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Position paper - Getting Ready for Blockchain
uploaded16 Apr 2019
- A blockchain is a specific type of distributed ledger technology (DLT), namely a shared and replicated ledger which allows a fast and secure transaction of assets. One of the primary benefits of blockchain is that it offers a mechanism to establish trust in digital transactions. Most blockchains are an example of open source software,and as such, many facilitate collaborative, open innovation and can be re-used for multiple purposes and environments.
- Blockchain owes its name to the way it stores transaction data - in blocks that are linked together to form a chain. As the number of transactions grows, so does the blockchain. Blocks record and confirm the time and sequence of transactions, which are then logged into the blockchain within a network governed by rules agreed on by the network participants.
- Blockchain applications have the potential to bring tremendous benefits in a wide range of sectors, including: new forms of economic incentives such as cryptocurrencies, more transparent food supply chains, faster trade transactions, easier cross-border payments and managements of decentralised energy supply.
- The technology remains in its early stages and its uptake will be conditioned by the ability to address technical barriers, including interoperability, addressing potential vulnerabilities and solving equations such as scalability constraints versus benefits. The uptake of blockchain within organisations will ultimately mean a cultural change and requires building trust and legitimacy.
- Blockchain needs the right regulatory and policy environment to flourish. While legal certainty is required in certain areas, this does not necessarily require new laws but rather guidelines. A strong public-private partnership and testing will foster the uptake of the technology.