The Future Of Distributed Ledger Technology In The European Union

The Future Of Distributed Ledger Technology In The European Union

November 30, 2020

The roots of distributed technology

Distributed ledger technology (DLT) is a relatively new arrival in the industrial and business landscape. DLT is an umbrella term for any type of decentralized network managed and supported by its participants, rather than being controlled centrally. Blockchain technology, for instance, is a type of DLT.

From a historical perspective, blockchain technology is in its infancy. The term itself, blockchain, was first heard of circa 2008, when the person or group behind the Satoshi Nakamoto alias published the Bitcoin paper explaining the concept of peer-to-peer digital currency. But the concept of a cryptographically linked and immutable chain of records was not new. Scientists W. Scott Stornetta and Stuart Haber designed such a system back in 1991. The pair published a joint whitepaper shortly thereafter. Stornetta and Haber are considered by many as the founding fathers of blockchain technology.

Blockchain technology has evolved since, both in technological terms and ubiquitousness, but if one were to compare even the most advanced blockchains today with Stornetta and Haber’s work, one would find that the basic concepts differ only ever so slightly.

Blockchain technology, today

Blockchain has gone through a lot. From relatively obscure and troubled beginnings, and well-publicized scandals like the infamous 2011 Mt. Gox hack, the Silk Road affair, or the MyCoin Ponzi scheme (the first, but unfortunately not the last similar scheme involving cryptocurrencies), blockchain earned somewhat of a bad reputation throughout its formative years. Blockchain was, in a manner of speaking, the problem child in the technology neighbourhood.

It is worth noting, however, that all these fraudulent activities related more closely to Bitcoin, rather than the underlying technology -blockchain-, but for many, these two things were one and the same. Throughout the mid-to-late 2000s, blockchain became a sort of byword for ‘scam.’ And that was not a good thing.

Then came the (in)famous Initial Coin Offering (ICO) era. The eighteen months (or thereabouts) that spanned between the start of 2017 and around June of 2018 stand somewhere between the gold rush in mid-1850s America and the inglorious end of the crash. If you were running a start-up around 2017, raising an ICO was almost a rite of passage. You were a nobody without one. Between Q1 and Q4, the ICO market grew almost 100%

But by December of 2018, the party was over. Most ICOs fell far short of their intended targets, or failed to raise any capital at all. Coin after virtual coin fell like soldiers on the battlefield.

Again, it’s just the currencies that did not survive. The engine that powered these coins -blockchain- remains. Governments, payment processors, even banks, once crypto’s sworn enemies, have already implemented, or are looking to adopt blockchain soon. In a recent report, Deloitte reflects, overall, a bright blockchain landscape. 

The world at large seems to start appreciating the opportunities and new business ventures offered by the adoption of blockchain technology.

The state of blockchain technology in the European Union

The current situation of blockchain technology in Europe is, in a word, challenging. The United States, for example, and despite the large number of states, is a single country governed by a single federal government. This, while it may present challenges of its own, makes the US a far more cohesive entity (from an economic and business perspective, at least) than Europe will ever be. The Old Continent, despite referring to itself as a Union, is not quite united. Europe is a conglomerate of cultures, governance systems, individualist attitudes, and more importantly, currencies, that must somehow coexist and find a way to work together to overcome these existing barriers.

Developing a common framework of collaboration for a technology that pays no attention to geographical boundaries, is therefore a priority. Blockchain technology does have that potential, the potential to create a collaborative environment where businesses, societies, governments, and other entities can work together through decentralized solutions. To this end, the EU’s executive arm, the European Commission (EC) founded the EU Blockchain Observatory and Forum, whose mission is to accelerate blockchain innovation and the development of the blockchain ecosystem within the EU and so help cement Europe’s position as a global leader in this transformative new technology, according to the agency’s website.

But of course, the very fragmentation that is inherent to the European Union poses a unique problem for the creation of these solutions. Issues of governance, data privacy and security, cross-border tariffs, and so on come into play when designing a system whose very reason to exist is to unify Europe into a single cohesive economic and societal platform.

The EU implemented the General Data Protection Regulation (GDPR) framework in May of 2018 with the specific purpose of addressing some of these issues, particularly regarding the handling of data traffic between Europe and areas outside the EU. Any blockchain solutions created for Europe’s specific business needs must comply with the governance rules specified in the GDPR framework.

Several agencies and private companies are currently researching, developing, or actively implementing blockchain solutions across Europe. Out of this pioneering group, Europechain emerges as one of the brightest beacons in the blockchain landscape around the Old Continent. Europechain is a GDPR-supporting enterprise blockchain platform managed and governed by experienced validators registered in the European Union. Its mission? To help grow, scale, and secure business technology across Europe using custom-made blockchain solutions.

Conclusion: The future of blockchain technology in the EU

If there are two words that define blockchain, those would be decentralized versatility. A distributed ledger that facilitates such crucial functions for businesses as digital payments, data security and integrity, and fast transactions. For governments, it offers sovereign identity solutions. For medical and research facilities, data immutability and the possibility to immediately share patients’ records, or field data, which might go a long way to prevent pandemics, for example. And all this wrapped in a decentralized mantle with no central governing agency.

The EU Blockchain Observatory and Forum is a step in the right direction, providing support for blockchain initiatives and creating the right conditions for the blockchain to thrive. And more specifically, private enterprises like Europechain, with its more than 40 plus combined expertise among its personnel, stand at the vanguard of the blockchain front in the Old Continent.

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