
agencies or operations
using non-refundable
grants
More control;
facilitates monitoring
operations
Expanding to new
use cases such as
automatic tax
collection
Arantes et al.
(2018); Giongo
and Balestro
(2019)
Note. Source: Elaborated by the authors.
The use cases include continuous auditing, public procurement, tracking public funds, sharing
financial data, companies’ public registration, asset transfers, and banking transactions. Financial
institutions, especially banks, concentrate the largest number of use cases. As for the
opportunities to apply the technology in government accounting, the literature examined
revealed the use of blockchain in auditing, budgetary and financial management, public
procurement, contracts, accounting and budgetary records, financial transactions, and asset
transfers. The use cases demonstrated possible benefits, such as transparency, quality, security,
and validation of data and information, as well as a control against fraud. The challenges observed
are linked to regulation, scalability, performance, and cultural change, particularly related to the
lack of use cases.
Although the study is based on an analysis of Brazilian accounting, it is worth mentioning that
blockchain technology is being used to facilitate various processes worldwide. Examples studied
in academic research are the health platform of Estonia and the Dubai Blockchain Strategy, which
enable financial transactions through blockchain (Alcantara, Rodrigues, Lima, & Nunes, 2019).
Other cases are the new model of land ownership record in India (Thakur, Doja, Dwivedi,
Ahmad, & Khadanga, 2019), the system to track products imported from abroad into China,
P. R. Prux, F. da S. Momo, C. Melati
8
and online voting for public policy projects and accessible voting systems in Australia (Xu, Weber,
& Staples, 2019). These examples reinforce the importance of continuing and deepening the
academic research on blockchain technology and its numerous opportunities.
Based on the conceptual analysis and considering the objective of identifying forms of using
blockchain technology and the challenges of applying it in public accounting, the following
section presents the methodological path used in this research.
METHODOLOGY
This descriptive research (Gil, 2008) analyzes and describes blockchain characteristics in
government accounting, seeking relationships between the variables involved. It uses quantitative
and qualitative data in an attempt to comprehend the perceptions of experts regarding the use of
the technology in government accounting. The data was collected through a questionnaire
created on the Google Docs platform, with questions based on the literature. The questionnaire
contained six identification questions (gender, age, workplace, occupation, education
background, and level of education); two questions to assess the participant’s knowledge on
blockchain; one question about potential benefits (closed-ended question, using a five-point
scale); one question about the application of blockchain in activities of government accounting
(using a five-point scale); two questions about the challenges of using the technology; three
questions about blockchain applicability and adoption; one on whether blockchain could
improve government accounting (open-ended question, where the participant had to justify the
answer); two open-ended questions about opportunities and challenges of using blockchain in
government accounting.
After a thorough literature review focused on the studies by Migliorini and Rocha (2019) and
Aquino (2019), and from the analysis of the researched use cases, it was possible to identify
categories of blockchain technology for the context of Brazilian public accounting. Such
categories guided the development of the research questionnaire and, later, the discussion of
results.
With the definition of the research categories, it was possible to elaborate a first questionnaire,
applied with four specialists for validation: (a) the civil servant, with a master in regional
development; (b) a government accountant, with a specialization in accounting; (c) a civil servant,
PhD student in public policy; and (d) an expert, PhD in administration in the area of systems
and technology management. The first three specialists worked in the Secretariat of Planning,
Budget, and Management of the state of Rio Grande do Sul. The other specialist was a professor
at a federal university in southern Brazil. The responses led to changes in the order of questions,
improvements in the technical language used in public accounting and technology, and the text
was modified to facilitate understanding. Also, some questions were suppressed, and others
included to meet the research objectives.
Opportunities and challenges of using blockchain technology in government accounting in Brazil
9
The questionnaires were sent via email and WhatsApp to potential participants in September
2019. These professionals were contacted using data from institutional websites of state-owned
companies, and local, state, and federal agencies, seeking to cover various accounting segments
and behavioral profiles. Although the search was conducted on institutional sites of Brazilian
public agencies at the federal, state, and local levels of government, most agencies examined were
from the state of Rio Grande do Sul, given the proximity to the researchers. In Rio Grande do
Sul, the agencies analyzed more extensively were the state bank, the State Court of Accounts, and
the Federal University of Rio Grande Sul. As for other Brazilian agencies, the Ministry of
Planning and Economy and the Federal Court of Accounts stood out.
