Last month I attended a debate in the Houses of Parliament. You may ask, “Lucinda, why on earth would you want to go to that place of misery during this time of political lunacy?”. Well, in an attempt to escape the total farce of Brexit, I decided to step directly into its home and attend a 90-minute committee room discussion, not on the legalities of the Withdrawal Bill, but on cryptocurrency and blockchain.
At first, I was surprised that a discussion on cryptocurrency and blockchain would only take an hour and a half considering that, although blockchain technology powers cryptocurrency, the terms are not synonymous. Alas, I was still intrigued and wanted to learn more about the technology that is set to ‘change the world.’
A mission to educate
While listening to a panel of leading figures in the industry I couldn’t help but notice that really, no one could confirm or deny anything they said. It’s clear that blockchain has the potential to dramatically change industries and I don’t deny the potential impact that blockchain technology has is huge, but it is still nascent, and industries are struggling to understand the technology.
Think about it: the first application of blockchain technology is digital currency in the form of Bitcoin. But governments and industries alike are still failing to regulate it and are struggling to move fast enough to catch up with the speed of development. Bearing in mind that Bitcoin was launched ten years ago, it’s clear that education needs to be a priority if we want to use this technology any time soon.
Last month, however, the EU made a step in the right direction — it launched the International Association of Trusted Blockchain Applications (INATBA). The 100-plus member list includes the likes of IBM and Accenture and has the aim of “supporting interoperability, developing specifications, promoting standards and regulatory convergence to support the development and exploitation of innovative blockchain technologies.” Overall, the INATBA’s goal is to create an amalgamated framework for the development and implementation of blockchain technology. This is wholly a positive step towards regulation and will provide greater clarity for organisations in the blockchain industry.
It’s not all fairy dust and rainbows
The overriding feeling I get from reading or listening to anything on the topic of blockchain is that it’s this magical fairy dust, and that if you sprinkle it all over a problem, it will supernaturally fix it — economic crises, climate change and even poverty have all been challenges that blockchain can supposedly overcome. Recently, blockchain technology has even been cited as a solution to Brexit. (N.B., I realise I said previously that I wanted to escape from Brexit, but clearly, it is inescapable).
Unfortunately, for most of these challenges, you need to cross borders and even continents in order to implement solutions that could tackle these issues. In a recent article on blockchain and Brexit, Pindar Wong wrote that ‘cryptographic certainty’ (i.e. blockchain can be borderless) could help alleviate the issues surrounding Brexit. But what Wong fails to do is consider that an unapproved technology that barely has any regulation would be impossible to implement. On the topic of the Irish border issue, Matthew Hughes wrote recently, “This, simply, isn’t something that blockchain can fix. The problem isn’t the technology or the implementation, but the fact that the fundamentals of the problem are simply too complicated. The issue isn’t technology, but a bubbling cauldron of society, history, heritage, and geography.” It is clear that we cannot apply blockchain to every problem that we face — social, economic or political problems, like Brexit, often cannot be solved purely with the flick of a technological wand.
A light at the end of the tunnel
Blockchain is a digital ledger with, essentially, built-in security that records transactions indelibly. It allows businesses to develop smart contracts without a central authority and helps with business efficiency. In an age where uncertainty and the need for transparency rule, blockchain can provide that sense of certainty and security. But adapting it to fit in with tomorrow’s ecosystems requires a lot of thought and consideration, something which we have struggled with.
Although blockchain is painted to be the technological equivalent of the Avengers, it’s more like Spiderman — an important piece of the puzzle and useful by itself, but far stronger when it has the right support and is part of a wider team. Blockchain technology needs more thorough, well-developed regulations, and both industries and government bodies need more education on the benefits of this technology. Many people associate blockchain with cryptocurrency, which in turn represents market volatility and risk. Businesses are reluctant to implement applications of blockchain due to the unstable regulatory environment which results in an overall lack of trust.
Blockchain technology promises a lot but delivers very little at this stage in its evolution. There is real potential for this technology to revolutionise industries, but until our understanding gets better, blockchain won’t be able to solve any problems at all.