Philip Boucher at EuroScientist: “…The way blockchains create fast, cheap and secure public records means that they also can be used for many non-financial tasks, such as casting votes in elections or proving that a document existed at a specific time. Blockchains are particularly well suited to situations where it is necessary to record ownership histories. For example, they could help keep track of how and where our diamonds are sourced and our clothes are made, or to be sure that our champagne really came from Champagne.
They could help us to finally resolve the problem of music and video piracy while enabling second-hand markets for digital media; just like we have for books and vinyl. They also present opportunities in all kinds of public services, such as health and welfare payments. At the frontier of blockchain development, self-executing contracts are paving the way for companies that run themselves without human intervention.
The opportunities are many, but there are also some challenges to consider. For example, blockchain’s transparency is fine for matters of public record such as land registries, but what about bank balances and other sensitive data? It is possible (albeit only sometimes and with substantial effort), to identify the individuals associated with transactions, which could compromise their privacy and anonymity. While some blockchains do offer full anonymity, some sensitive information simply should not be distributed in this way.
Technologies have social values
We often talk about blockchain’s economic and functional potential. These are important, but its most profound legacy may be in subtle changes to broad social values and political structures. Just because technologies can be used for both ‘good’ actions and ‘bad’ actions does not mean that they are neutral.
To the contrary, all technologies have values and politics, and they usually reinforce the interests of those that control them. Each time we use a centralised ledger – like a bank or government database – we confirm their owners’ legitimacy and strengthen their position.
Perhaps each time we use a decentralised blockchain ledger instead, we will participate in the gradual relegation of traditional financial and governance institutions and the prioritisation of transparency over anonymity. But this would only happen if we develop and use blockchains that have these values at their core….
We cannot know exactly where and how blockchain will change our lives. They have the potential to help us develop more transparent and distributed social and economic structures. However, we have to look closely to see whether this is really what we are getting.
The sharing economy also promised to connect individuals more directly, ousting middlemen and unburdening people from the intervention of states, banks and other traditional institutions. It also had a similar rhetoric of transition, disruption and even revolution. However, the most successful initiatives of this movement are, at heart, very effective middlemen. Even with ubiquitous blockchain development, we might not achieve the levels of transparency and distribution that we expected.
For example, as an alternative to the most open and transparent blockchain applications such as Bitcoin, so-called permissioned blockchains allow their creators to maintain some centralised control. These blockchains offer a more moderate form of decentralisation and are favoured by many governments and businesses.
Blockchains and regulation
For now, there is little appetite for intervention in blockchain development at a European level. Indeed, a recent European Parliament report on virtual currencies, published in May 2016, acknowledged the increased risks, which will require enhanced regulatory oversight and adequate technical expertise to handle such currencies. However, the report also calls for a proportionate EU regulatory approach to avoid hampering innovation in the field at such an early stage. This means that, for now, we will continue to analyse developments and promote dialogue amongst policymakers, businesses and citizens….(More)”