A total of 763 emails were sent, and the message introducing the questionnaire asked the
recipients to share it with other people. The responses were collected from September 9 to
October 21, 2019. A non-probabilistic sample of 94 specialists was obtained, with male
respondents counting 76.6% of the results and female respondents 23.4%. About the age group,
the highest concentration was 31 to 40 years old, with 40.4% (38 respondents), 28.7% were
between 41 and 50 years old (27 respondents), 18.1% (17 respondents) were between 51 and 71
years old, and 12.8% (12 respondents) were between 20 and 30 years old. It is worth highlighting
that, as expected, the majority of participants worked in the public sector, as shown in Table 2
below:
Table 2
Sector respondents work in
Sector of activity
Number of respondents
Percentage
Self-employment
1
1.1
Accounting association
1
1.1
Private sector
13
13.8
Public sector
79
84.0
Note. Source: Elaborated by the authors.
As for the field of training, accounting sciences and information and communication technology
stood out, with 37.2% and 24.5% (35 and 23 respondents), respectively. There were also
respondents trained in the field of administration and law. As for the level of education, the
majority of participants are well qualified, as shown in Table 3 below:
Table 3
Respondents’ education
Level of education
Number of respondents
Percentage
Degree
20
21.3
Post-degree specialization
46
48.9
Master
22
23.4
PhD
6
6.40
Note. Source: Elaborated by the authors.
P. R. Prux, F. da S. Momo, C. Melati
10
Table 4 shows the public agencies where respondents employed in the public sector work. The
majority of respondents (84%) declared to work in the public sector.
Table 4
Public agencies respondents work in
Public sector’s department/agency
Number of
respondents
Percentage
Secretariat of Planning, Budget, and Management of the state of Rio Grande do
Sul
11
14.0
Secretariat of Finance of the state of Rio Grande do Sul
7
8.9
Executive branch of the Federal District
16
20.2
Executive branch of the states of Pernambuco, Paraná, São Paulo, and Alagoas
13
16.4
Other public agencies
32
40.5
Note. Source: Elaborated by the authors.
The participants working in ‘other public agencies’ (Table 3) are employed in agencies such as
the Central Bank of Brazil, Bank of the State of Rio Grande do Sul (Banrisul), Brazilian
Development Bank (BNDES), National Institute of Information Technology, GNova —
Laboratory of Innovation of the National School of Administration (ENAP), State Court of Audit
of Rio Grande do Sul (TCE), Rio Grande do Sul Court of Justice (TJRS), Rio Grande do Sul
Regional Accounting Council (CRCRS), Municipality of Porto Alegre (in Rio Grande do Sul),
and Municipality of Monte Alto (in the state of São Paulo).
The analysis was developed based on data appreciation, tabulation, organization, and
categorization, considering the frequency of words using the MAXQDA software. After, the data
was submitted to scientific tests to obtain evidence, and statistical analyzes were performed
through descriptive statistics and data-crossings. The open-ended questions underwent content
analysis. The main elements obtained in the analysis will be presented and discussed in the next
section.
PRESENTATION AND DISCUSSION OF RESULTS
This section presents and discusses the main results obtained from the 94 questionnaires
responded. The focus is to understand how blockchain technology is applied in public agencies
and its potential benefits.
Regarding the knowledge about blockchain and the participants’ perspective on its benefits in
government accounting, most respondents (40.4%) stated that they were able to define
blockchain and could see its usability, but do not participate in projects involving this technology
in their area of work. Therefore, most respondents were familiar with the technology and its
usability, even though 17% of the respondents declared to have heard the term, but were unable
Opportunities and challenges of using blockchain technology in government accounting in Brazil
11
to define it. Among the accountants, 28.6% said they were able to define blockchain, imagine
how it works, but did not participate in projects in the area, while 22.9% declared to have heard
the term but could not offer a definition, and the same percentage could define blockchain but
did not see the applicability in government accounting. Among technology professionals, 47.8%
declared to be able to define blockchain and imagine how it works, although not engaged in
projects using the technology in their field of work, and only 4.3% had heard the term but could
not offer a definition. It is possible to observe that respondents with an ICT background are more
familiar with the concept than other participants.
