House of Lords Recommends Exploration of Blockchain Technology to the British Government

Great Britain’s upper chamber of parliament has recommended the exploration of the possible various applications of Blockchain.

Great Britain’s upper chamber of parliament, the House of Lords, has recommended the exploration of the possible various applications of Blockchain or distributed ledger technology (DLT) across government services.

The House added that the government should study the possibility of using the technology in such sectors as national security and public safety, healthcare, cybersecurity and customs and immigration.

In its report, the Upper Chamber stressed that there are a lot of opportunities for DLT across government services. It also claimed that the adoption of Blockchain in the public sector could change the relationship between the government and its citizens through the technology’s decentralized trust mechanisms.

In his foreword to their report, lead author Lord Christopher Holmes claimed that the DLT can play a key role in improving government services and solidifying the country’s competitive position as a global leader in technology-based innovations.

Other highlights of the report

Aside from the possible benefits of the technology, the report cited the risks associated with its adoption because it is still new and “immature.” It presented as examples the risks related to the conduct of initial coin offerings (ICO), as well as the “unresolved issues” that could endanger the systems that will use it.

The house also claimed that “greater leadership” from the government is required to improve decision-making and the delivery of public services. It recommended that serious political will should be adopted to pursue initiatives in researching, developing standards, conducting tests, and enhancing cross-departmental collaboration with respect to DLT.

Previous parliamentary works on the technology

The British parliament has already worked on the technology in the past. In mid-2016, a House of Lords committee hosted a hearing on DLT and its possible effect(s) on finance and government.

Despite its acknowledgment of the potential of the technology, the committee adopted a somewhat critical tone on the technology then.

Source: Coin Telegraph




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Bitcoin is an Economic Miracle: Cambridge Professor

Dr. Garrick Hileman, an economic historian at the University of Cambridge and the London School of Economics, explained Bitcoin is nothing short of an economic miracle.

Dr. Garrick Hileman, an economic historian at the University of Cambridge and the London School of Economics, explained in an interview with CNN that Bitcoin is nothing short of an economic miracle.

Hileman stated:

"Many economists dismissed it as a flawed form of money, something that could never achieve the level of adoption that it has. Today we estimate 5 to 10 million unique active users of cryptocurrencies, and in my opinion that's nothing short of a minor economic miracle."

What Bitcoin represents

Bitcoin is the world’s first form of decentralized money; a store of value that is censorship-resistant and that is immutable against manipulation by central entities, authorities and governments.

The decentralized structure and peer-to-peer protocol of Bitcoin are unique in that they allow the Bitcoin network to operate as its own economy, without intermediaries and third party service providers. While some central banks and financial institutions have begun to fear such aspects of Bitcoin, the Bank of Finland encouraged economists to study the “marvelous structure” of Bitcoin.

In a paper entitled “Monopoly without a monopolist: An economic analysis of the Bitcoin payment system,” Bank of Finland researchers wrote:

“Bitcoin is not regulated. It cannot be regulated. There is no need to regulate it because as a system it is committed to the protocol as is and the transaction fees it charges the users are determined by the users independently of the miners’ efforts. Bitcoin’s design as an economic system is revolutionary and therefore would merit an economist’s attention and scrutiny even if it had not been functional. Its apparent functionality and usefulness should further encourage economists to study this marvelous structure.”

Global impact

As mentioned above, Hileman described Bitcoin as an economic miracle, but a “minor” one. However, at this stage in which the market valuation of Bitcoin has surpassed that of major banks at $166 bln and the liquidity of Bitcoin is higher than that of most stock markets, it is difficult to justify any aspect of Bitcoin as “minor.”

Bitcoin has had a major impact on the global financial system over the past eleven months, and it will continue to transform the finance industry at a rapid pace. Already, institutional investors have begun to move into the Bitcoin market. Coinbase CEO Brian Armstrong revealed that approximately $10 bln in institutional money are awaiting to be invested in digital currencies such as Bitcoin.

“Over 100 hedge funds have been created in the past year exclusively to trade digital currency. An even greater number of traditional institutional investors are starting to look at trading digital assets (including family offices, sovereign wealth funds, traditional hedge funds, and more). By some estimates there is $10 bln of institutional money waiting on the sidelines to invest in digital currency today,” wrote Armstrong.

Economic miracle

Naturally, as major hedge funds and large-scale investment banks shift towards Bitcoin, general consumers and casual investors will follow. Then, Bitcoin will no longer be a minor economic miracle but a major one, which will inevitably shape the finance sector in the long-term.

Leading economies like the US, Japan and South Korea have already recognized Bitcoin as a legal currency and store of value, providing regulations to cryptocurrency exchanges, businesses and investors.  

As a currency, Hileman also noted that Bitcoin is increasingly being used in the luxury markets, to process or settle large transactions without the expensive and inefficient services of banks.

"If you're only paying a $2 transaction fee on a piece of art that's worth tens of thousands, the fee is basically zero. But if you're paying two or three percent on a piece of art of that value, then the numbers can go up quite a bit,” added Hileman.

Source: Coin Telegraph




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