To fully realize the potential of both blockchain and crypto-assets, a significant conversation needs to be held about the way commonsense policies may ease a pro-growth environment.
Whenever a new technology or new technology paradigm enters the marketplace, there will be an expectation for some kind of regulation, or framework, to help facilitate the integration of this technology. That can be as true for blockchain since it is for anything else.
It’s also important to be aware that the blockchain and crypto assets dialog is not centered or located in any single geographical site. Meaning any blockchain or crypto-asset framework will have to be able to be applied across jurisdictional lines to optimize effectiveness.
A blockchain or crypto-asset plan will, by definition, have to be comprehensive in nature, and that usually means that it will also involve input from several stakeholder groups. While this may make the initial creation and execution of a thorough blockchain policy harder, it will lead to a superior product.
Also read: Blockchain Beyond Banking
While every country differs, let us take a peek at some of the attributes and traits which ought to be a part of almost any blockchain and crypto-asset policy.
Smart contracts are essential
A bit of this blockchain and crypto-asset conversation which can be overshadowed is just how important smart contacts are for wider implementation. Blockchains, in and of themselves, are just a record of transactions that have already happened, and to communicate with different systems that a connective application – like smart contracts – are required.
another item that should be a part of any blockchain coverage is how smart contracts must be enforced. Although, in theory, a wise contract is simply a blockchain-based representation of existing contracts, the Implementing of such applications can raise further issues linked to cybersecurity, interoperability, and maintenance.
Blockchains and crypto-assets ought to be differentiated
Much has been written about crypto asset development, but for blockchain and crypto-asset coverage to facilitate pro-growth surroundings, there has to be a differentiation between the collection of options that exist. Not every blockchain is going to be utilized for the same purpose, and establishing policies that are flexible enough to accommodate this reality should form the foundation for any wide-ranging policy.
For example, and something is starting to be discussed and examined from a regulatory standpoint is whether or not — based on the performance of the crypto asset — those distinct items should be classified and handled otherwise. This can take the kind of distinct reporting and disclosure requirements, or it can be as basic as which people and associations consider even utilizing the different types of crypto assets.
Data governance ought to be a priority
With any federal level blockchain policy, there is going to be a wide selection of stakeholders involved with the development, execution, and maintenance of the blockchain. Additionally, and depending on how quickly or widely blockchains are integrated into the market at large, the sheer amount of data stored and managed on these blockchains can potentially be enormous.
The tamper-resistant character of blockchain records is simultaneously one of the most significant advantages of the technology, but can also create a scenario where information privacy and security could be called in to question. Particularly for projects operating in jurisdictions with diverse consumer data protection regulations, making sure that rules regulating the access to, and also the safety of that information are clear, must be a priority.
Competition ought to be encouraged
It’d be naïve to think that blockchain technology will develop and mature in a vacuum, and it is equally as foolhardy to try and restrict or mandate how space will grow. Just like it’s clear that other technology such as increased automation and the Internet of Things (IoT) will develop alongside blockchain technology, there are bound to be different models and variations of blockchain policy.
Much like any other industry, competition and competitive forces will cause the growth of the blockchain frame most attuned to the needs of this marketplace, and that’s something that should always be supported.
The collaboration will be integral
Even though the initial allure of a federal blockchain policy might be something similar to the industrial policies of the 1970s and 1980s, the reality on the floor is that cooperation and cooperation will be necessary for blockchains to deliver on their promise. Taking a step backward, the true advantage of blockchain — be it implemented in an organization or a national level – are the efficiencies that can be created between the individuals and associations who are members of the identical network.
To put it differently, even as rival blockchain models develop, organizations may find themselves cooperating on a growing basis.
Any time a paradigm-shifting technology comes onto the scene there is a scramble involving the private sector and governmental business to assume a leadership role. Blockchain is no exception for this principle and will require a coordinated attempt to not only possess the promised benefits to materialize but to do so in a transparent and fairway.