Thus, the research sample suggests that knowledge about blockchain is already disseminated since
many participants knew the concept and were able to offer a definition. However, the number of
respondents who claimed to participate in projects involving blockchain in the public sector was
very low.
Most respondents reported having obtained information about the topic in journals and
newspapers, along with books, interviews, blogs, and technology forums. Some participants
mentioned watching documentaries, videos, university and specialist channels, and social media,
participating in training events, being informed through conversations in the workplace,
discussions with experts on the subject, and studying companies that work with blockchain. As
for the opportunities and benefits that may arise from the use of blockchain in government
accounting, the close-ended question offered a five-point scale (one = not applicable to five = fully
applicable). Table 5 shows that the item trust and control obtained the highest mean, 4.63.
Information security obtained 4.55 and control against fraud and corruption, 4.51.
Table 5
Opportunities and potential benefits of blockchain in government accounting
Opportunities/potential benefits
Mean
Trust and control
4.63
Information security
4.55
Control against fraud and corruption
4.51
Quality of data
4.20
Freedom of information and transparency
4.16
Efficiency
4.13
Governance
4.07
Data predictive capacity
3.45
Note. Source: Elaborated by the authors.
The opportunities were marked as fully applicable as follows: trust and control (70.2%),
information security (67%), and control against fraud and corruption (63.8%). Governance and
data predictive capacity were considered partially applicable by 39.4% of the participants. These
potential benefits are in line with the research by Biancolini et al. (2018). The authors argue that
blockchain technology may offer greater control, transparency, and security, facilitating selfprotection and inspection by the population. Regarding the application of blockchain in activities
P. R. Prux, F. da S. Momo, C. Melati
12
of government accounting, the items with the highest mean were financial transactions (4.65),
auditing (4.56), and asset transfer (4.46).
Table 6
Blockchain use in government accounting
Activities
Mean
Financial transactions
4.65
Auditing
4.56
Asset transfer
4.46
Accounting records
4.35
Compliance
4.30
Improving tax collection and inspection capacity
4.29
Budget records
4.24
Securities clearing and settlement
4.23
Contract
4.15
Settlement and reconciliation of government accounts
4.14
Automation of budgetary and financial management
3.96
Inventory control
3.96
Asset management
3.94
Public procurement
3.88
Note. Source: Elaborated by the authors.
Blockchain technology was considered fully applicable in financial transactions by 76.6% of
respondents, and auditing and asset transfer were considered activities where blockchain is fully
applicable by 63.3% and 61.7% of participants, respectively. Research by Giongo and Balestro
(2019) and Biancolini et al. (2018) demonstrated the potential, particularly in banking
institutions, of using blockchain in financial transactions and asset transfers. The fact that
participants highlighted the activity of auditing is aligned with the findings of Dai and Vasarhelyi
(2017) and Bastos et al. (2018).
Virtually all participants (98.9%) considered there are challenges regarding the use of blockchain
in government accounting. The biggest challenges pointed out were lack of knowledge about the
technology and its cost-benefit within public agencies, difficulties of implementation in order to
replace or adapt traditional systems, and a lack of use cases demonstrating the application of the
technology. These results corroborate the findings presented by Giongo and Balestro (2019).
Part of the respondents (35.1%) stated that the applicability of blockchain for accounting
purposes in their area of work or department is relevant, but it is not a strategic priority. In
contrast, 25.5% of respondents are unsure how their area or department would apply the
technology in government accounting. When asked about their perception regarding the
intention of the institution or agency they work for to adopt blockchain, 58.7% of respondents
answered negatively. Among the 41.3% of participants who considered that their agency would
Opportunities and challenges of using blockchain technology in government accounting in Brazil
13
adopt the technology were the following institutions/agencies: Central Bank of Brazil, IBRD,
BNDES, National School of Public Administration — Enap, National Institute of Information
Technology, Serpro, and Secretariat of Finance of the states of Rio Grande do Sul and Alagoas
and of the Federal District. As shown by Arantes et al. (2018) and Biancolini et al. (2018),
BNDES, Central Bank, and Serpro are already developing projects using blockchain technology.
Participants who responded positively cited the following blockchain use cases that the institution
may adopt: digital records (30.2%), auditing (16.3%), smart contracts (16.3%), and payments
(14%). The option others included: interbank transfers, registration of transactions in the capital
market, traceability, digital cooperatives, and digital identity. Most respondents (89.36%) believe
that blockchain can improve government accounting.
