Top Secret? Microsoft Opens Door to Government Blockchain Use

The U.S. government’s most sensitive data could soon be secured on a blockchain.

Revealed today at Microsoft’s Government Cloud Forum 2017 in Washington D.C., the tech giant is launching Azure Government Secret – a service designed to provide government agencies better access to cloud computing. In doing so, however, Microsoft is notably opening the door to its blockchain offering – along with the new service, it is also allowing its existing Government Cloud clients access to the Microsoft Azure blockchain-as-a-service suite.

Launched in 2015 as a way for private firms to experiment with blockchain tools, Microsoft Azure’s offering now hosts technology offerings from partner providers including Chain, ConsenSys and Emercoin in a sandbox environment. But while private sector users of Microsoft’s cloud services have been able to build with those tools for years, the stringent security requirements of the U.S. government have previously prevented these agencies from utilizing such products.

Specifically, six of Microsoft’s data centers have now been “isolated” and given provisional “Level 5” Department of Defense authorization. Further, a number of certifications have been accommodated, including for the Federal Risk and Authorization Management Program (FedRAMP) and the Defense Information Systems Agency (DISA).

According to Microsoft Azure’s chief technical officer Mark Russinovich: “The U.S. government requires those data facilities to be operated by U.S. citizens with special clearance, and so the contractor we use meets that.”

Because of all this, Azure Government Secret will offer advanced analytics and more advanced “detection” abilities to clients who use “secret classified data,” according to a statement.

With all this, Russinovich heralded the project as a new way for governments to take advantage of blockchain’s efficiencies and for taxpayers to hold their governments accountable.

In conversation with CoinDesk, Russinovich said:

“Blockchain makes it much harder for fraud and waste to exist, makes it much more visible if it does exist and potentially gets rid of a lot of layers of bureaucracy that are designed simply to ensure that waste and fraud [don’t] exist.”

Waste reduction

There’s no doubt that waste reduction is needed in the workings of the U.S. government.

Last year, the U.S. Government Accountability Office published a report on “Fragmentation, Overlap, and Duplication,” citing 544 instances of waste totaling billions of dollars in the executive branch and Congress alone.

And it seems some agencies are interested in finding a solution. For instance, just last week the U.S. State Department (which is a Microsoft customer) cited blockchain as a possible way to reduce inefficiencies.

While government waste can be as diverse as unspent resources or multiple taxpayer-funded projects tackling the same issues, Russinovich gave an especially pertinent example with several areas of the U.S. recently ravaged by hurricanes.

“When Congress approves a large package for disaster relief, which is obviously top of mind for a lot of people these days, there’s a lot of organizations that are processing funds, purchasing relief goods and transporting them,” Russinovich said, explaining:

“And there’s potential for fraud and waste there that blockchain’s transparency and reconciliation process will eliminate.”

More to come

While the Government Secret platform announced today is so far limited only to U.S. government agencies, Microsoft’s Government Cloud clients include 7,000 agencies and 10 million employees all around the world.

Russinovich was unable to confirm whether or not any U.S. government agencies were already using the new services, but officials from Health and Human Services and the U.S. Veteran’s Affairs Department will be speaking on stage at the event about the project.

And with other U.S. government clients including branches of the Federal government, the Department of Defense and the U.S. Army, Navy, Air Force and Marines, Russinovich expects a number of new government blockchain applications to be forthcoming.

Russinovich said:

“In our work with government agencies, we’ve seen a huge interest in blockchain.”

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Chain.

Brown envelope image via Wikimedia

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