Elon Musk, the founder of SpaceX, Tesla, and also a key figure behind President Donald Trump’s administration, is reportedly engaging in discussions about the potential implementation of blockchain technology within the newly established Department of Government Efficiency (DOGE).
This initiative, part of Trump’s broader effort to enhance the digital asset industry, aims to leverage the advantages of blockchain for improving government operations.
Elon Musk Eyes Blockchain Solutions
Sources familiar with the talks, who requested anonymity due to the confidential nature of the discussions, indicated to news outlets such as 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 maximize efficiency and productivity.
The department’s name cleverly references the popular memecoin Dogecoin, a cryptocurrency that operates on its own blockchain and has garnered significant attention in recent years.
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 is not new. Individuals associated with the DOGE initiative have met with representatives from various public blockchains to assess their technological capabilities.
Concerns Under DOGE Initiative
The discussions highlight a critical aspect of Trump’s 2024 campaign, focusing on reducing wasteful spending and addressing the growing national deficit, which has been attributed to previous administration policies.
One of Musk’s allies recently pitched several blockchain applications to Trump transition officials, emphasizing the technology’s potential to enhance data security and financial transparency.
While the concept of employing blockchain for government 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, pointed out that a government using a public blockchain could face issues related to oversight, as it would 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 question whether blockchains truly offer advantages over conventional database systems.
Sam Hammond, chief economist at 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 one of the largest applications of blockchain technology attempted by any government. However, the specific blockchain technology Musk’s team might adopt remains uncertain, and there are concerns about whether these discussions will lead to actionable projects.
At the time of writing, DOGE is trading at $0.33, which is a 6% retracement on the weekly time frame.
Featured image from DALL-E, chart from TradingView.com