In the content analysis of the three open questions, the data were tabulated and organized into
categories (Bardin, 1977), according to the frequency of words (Figure 1). The seven categories of
analysis are technology, government accounting, security, transparency, control, change, and
knowledge. The analysis of each category is presented below, transcribing some responses
identified with R (respondent) and a number indicating a chronological order of respondents
established during the analysis.
Figure 1. Word cloud.
Elaborated by the authors using the software MAXQDA, based on participants’ responses (in Brazilian Portuguese).
For the technology category, the analysis considered technology and blockchain as synonyms.
Some respondents identified that this technology can bring improvements to accounting and
other areas: “Initially it would be a good idea to use blockchain identities” (R14); “Blockchain is
becoming a fundamental tool for the best use of resources and transparency in transactions, with
wide application in government” (R2); “Blockchain technology must be applied in the public
sector, at several levels, including government accounting processes” (R80).
Most participants considered that technology could help government accounting: “The
characteristics of the [blockchain] technology are aligned with the problems of government
accounting” (R83). Some respondents cited opportunities such as “the use of new technologies
for data control, transparency, and security” (R77), and “technology allows, through validation,
increased security of transactions, resulting in reliability and control of public assets” (R92). Some
participants are unsure about the topic: “It is a new technology and I still do not understand how
it could help government accounting” (R62), “due to the complexity of its implementation, and
P. R. Prux, F. da S. Momo, C. Melati
14
the lack of interest on issues such as control and improvement of public management by part of
government officials, who only pursue their own interests” (R89).
The main challenges mentioned about the technology implementation were legal regulation, the
lack of trained employees, cultural resistance in the public sector, the “remodeling of processes
and systems” (R48), and the “cost of implementation” (R81). Several respondents believe that the
technology will be increasingly applied in new use cases: “As occurred with the technology of
digital certification, it is first necessary to establish a legal regulation on the technology, then to
promote the development of APIs and applications within the scope of public administration”
(R41). “There are countless opportunities to use technologies, but it is necessary to start using
them in some applications so it is possible to assess the potential and the challenges to be
overcome” (R47). “We need to speed this up. Small advances can trigger big ones” (R51).
In addition, cultural issues stood out in the interviews: “The big challenges in adopting
blockchain are regulatory bureaucracies and outdated processes. A change of mindset and the
modernization of certain processes are necessary, in addition to obtaining support to be able to
work on these issues” (R49). In addition, “blockchain is an innovation still poorly understood by
the general public. Its implementation would bring an infinite number of benefits, such as those
described throughout the research, and would place the development and control of government
accounting on another level of efficiency and quality” (R17). Some respondents had a negative
view of blockchain: “Blockchain is more like a concept than an actual tool or technology of
practical application. It has great potential, but the frontier of its applications is still unknown. It
may not even present in practice the full theoretical potential or it may be run over by a
breakthrough innovation before it matures” (R63). The excerpt refers to the decentralization of
the process, also observed in this answer: “Blockchain technology is no man’s land. It is an affront
to institutions, and there is no clear, defined responsible body. Who is responsible for the good
or bad use of blockchain technology and infrastructure?” (R54). In addition, another respondent
cites alternatives: “Blockchain is a decentralized database. There are other models of distributed
databases that are simpler and cheaper to maintain” (R39).
Regarding use cases, some participants mentioned transparency for transactions, reduction of
failures, security in the information generated, transparency and accountability control,
integration, agility, and transfers of resources between agencies. “I believe that the use of smart
contracts can lower the cost of public procurement, and blockchain technology can create
efficient traceability in government accounting” (R88). “The benefit of blockchain in government
accounting is still incipient, but its potential, in relation to data security, costs, and process agility,
is valuable for public management” (R1).
In the category government accounting, a large part of the respondents considered that
blockchain could help improve activities, particularly offering greater reliability and timeliness in
transactions, registers, and information, “real-time accounting” (R79), “giving agility and prompt
compliance with accounting demands” (R25). However, not all respondents agree with the
technology’s capacity to promote improvements, as observed in the following statements: “The
challenges of government accounting are not related to technology, but to legal definitions and
Opportunities and challenges of using blockchain technology in government accounting in Brazil
15
changes that make a comparative analysis between historical series impossible. Today … it is
possible to track the money. The question is whether the public policy was supported; if the
needed amount was properly allocated” (R93).
