Blockchain adoption is often linked to financial applications, but for local governments, security has emerged as the real game changer. In Davao, authorities exploring blockchain technology were first drawn to its security benefits, only to later realize it could also drastically cut costs.
Governments worldwide have been slow to embrace blockchain due to concerns about regulation and complexity. In the Philippines, skepticism remains, but recent developments in Davao show a shift in perspective.
According to Churchill Brizuela, NFT Davao’s co-founder, security, not financial incentives, was the key factor that piqued the local government’s interest.
“The main pivot for them is the security. Because, whether you like it or not, whatever security you put in, if you’re really on the web, whatever firewall you put in, if they really want it, you can really be attacked.”
Security is Still the Main Focus
The decentralized nature of blockchain ensures that data is tamper-proof and stored across multiple nodes instead of a single vulnerable database. This level of security, Brizuela said, was what convinced officials to explore how blockchain could protect government systems from cyber threats.
Governments are beginning to see blockchain as more than just a financial tool. According to IBM, blockchain enables secure data sharing between citizens and agencies, increasing trust while providing an immutable audit trail for regulatory compliance, contract management, identity verification, and citizen services.
By reducing vulnerabilities in traditional systems, blockchain is becoming an attractive solution for local agencies looking to modernize.
But what came as an even bigger surprise was the cost-effectiveness of blockchain solutions. Initially perceived as expensive and complex, the government later discovered that shifting from traditional cloud services to blockchain infrastructure could lead to significant savings.
“Their main goal is to solve their security issue. But once they saw the savings, they got even more excited.”
Savings Benefit with Blockchain
Traditional cloud-based solutions often require high licensing fees and subscription costs. With blockchain, government agencies can eliminate intermediaries and reduce operational expenses while maintaining a more secure system.
While financial benefits were not the initial motivation for adoption, they became an unexpected advantage. As officials continue to assess the potential of blockchain, projects like NFT Davao are proving that the technology is not just for finance, it is a powerful tool for securing and streamlining government operations.
“Yeah, it’s cheaper... In ICP, compared to the AWS that they procured for a year, the difference is really big.”
Internet Computer Protocol (ICP) released a report citing Gartner Research, which estimated $1.8 trillion in Legacy IT Stack expenses, which include developers, administrators, security teams, maintenance, and more. The ICP claims that with their Canister, there could be a 75% reduction in complexity, resulting in an estimated $1.35 trillion in potential savings.
With security and cost efficiency now on the table, local governments are beginning to recognize blockchain’s broader potential. As adoption grows, Davao’s experience could serve as a model for other cities looking to strengthen their digital infrastructure.
