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[Editor's Note] At present, calls for blockchain are surging, but no one can explain clearly what blockchain supervision is and what content is included. Last week, a meeting in the European Parliament proposed a completely different approach to blockchain regulation, pointing out first to figure out what this technology can bring?
This article was first published in Pencil, author Noelle Acheson, compiled by Clover; edited by Yiou, for reference by industry insiders.
Speaking of "blockchain supervision", what does this mean?
This is what the government, current officials and startups say we need, but no one seems to know clearly what this includes. For example, the Russian government announced last week that it would implement blockchain regulation by 2019, but the details are difficult to clarify.
However, such a broad commitment reveals a lack of understanding of what blockchain technology can provide. While these reports may not contain all information, ensuring that such evolving technology is regulated over any time period is an vague commitment that cannot be fulfilled.
A meeting of the European Parliament this week emphasized a completely different approach: the focus is on discovery. The idea seems to be to first figure out what this technology can do, help it develop, and then work hard to find out how to protect consumers, rather than having to stop continuing to develop the technology from the beginning.
However, even this method has disadvantages. First, regulators must determine what they want to supervise. Low-level code? Or is it an application of technology?
regulatory software is like regulating a car. If you don't use it, there is no danger. But once someone drives, the situation changes. The existence of rules is to regulate such conscious behavior.
In addition, automotive design requires certain safety precautions. The driver needs to know that the brakes will work and that the engine will not explode when it starts. Admittedly, hardware is different from software, but some prerequisites to ensure security are still necessary.
and there is a view that this can be decided by the market. Just as automakers that do not take extra measures to ensure design integrity tend to go bankrupt quickly, market exclusion will also cause shoddy blockchain technology to be eliminated by the times.
However, waiting for a “market decision” can have systemic consequences when using a distributed ledger to transfer value (funds, securities, ownership, etc.). Therefore, it is necessary to regulate its safety measures based on the use of underlying technologies.
Definition Usage
The problem is that we are not clear yet where this technology will be used.
The hundreds of pilot projects and proof of concepts currently underway are just the tip of the iceberg of potential applications of this technology.
Secondly, (for a technology) this unusual phenomenon of public-private network separation also requires two different methods. Although relevant laws can be drafted on the development of private blockchains, given the nature of international free access by distributed network , supervision based on the purpose of public networks is obviously ineffective. Who will supervise?
No one knows the true identity of the founder of Bitcoin, let alone the specific location of his (or her) legal location, so it is impossible to even apply the jurisdictional law of his place of residence.
However, major public blockchains have been rigorously tested in the market and at least so far their strong adaptability has been proven.
So now, the focus can be shifted to applications built on top of public blockchains. And even so, the scope of regulatory access is limited, as anyone can publish an application anywhere without a certain jurisdiction.
In this case, regulators have no choice but to let the market make decisions.
is approved by
This can highlight the ever-changing role of legislators: as a shot of a heart.
applications and use cases are regulated to mean a certain degree of security, which is more preferred by the market. Even if more opportunities for innovation may emerge in unregulated areas, competitors will soon emerge by gaining approval.
The EU seems to be developing along this route. Its innovation-first concept starts from two perspectives and ultimately supports development: 1) encourages the exploration of use cases to test impact and law, and 2) convinces entrepreneurs that their "approved" applications will be more trusted by the target market.
, a method combined with the EU as the regulatory scope of economic group regulator in 28 countries, will not only promote the formation of an ecosystem like thinkers and doers, but may also be as companies choose the European continent as their registered place and talents continue to flock to this region, which will ultimately make Europe the main destination for blockchain development.
hopes that economic growth will inspire other regions to take similar measures. Abandoning defensive regulation that tends to be more insecure methods may change how businesses and citizens think of government.
As European Parliament member Eva Kaili said at the event of the European Parliament this week:
"Maybe in this way, we can regain trust."
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