This sentence resorts to one of the characteristics of blockchain (traceability and immutability of
records) and, according to Nakamoto (2008), reflects the complexity of government accounting
to meet society’s needs, including topics such as policy planning and implementation. Blockchain
characteristics are also cited in this response: “Transparent, decentralized, immutable, and
auditable records are beneficial to government accounting” (R91). Potential use in the area of
government accounting was cited, such as “registration of financial assets” (R21), “public
procurement” (R32), “compliance, audit, and security” (R57), “accounting with real-time records
and validations; transparency of accounts, transactions, and public contracts for the population,
transaction reliability, facilitating or even eliminating the need for auditing” (R58).
In terms of challenges, the respondents highlighted “making the XBRL framework compatible,
which is the technological challenge legally imposed on national public entities” (R8) and the
complexity of implementation: “In the case of the Federal Government, the biggest challenge is
the size of this, in order to cover the entire public sector. It demands a lot of IT infrastructure
and a lot of related costs” (R18). One of the respondents considered that “it is a great challenge,
but it will revolutionize government accounting” (R17).
The category security was related to the security of data, transactions, operations, and
information. The respondents mentioned improvements blockchain could bring to government
accounting such as “security, reliability, cost reduction with information security, combating
fraud” (R68). Among the potential uses, the issue of security was cited in statements such as:
“[Blockchain can be used] in financial operations, in areas that require high levels of security for
transactions over the web” (R24); “financial transactions would be more efficient and secure”
(R46); “I know little, but all critical safety processes can be improved with technology” (R66).
Such statements are in line with the analysis of blockchain’s potential benefits in public
administration. The item information security in Table 5 was significantly highlighted in the
analysis.
The category transparency refers to the promotion of transparency of information and processes.
Participants mentioned that the technology could contribute by “adding intelligence and facilities
to transparency and social participation systems” (R71). “The operating logic of blockchain is
horizontal and the creation of information is fully traceable and verifiable as to its origin. In the
case of government accounts, it is self-evident that more transparent processes have immediate
applicability in the public sector” (R36). In addition, one of the respondents added to this
category a possible transition in the work of accountants: “The transparency and trust that
blockchain technology brings must transform the day-to-day lives of people who work with
accounting, especially government accounting. The level of work should rise dramatically for the
tactical and the strategic” (R27).
P. R. Prux, F. da S. Momo, C. Melati
16
As for the category control, some of the respondents pointed out that the control of transactions
and data exchanged among public agencies, social accountability, “information control, fraud
detection, predictions” (R45) can be improved by the use of blockchain technology in
government accounting. Potential uses were “control of budgetary resources” (R67), “internal
control” (R22), asset control, “control against fraud and corruption” (R31), and traceability of
resources. Among the challenges are asset control, development of new forms of control, and the
realization that “improvements in control and process will always face opposition from corrupt
people and bureaucrats who gain from the power to create problems to sell solutions. If the
process is facilitated, there will be no solution to sell and no bribes to make” (R86). In addition:
“The biggest challenge is the managers/power holders who do not want to be controlled by those
who finance their activity, that is, taxpayers” (R29).
In this category, it is worth highlighting the direct relationship with the potential benefit listed
in Table 5, trust and control. Although the word confiança (trust) was not stressed in Figure 1,
this element reflects the fact that blockchain is a distributed database where information is
trustworthy, simplifying transactions by removing the intermediary parties. Nakamoto (2008)
sought to develop a technology based on cryptographic evidence to promote trust instead of the
existence of an intermediary or ‘third party trust.’ Thus, the technological characteristics of the
blockchain (such as cryptographic security and the data distribution structure) can be seen as the
trust-building mechanism for transactions, reducing the risk of fraud and increasing data security,
as data no longer needs to be provided or managed by centralized entities (Hooper & Holtbrügge,
2020).
