UK government gets into DLT
Wednesday 03 February 2016
The UK government just published a major report into ‘distributed ledger technology’ (DLT), or what we know and love as blockchain - and I’m surprised to say I’m impressed.
As a global financial hub, it’s encouraging that the UK is carving out a reputation as a crypto-friendly country. The government has repeatedly stated that it will take a light-touch approach to regulation, intending not to stifle innovation. As I’ve written numerous times before, the banks in this country take a very different view; they have done their utmost to hamstring just about every exchange business ever started here. But it now looks like the technology itself will get a major boost as the country positions itself to be a leader in the space of blockchain research and application.
In mid-January, the Government Office for Science published an 88-page review into distributed ledger (blockchain) technology, covering a range of different aspects and implications including the technology; governance and regulation; security and privacy; its disruptive potential; applications in government; and global perspectives.
The report is accompanied by a rather understated 5-minute video that details some of the possible applications of blockchain tech, as well as an overview of how it works. It’s worth a watch, for a couple of reasons. One is that it’s not your average sales pitch. It’s realistic about the potential of DLT but doesn’t promise the earth, and they haven’t resorted to flashy tricks (this is Britain, after all). But the other is that they’ve really thought about some of the use cases. One of the government’s key roles is delivering public services and facilitating others to do what they do best (a brief lesson on political theory is assumed there), and that’s something they’ve taken seriously.
What’s really encouraging is that the researchers have not confined themselves to the financial applications of DLT (we might as well get used to calling it that, because we’re going to be hearing a lot more of it; blockchain is, after all, only the first iteration of distributed ledger tech). That’s discussed, naturally; bitcoin itself even gets a mention as the first incarnation of this new and promising technology - and not so much as a mention of drugs and tax evasion. But it’s clear that the UK government is looking to use DLT in a whole range of different applications. It’s not often I can say I’m proud of my country, but I like what’s going on here.
The showcase applications are not simply how easy this would make it to revolutionise the financial system and change the way we create and curate money. Instead, it opens on the existing application of tracing diamonds and providing transparency in the production process and supply chain. A similar method could be used to track the provenance of a piece of salmon (though not by inscribing a serial number onto the fish, presumably). There are applications for small scale farmers communicating their availability of produce for large-scale customers, and so on. Then there are use cases within government for public service provision, and in terms of establishing property and ownership of assets like houses.
All in all, it’s a very promising piece of work, and it opens up a lot of possibilities. I’ll be taking a closer look at some of the content and its implications in due course.
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