EU Parliament Report Recognizes the Bitcoin Blockchain’s ‘Dominance’

The European Parliament published an “in-depth analysis” on Tuesday on blockchain technology, focusing on “how Bitcoin’s dominance of the blockchain field could affect wider development of the technology and other applications of distributed ledgers”, its authors wrote. The 28-page report entitled ‘How blockchain technology could change our lives’ was put together by the European Parliamentary Research Service (EPRS).

Also read: Europe Committed to Tightening Digital Currency Rules by End of 2017 

Blockchains: Bitcoin’s vs Government’s

The purpose of the report is to assist the Members and staff of the Parliament “in their parliamentary work”. However, opinions expressed in it are of the authors alone. Two out of three authors, Philip Boucher and Mihalis Kritikos, are from the European Parliament’s Scientific Foresight Unit. The third, Susana Nascimento, is from the European Commission’s Foresight, Behavioural Insights and Design for Policy Unit.

The paper covers both the public and private sector’s use of blockchain technology and highlights the differences between the two. It explains that bitcoin and other cryptocurrencies “could spearhead a process of decentralisation whereby the institutions that traditionally govern finances – including governments and banks – become less powerful”.

However, the authors also noted that “these same governments and banks are currently driving blockchain research and development in directions that suit their own purposes. These blockchains may prove less decentralised and transparent than others”. Citing use cases beyond the financial system, the report suggests that:

Bitcoin et al provide a wide user base, fertile spaces for experimentation and ‘fuel’ to propel new ideas forward. Even if Bitcoin does not revolutionise the financial system, it might well pave the way for other implementations that could offer serious benefits for supply chains and government services, for example.

Proof of Existence is no Patent Protection

The report went on to discuss blockchain proof of existence, citing that these low-cost services can make the current patent systems more efficient.

However, the authors warn: “It must be made clear that proof of existence via a blockchain (or, indeed, any other means) cannot be interpreted as equivalent to patent protection”.

They also explain that “For proof of existence provided by third parties, such as those that make use of the existing Bitcoin blockchain, to be accepted as a legitimate means for keeping records, they would have to be recognised as such by the appropriate enforcement bodies”.

Piggybacking Bitcoin Preferred

While claiming how transactions in Europe are usually already fast, cheap and secure, the report authors say users of blockchain applications see additional benefits in its transparency and immutability. They noted:

Indeed, since other applications can ‘piggyback’ the Bitcoin blockchain, the biggest impacts of Bitcoin may be found outside the currency domain. Transactions of any kind are usually faster and cheaper for the user when completed via a blockchain, and they also benefit from the protocol’s security.

Blockchain-enabled e-voting (BEV) is an example of a blockchain application in the report. BEV would allow voters to log and verify records that are transparent and distributed among users. The authors suggest that a cheap and easy way to develop BEV is to “’piggyback’ a more established blockchain, such as Bitcoin”.

The report also describes a greater social awareness of the blockchain’s usefulness, which it says coincides with a loss of trust in governments and the banking system. It states: “Indeed, there is a growing trend towards less trust in financial and governance institutions and greater social expectations of accountability and responsibility. The popularity of blockchain technology may also reflect an emerging social trend to prioritise transparency over anonymity”.

What do you think of this EU Parliament report? Let us know in the comments section below.

Images courtesy of Shutterstock and European Parliament

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