The category change is related to the technology’s potential use. According to one of the
respondents, blockchain “has the potential to dramatically change the structures of accounting,
with numerous gains in efficiency” (R64). Many participants pointed out that the adoption of
technology goes through challenges such as “difficulty in the process of change within the public
sector” (R12), and “cultural and regulatory barriers” (R42). They understand that blockchain can
bring about significant changes in controls and responsibilities, which can block its adoption: “I
understand that the problem of adoption is much more cultural than technological. This is
because a significant part of public spending in the current model could be exposed, without
justification, or definitely attributing blame to the executor, or even hold the manager directly
responsible — due to the traceability characteristic, one of the strong characteristics of the
technology. I understand this as the main barrier to adoption — unfortunately” (R90). “Although
pilot tests are already taking place in the Brazilian public sector, I believe that the main challenge
for blockchain is acceptance by the government and employees. It requires a major change of
mindset and also investment in training and knowledge on the part of employees” (R2). As
already addressed by another respondent, blockchain is seen not just as another technological
tool but as a concept that can change processes, dynamics, and power structures in the public
sector. This explains why respondents repeatedly mentioned cultural change.
Finally, the category knowledge refers to responses revealing a lack of in-depth knowledge to
answer questions about opportunities and challenges of the use of blockchain technology in
government accounting. The majority pointed out the importance of greater dissemination,
Opportunities and challenges of using blockchain technology in government accounting in Brazil
17
study, benchmarking, and the “need to train employees to seize the opportunities [that the
technology offers]” (R71). One of the respondents considered that the “greatest challenge will be
to overcome ignorance about technology and its cost-benefit within public agencies” (R72).
Thus, the data collected from the open-ended questions suggested that respondents had
significant knowledge about the concept and usability of blockchain technology, contrary to the
low level of knowledge identified in the study by Migliorini and Rocha (2019). The characteristics
of the sample may explain this phenomenon, considering that 48.9% of the participants in this
research are highly qualified and specialized professionals, heavily exposed to information on
social media, magazines, and newspapers. In addition, this research corroborates the findings by
Giongo and Balestro (2019) who observed that there is still a lack of clarity around the concepts
and applications of blockchain technology, and the public sector fails to encourage the use of
solutions based on blockchain. In addition, the results reinforce Dai and Vasarhelyi’s (2017)
finding that professionals need to be trained to better understand and use this technology.
Finally, Table 7 presents the opportunities and challenges listed by the research participants in
relation to the seven categories of analysis. This list offers a theoretical consolidation and helps
public managers understand the opportunities and challenges of using blockchain technology in
public management.
Table 7
Consolidated of potential uses and challenges by category of analysis
Category
Potential use
Challenges
Technology
Assistance in public accounting;
control; transparency; security of
public data; facilitated transactions;
reliability; control of public assets
Legal regulation; lack of trained and knowledgeable
civil servants; cultural resistance; cost of
implementation; need to remodel processes and
systems
Government
accounting
Greater reliability and timeliness in
transactions, recording data and
information; agility in public accounting
Cultural and procedural challenge of accepting new
processes; new interfaces and procedures due to the
adoption of new technology
Security
Data security; secure transactions;
security of operations and information;
assistance in combating fraud
Blockchain technological infrastructure; definition of
network participants and how the information will be
validated
Transparency
Greater transparency of information
and public processes
Definition of the most appropriate uses and information
to be disclosed; inform about the channels where to
access information; usability issues
Control
Increased social accountability; control
of budgetary resources, fraud, and
corruption; asset control; traceability of
resources
Need for cultural change for active control;
development of new forms of control; resistance to the
implementation of new control mechanisms
Change
Substantial modification of existing
public accounting structures, gaining
efficiency; changes in control and
responsibilities
Resistance to novelties arising from changing
processes, dynamics, and structures of power in the
public sector
Knowledge
Reliability in the implementation based
on greater disclosure; study and
search for successful cases where the
technology was used
Training and qualification of civil servants in the field;
freedom to use knowledge to implement new solutions
Note. Source: Elaborated by the authors.
P. R. Prux, F. da S. Momo, C. Melati
18
FINAL CONSIDERATIONS
This study aimed to identify opportunities and challenges of using blockchain technology in
government accounting, based on the perception of experts in technology and government
accounting. The results demonstrated that professionals were aware of the concept and usability
of the technology, which may be explained by the profile of the sample obtained, formed by many
highly specialized individuals. The respondents stated they had learned about the topic through
many sources such as social media, magazines, documentaries, events, and conversations in the
workplace. Most participants considered that blockchain can be applied in financial transactions,
auditing, and asset transfers. Among the technology opportunities, the respondents mentioned
the elements of trust and control, information security, and control against fraud and corruption.
