Iztok Petek, Chairman of the Board, LSBC), Natasa Zajec (Executive Director, LSBC) and Ivo Grlica (LL.M., Vienna, blockchain lawyer and LSBC advisor) tells us more about the latest Blockchain trends and discuss their collaboration with Infrachain.
When and why did you join the Infrachain initiative?
LSBC has joined the Infrachain initiative at its very establishment in December 2017. Just a few months before LSBC organized the first event in Slovenia which confronted different points of view on Blockchain by putting developers/enthusiasts, existing business models, legal experts, and financial authorities at the same table. Among the speakers were also Marco Houwen and Patrick Houtsch from Infrachain. Infrachain got a lot of traction and LSBC was acting as an intermediate organization between the Initiative and Slovenian companies so it has been natural for us become a member. Furthermore, we saw the opportunity to promote Infrachain and BC Technology as a good practice, to Initiate consortia for Blockchain related projects and mediate between various stakeholders. Our aim, as an international organization, is to help with coordination of the activities of Infrachain including acquiring new members in Slovenia as well as other countries in the region.
What are the challenges you are currently facing when it comes to the development of concrete Blockchain applications?
In the field of blockchain, businesses are first and foremost facing an outdated regulation that never foresaw these new technologies and is therefore simply impossible to apply to such new innovative business models. To give a very concrete example, GDPR (General Data Protection Regulation) is “a child” of a golden age of big centralized databases; thus some measures required by it, such as a right to erasure, are simply impossible to be fully implemented in the context of immutable blockchain business operations. We are facing similar challenges in the tax field, legislation relating to securities, consumer protection, anti-money laundering laws and other legal areas. Such legal uncertainty is, in my opinion, one of the biggest obstacles hampering the development of nascent blockchain industry.
Challenges are also to be seen in the field of creating practical – real-life – applications and use cases of blockchain technology. Some blockchain-based solutions sound good in theory, however, they still seem to be struggling to find their right market. Seeking more connection instead of competition and partnering up with traditional financial and other businesses (with large customer bases and also recognizable products) would probably be a step in the right direction.
Public sector, for its end, also seems to be very reluctant to embrace these new opportunities in the field of big public registries (such as land registry, companies registry or various tax-related databases) – although these are marred by severe inefficiencies (especially, slow speed of changes in such registries which tend to largely fall behind business life) which blockchain could help resolve.
What about their main advantages and opportunities?
Advantages of the blockchain technology have been clear and obvious for quite some time now: we are talking about a radically novel way of management or, if you will, the democratization of large public databases. Transactions can be confirmed 24/7 in a decentralized manner that increases efficiency and eliminates the need for middlemen or third-party authorities (such as a bank or a government). On the other hand, some technological hurdles are still to be overcome, in particular in the field of scalability in security. We are confident the technological progress and R&D activities in this field will help resolve these issues sooner or later. However, as noted before, the regulatory environment conducive to such development and exploration will be a key factor here.
According to you, where will Blockchain be the most efficient? How and why?
Much has been written about business implementations of blockchain use cases in various industries – from finance (most traditional, with bitcoin and cryptocurrencies strictu sensu) to fields such as logistics, energy, tourism, and entertainment. However, one often neglected field is the use of blockchain technology in the governmental sector. If blockchain-based solutions could be implemented in real estate, companies, and other public registries, this certainly would mean a great breakthrough. Imagine what new possibilities efficient, transparent and above all 24/7 transactions being evidenced in such public registries in near real-time could bring for the whole economy! And we are not even mentioning possible solutions in the field of blockchain-based voting or dispute resolution mechanisms that have the potential to revolutionize the whole system of public governance and direct democracy.
What is needed to really kickoff the adoption of Blockchain?
Personally, I am a firm believer in evolutionary, not revolutionary approach. In my view, technological development cannot be stopped and will – sooner or later – overcome current issues in scalability, security, and other technical aspects. With that, more and more practical and concrete business applications will also arise. The real question, however, is, whether Europe will recognize the importance of proper regulatory framework to foster and facilitate such development, or we will try to impede these processes, being ultimately left behind by other parts of the world, notably China and U.S.
Published on February 26th, 2020 on https://www.itone.lu/actualites/lsbc-experts-discuss-main-advantages-blockchain-technology