A deal with Silicon Valley start-up Swarm Fund is a big win for an Australian firm working to revolutionise the democratic process using blockchain.

Yet, despite the technology’s promise, it could be years before it’s adopted by an electronic voting industry that has struggled to build and maintain public trust.

Billed as a “scalable, reliable, and customisable decentralised governance solution”, Sydney-based SecureVote embraced blockchain to develop an online participatory democracy in which political party members could be polled – and vote on party positions – in real time from their smartphones.

This was a core principle of the Flux Party, a registered Australian political party with more than 6,800 paid members that has established itself in NSW, Queensland, WA and ACT in preparation for a Parliamentary run in the 2018/19 federal election.

Blockchain – the highly scalable, unmodifiable ledger technology that powers Bitcoin and other cryptocurrencies – builds and maintains an anonymous platform for accepting and recording data such as voting records.

Because the technology’s architecture means the contents of a blockchain cannot be modified later, CEO Nathan Spataro says, it was a clear step forward for electronic voting platforms that have struggled to assert their non-repudiability amidst the spectre of voting machine hacks such as the 90-minute compromise of a US voting machine at last year’s DEFCON event.

“Often the costs around [voting] can be very high, and trust is really low,” Spataro explains. By leveraging blockchain to build SecureVote’s proprietary Blockchain Agnostic Scalability Layer (BASL), “we discovered that we could conduct a completely decentralised, scalable election that was also anonymous. A trustful system built on blockchain is something everyone can get behind, because any user can verify the entries without having to call mediators.”

A single source of truth

SecureVote’s technology – which has been stress-tested to 1.5 billion transactions in a 24-hour period – got its first major test in late January as Swarm Fund went live with a novel distributed asset financing platform that uses the SecureVote-developed Liquid Democracy Voting Module (LDVM) to provide a scalable governance layer for its activities.

Early wins such as this reflect a longer-term vision for the distributed ledger concept, which is finding adherents despite the instability of Bitcoin and its cryptocurrency brethren – which in recent weeks have been blocked from Facebook, stolen from a Japanese exchange, and banned from China.

Blockchain has taken a less hyperbolic trajectory based on a groundswell of support from large corporates and government bodies alike. For example, Westpac last year reported that it, in partnership with ANZ Bank and shopping centre operator Scentre Group, had successfully leveraged blockchain to digitise the bank guarantee process used for commercial leasing.

The core conceit of blockchain – that it maintains an ever-larger, universally verifiable version of the truth – is well suited for trade ecosystems involving a large number of organisations, often across many countries.

The sequentially processed blockchain can eliminate concurrency issues and provide an incontrovertible record of past transactions that could not be changed without collusion between a large number of members of the trading bloc.

NAB recently joined an IBM-backed blockchain network for processing cross-border payments, while CBA trialled a blockchain-based government bond with Queensland Treasury Corporation and is ramping up to launch what it calls a “world first” issuance of a blockchain-based bond.

Corporates such as agricultural cooperative CBH Group, energy disruptor Power Ledger, and healthcare start-up ScalaMed are applying the concept to a range of industries. Government authorities are also evaluating the technology, with ASIC releasing an information sheet, the Victorian government hopping aboard, and CSIRO’s data arm Data61 exploring potential applications.

The long road to e-voting

Blockchain-based electronic voting, with its potential to create an incontrovertible and auditable record of every vote cast in an election, would seem to be a no-brainer – but even Spataro admits there is “still a lot of scepticism”.

The Australian Electoral Commission (AEC) “runs federal electoral events according to the Commonwealth Electoral Act 1918 which provides for a manual, paper-based voting system in quite prescriptive detail,” a spokesperson told Information Age. “The AEC will continue to implement a paper-based voting system until such time as Parliament changes the legislation.”

That’s unlikely before the next federal election, but electronic voting has slowly gained ground thanks to firms like ACT-based software development house F1 Solutions, whose Electronic Polling Place Management System (EPPMS) has already managed polling in the ACT and, more recently, the Northern Territory.

EPPMS doesn’t manage the votes itself, which are still recorded on paper ballots. But the system does track the rest of the process, using a software-as-a-service (SaaS) model to administer a single central voting registry that, among other things, links polling places to prevent citizens from voting more than once.

F1’s platform offers a system-wide audit log that tracks any updates, deletions, or additions that take place on the system.

Maintaining online and offline integrity "takes a little bit of doing to get all the synchronisation streamlined and rapid,” says founding director Gus Bowman. “Most elections have a common process that they go through, and at any point in time you can [audit] the activities.”

Bowman sees eventual value in the use of blockchain to streamline such checks and balances. But for now, F1’s governance logic is built into the back-end of a SaaS platform that is tailored for each new application.

Greater exploration of blockchain’s value in managing voting applications is likely to spur broader interest from other players – and, eventually, serious government consideration of the value of an unmodifiable blockchain-based national ballot.

In the shorter term, however, Spataro sees the platform’s biggest promise in facilitating smaller-scale elections such as voting at annual general meetings, board meetings, union meetings, and other scenarios where auditability of binding votes is critical.

The technology “is able to handle sophisticated governance structures and a whole range of voting types,” he explains. “We needed this to be scalable because our original intention was to underpin this mass democratic future.”

“It’s one thing to have 800 million people voting in an Indian election, for example – but if you have a vision of democracy that looks like that many people voting every week, you need a system that can handle really large volumes – and that is non-trivial.”