According to the sample, there are challenges to invest in blockchain within government
accounting, including the lack of information about the technology and its cost-benefit within
public agencies, the challenge to implement systems (by replacing or adapting), and the lack of
case uses demonstrating the application of the technology. Regarding the results obtained in the
quantitative and qualitative analysis, there is a perception of the opportunities and potential use
in the public sector. It is an emerging technology that can generate more transparency, reliability,
security, agility in transactions, and optimization of accounting records and processes. Among its
main challenges stand out the need for more use cases in the Brazilian public sector, legal
regulation, cultural resistance, the lack of knowledge and training for civil servants, the costs of
implementation, and the need to remodel processes and systems (Table 7).
The applicability of blockchain technology in government accounting is relevant, but it is not
considered a strategic priority. According to the respondents, blockchain use cases in their
institution may be related to digital records, auditing, and smart contracts. The study
demonstrates that professionals are interested and have expectations regarding technology,
considering the improvements it can bring to government accounting. The blockchain
technology appeared in 2008. It is still recent and needs to be better understood and more use
cases. The importance of expansion in pilot projects and cases is clear, allowing testing the
benefits and removing the uncertainties surrounding the technology.
The results presented in this study lead to suggesting partnerships between public agencies and
academia in the programs of accounting and technology in order to further examine the topic
and develop integrated projects. Also, further studies are crucial, expanding the sample to include
other Brazilian states and municipalities. Finally, future research on government accounting
should work to verify opportunities and challenges, with a special look at the areas of transactions,
auditing, public procurement, and transfer of assets, examining institutions that apply these use
cases, describing their path, gains, and losses.
In addition, future studies should look for the reasons for the lack of incentive to find blockchainbased solutions in the public sector, considering the potential benefits of the effective use of this
technology. Such investigation could contribute to understand whether technical or political
aspects influence decision-making around this issue.
Opportunities and challenges of using blockchain technology in government accounting in Brazil
19
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P. R. Prux, F. da S. Momo, C. Melati
22
Authors’ contributions
1st author: conceptualization (lead), data curation (lead), formal analysis (lead), investigation (lead), methodology
(lead), project administration (lead).
2nd author: conceptualization (equal), data curation (supporting), formal analysis (equal), investigation (supporting),
methodology (equal), project administration (supporting).
3rd author: conceptualization (supporting), data curation (supporting), formal analysis (equal), investigation
(supporting), methodology (equal), project administration (supporting).
Authors
Paula Raymundo Prux
Universidade Federal do Rio Grande do Sul, Escola de Administração
Av. João Pessoa, 52, Centro, 90040-000, Porto Alegre, Rio Grande do Sul, Brazil
paulaprux@gmail.com
https://orcid.org/0000-0003-0251-7014
Fernanda da Silva Momo
Universidade Federal do Rio Grande do Sul, Faculdade de Ciências Econômicas
Av. João Pessoa, 52, Centro, 90040-000, Porto Alegre, Rio Grande do Sul, Brazil
fernandamomo@yahoo.com.br
https://orcid.org/0000-0002-6512-5280
Claudia Melati*
Universidade Federal do Rio Grande do Sul, Escola de Administração
Av. João Pessoa, 52, Centro, 90040-000, Porto Alegre, Rio Grande do Sul, Brazil
cmelati@yahoo.com.br
https://orcid.org/0000-0002-9369-0113
* Corresponding author
Peer review is responsible for acknowledging an article's potential contribution to the frontiers of scholarly knowledge on business
or public administration. The authors are the ultimate responsible for the consistency of the theoretical references, the accurate
report of empirical data, the personal perspectives, and the use of copyrighted material.
This content was evaluated using the double-blind peer review process. The disclosure of the reviewers' information on the first
page is made only after concluding the evaluation process, and with the voluntary consent of the respective reviewers.
