Whilst crypto currencies like Bitcoin and Ethereum continue to accelerate in value, debates about the true value of these currencies and the blockchain technology on which they’re based have continued to rage. At the Blockchain Summit last week in London companies and entrepreneurs speculated about a world where everything - from you driverless car to your AI assistant - will eventually be “blockchainised”. The reasons given ranged from efficiency saving to, as a consultant NHS anaesthesiologist put it: “the fact that no one trusts governments or authorities any more.” Ironically, though, what is holding back the development of blockchain technology is the fact that at the moment people do trust centralised authorities more than decentralised technologies.
One only has to look at images of the Bitcoin mines where precious coins are stored to think that regulation may be a good thing - if only to stop the devastating environmental effects that use of the Bitcoin and Ethereum blockchains cause. In addition to this, speculation about the regulatory compatibility of cryptocurrencies also creates a huge amount of uncertainty. When a blockchain is meant to create the most trusted conditions for transactions to execute it’s slightly off-putting that governments will not officially endorse the technology.
And yet blockchain and particularly smart contracts do have the opportunity to revolutionise the way that transactions about the future are perceived and executed. What all blockchains that you might hear about currently lack is trust. If I don’t know that Ethereum is going to be around in five years because it will be replaced by its sexy successor NEO, it’s unlike I’m going to feel comfortable purchasing a twenty year bond based on Ethereum. The only institution in the world that has the authority needed to back an open & public blockchain are governments themselves.
The Chinese government has countless think tanks looking into the benefits of Blockchain, as well as a consortium of companies like Tencent and Alibaba that will ultimately come together to create a state sponsored blockchain. Like GPS - a technology developed by the US military and given (currently) free to the world - a state sponsored blockchain will be the trusted, open and public source of truth in the future, the only question is: which country will get there first. One thing is for sure, it’s extremely unlikely the country will be Britain. Whilst Estonia has already experimented with minting its own crypto currency and launching a blockchain, the UK government didn’t even send anyone to the London based Blockchain Summit.
When the implications for blockchain technology are fundamentally political and social it is desperately sad that the authority that should be taking an interest in regulating and adopting this technology is not just silent but deeply ignorant about its capabilities. Whilst China plows ahead with brave blockchain regulation and large scale investment the British government - at a time when we need innovation most - remains firmly rooted in the past.