Blockchain, the emerging technology that underpins cryptocurrency, is poised to take off in 2018, Don Tapscott, best-selling technology author and Blockchain Research Institute co-founder told Bloomberg Law.
“It’s very clear that 2018 will be a year of massive implementation of these technologies in the private sector and in government,” Tapscott said in a recent episode of Bloomberg Law’s Code & Conduit Podcast.
Blockchain – which creates transparent, auditable shared databases where parties must agree to each transaction made – can be applied to government operations to streamline interactions among agencies, businesses and citizens, said Tapscott, whose new institute is exploring the business and societal impact of the technology with the support of members, including companies like Microsoft Corp. and governments, such as Canada.
A regulatory crackdown could stifle the technology’s ability to help startups raise capital, he said.
Tapscott’s advocacy of blockchain comes amid heated debates on Wall Street and Main Street about cryptocurrency’s valuation and volatility, as well as its viability in international commerce. Tapscott said the underpinning technology is quickly being implemented into other uses besides currency, such as record keeping, as governments and businesses recognize its potential to make many types of transactions more efficient.
Tapscott urged global regulators to refrain from banning blockchain technologies used in creating tokens or cryptocurrencies that startups or companies sell to raise capital, a practice known as initial coin offerings, or ICOs. China cracked down on the practice this fall by banning ICOs.
“For now, they’re shooting themselves in the foot, because ICOs are a powerful new way of raising capital for early stage companies and helping to build an innovation economy,” Tapscott said. “So governments can mess this up, for sure.”
Government leaders should instead seek to harness blockchain to protect citizen identity, streamline central bank operations, and increase transparency in elections governmental functions, Tapscott said.
For example, citizens could store their personal information – such as education, work credentials and medical information – on a government-secured blockchain to better control which agencies or businesses could access the information when they apply for jobs or government services, he said.
“Once you have that, then you can start to talk about a government that’s focused on citizens, not focused on the bureaucratic structures,” Tapscott said.
You can read more reporting about blockchain and bitcoin on our tech, telecom and internet blog or on Bloomberg Law. If you liked what you heard in the podcast, sign up for a free trial of Bloomberg BNA’s legal and regulatory news and content.
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