Elon Musk, the founding father of SpaceX, Tesla, and in addition a key figure behind President Donald Trump’s administration, is reportedly engaging in discussions in regards to the potential implementation of blockchain technology throughout the newly established Department of Government Efficiency (DOGE).
This initiative, a part of Trump’s broader effort to boost the digital asset industry, goals to leverage some great benefits of blockchain for improving government operations.
Elon Musk Eyes Blockchain Solutions
Sources aware of the talks, who requested anonymity as a result of the confidential nature of the discussions, indicated to news outlets similar to Fortune, that Musk has expressed interest in utilizing a digital ledger to streamline government costs.
The proposed applications of blockchain technology include tracking federal spending, securing sensitive data, processing payments, and even managing federal infrastructure.
The DOGE initiative, created through an executive order signed by President Donald Trump, is tasked with modernizing federal technology and software to maximise efficiency and productivity.
The department’s name cleverly references the favored memecoin Dogecoin, a cryptocurrency that operates by itself blockchain and has garnered significant attention in recent times.
President Trump has actively promoted cryptocurrency-friendly policies during his presidential campaing and first week in office, including the establishment of a working group on digital assets that involves key administration officials.
Musk’s engagement with the blockchain community will not be latest. Individuals related to the DOGE initiative have met with representatives from various public blockchains to evaluate their technological capabilities.
Concerns Under DOGE Initiative
The discussions highlight a critical aspect of Trump’s 2024 campaign, specializing in reducing wasteful spending and addressing the growing national deficit, which has been attributed to previous administration policies.
One among Musk’s allies recently pitched several blockchain applications to Trump transition officials, emphasizing the technology’s potential to boost data security and financial transparency.
While the concept of employing blockchain for presidency functions is intriguing, it poses significant challenges. Public blockchains, like those used for Bitcoin and Solana, operate on decentralized networks, raising concerns about control over data entries.
Campbell Harvey, a finance professor at Duke University, identified that a government using a public blockchain could face issues related to oversight, as it could relinquish some control over its data.
Historically, many large enterprises, including Walmart, have explored blockchain technology, primarily through private ledgers. These initiatives often struggled with governance and efficiency, leading experts to query whether blockchains truly offer benefits over conventional database systems.
Sam Hammond, chief economist on the Foundation for American Innovation, noted that while a blockchain could provide secure and transparent tracking of government spending and contracts, traditional databases might achieve similar results with fewer complications.
The DOGE initiative could represent considered one of the most important applications of blockchain technology attempted by any government. Nevertheless, the precise blockchain technology Musk’s team might adopt stays uncertain, and there are concerns about whether these discussions will result in actionable projects.
On the time of writing, DOGE is trading at $0.33, which is a 6% retracement on the weekly timeframe.
Featured image from DALL-E, chart from TradingView.com