Opportunities and challenges of using blockchain technology in government accounting in Brazil
23
APPENDIX A — QUESTIONNAIRE
Opportunities and challenges of using blockchain technology in government accounting in Brazil
IDENTIFICATION
1. Gender:
( ) Female
( ) Male
2. Age: __________
3. Institution where you work: __________________________________________
4. Profession: ___________________________
5. Academic education:
( ) Business
( ) Accounting
( ) Legal and Social Sciences/Law
( ) Information and Communication Technology
( ) Other
6. Education level:
( ) Technician
( ) University graduate
( ) Postgraduate studies
( ) Master’s degree
( ) Doctorate degree
7. How do you describe your knowledge about blockchain technology?
( ) I’ve heard the term, but I can’t define blockchain
( ) I can define blockchain, but I am not aware of the applicability
( ) I can define blockchain, I am aware of the applicability in general, but I cannot see usability yet
( ) I can define blockchain, I can see the usability, but I don’t participate in projects in the area
( ) I can define blockchain, I am aware of the applicability, and I participate or I have already
participated in a study or application project involving the theme
8. The source of your level of knowledge about blockchain technology comes from (you can check
more than one alternative):
❏
❏
❏
❏
❏
❏
Academic articles
Courses
Media (social networks, magazines, newspapers…)
Speeches
Projects and/or work meetings
Others
If you have marked ‘others,’ please describe where you learned about blockchain technology:
______________________________________________________________________
P. R. Prux, F. da S. Momo, C. Melati
24
9. In your opinion, what potential benefits can be derived from the use of blockchain technology
in public accounting?
Not
applicable
Applies
little
Indifferent
Applies partially
Applies fully
Access to information and
transparency
()
()
()
()
()
Predictive data capacity
()
()
()
()
()
Trust and control
()
()
()
()
()
Control against fraud and
corruption
()
()
()
()
()
Efficiency
()
()
()
()
()
Governance
()
()
()
()
()
Data quality
()
()
()
()
()
Information security
()
()
()
()
()
10. For you, can blockchain be applied in the following activities related to public accounting?
Not
applicable
Applies
little
Indifferent
Applies partially
Applies fully
Audit
()
()
()
()
()
Improvement of inspection
capacity and tax collection
()
()
()
()
()
Automation of budgetary and
financial management
()
()
()
()
()
Clearing and settlement of
securities
()
()
()
()
()
Compliance
()
()
()
()
()
Settlement and reconciliation of
government accounts
()
()
()
()
()
Contracts
()
()
()
()
()
Warehouse/inventory control
()
()
()
()
()
Wealth management
()
()
()
()
()
Publications
()
()
()
()
()
Accounting records
()
()
()
()
()
Budget records
()
()
()
()
()
Opportunities and challenges of using blockchain technology in government accounting in Brazil
25
Financial transactions
()
()
()
()
()
Asset transfer
()
()
()
()
()
11. Do you think there are challenges to investing in blockchain technology within public
accounting?
( ) Yes
( ) No
12. If you answered yes to the previous question, check what are the biggest challenges to invest
in blockchain technology within public accounting, in your opinion (you can check more than one
alternative):
❏ High infrastructure costs for implementation (such as electricity costs)
❏ Lack of knowledge about technology and its cost-benefit within public agencies
❏ Missing use cases and technology applications
❏ Implementation/difficulties in replacing or adapting systems
❏ Scalability/performance concerns
❏ Security concerns
❏ Regulatory issues
❏ Reluctance to change established processes
❏ Not a priority at the moment
❏ There are no challenges
13. How do you perceive that your industry sees the applicability of blockchain for accounting
purposes?
( ) It is not and will not be relevant
( ) Relevant, but not a strategic priority
( ) Important, but not part of the Top 5 strategic priorities
( ) Critical, part of the Top 5 strategic priorities
( ) I am not sure
14. There is an intention of the institution where you work to adopt blockchain technology?
( ) Yes
( ) No
15. If so, please describe which of the following blockchain use cases your institution may adopt:
( ) Digital records
( ) Internet of things (IoT)
( ) Payments
( ) Audit
( ) Smart contracts
( ) Others
If you checked ‘others,’ describe which blockchain use cases the institution may adopt:
__________________________________________________________________________________
__________________________________________________________________________________
P. R. Prux, F. da S. Momo, C. Melati
26
16. For you, blockchain technology can bring improvements to public accounting?
( ) Yes
( ) No
17. Justify your answer:
__________________________________________________________________________________
__________________________________________________________________________________
18. Give your opinion on the POTENTIALS OF USE of blockchain technology in public
accounting:
__________________________________________________________________________________
__________________________________________________________________________________
19. Give your opinion on the CHALLENGES of blockchain technology in public accounting:
__________________________________________________________________________________
__________________________________________________________________________________