Blockchain: Embracing the new kid on the block

Written by Caroline Nagtegaal on 26 April 2019 in Opinion
Opinion

Blockchain is only one of many emerging technologies that could benefit Europe; we mustn’t be the weakest link, argues Caroline Nagtegaal.

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Blockchain is the new IT girl in the world of innovation and financial markets. A system based on blockchain is an opening to making futuristic technologies a reality.

Some say that in the financial world, the arrival of blockchain will make some professions obsolete.

In addition, by writing this paragraph and beginning my article this way, I might already have people shouting at me, “No Caroline, blockchain is a has-been. We already have a new technology that is much better.”


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It shows how quickly innovation happens - something I am very happy about.

This doesn’t mean I don’t believe in blockchain; I am not the one who actually decides which innovation will be successful. That is up to the market.

Blockchain technology, however, is very promising and has already delivered results.

A so-called ‘Distributed Ledger-technology’ blockchain has the ability to create a trustworthy system, even although we may not have confidence in one particular player within that system.

“In giving new technologies a chance, we still have the responsibility of making sure that this happens in a safe environment”

This has huge potential for several markets. It can make them more efficient, with lower transaction fees due to cost reductions and with improved resilience to cybersecurity threats.

However, although blockchain has delivered concrete results in the past few years, most of the benefits are still promises, as the technology is still at an early stage.

Therefore, that is where the duty of a policymaker starts. As I already said, it is not for me to decide which technology will work, that is up to the market.

My job as a policy maker is to encourage new technologies, innovations and ideas and give them a chance to grow and prosper.

By embracing these new technologies, we can put them to the test - but what are the potential risks and benefits?

Those questions can only be answered if we give innovation a chance.

However, in giving new technologies a chance, we have responsibility for making sure that this happens in a safe environment, one where the market can test technologies that could conquer the world while keeping an eye on potential risks.

“My job as a policymaker is to encourage new technologies, innovations and ideas and give them a chance to grow and prosper”

I see opportunities in European legislation to provide safe environments for new technologies to thrive.

This does not mean that we should not regulate the technologies; I would describe it as enabling.

Of course, potential risks to, for example, financial stability need to be minimised - obviously we do not want to jeopardise Europe’s economy.

But we need to strike the right balance here; innovation comes with risks.

As long as we can manage these risks, we should give new technologies the space to grow and thrive.

Easy ‘pump and dump’ schemes, for example with cryptocurrencies, should qualify as fraud, but of course we should not ban an entire technology simply because some might misuse it.

So, what is the way forward? Blockchain gives us huge opportunities not only in the financial sector but also in health, energy, security and digital infrastructure.

It has potential in ways we do not yet realise. That is why it is so important to give these new technologies a chance.

My own country, the Netherlands, is already the front-runner in this field. The Dutch have created an environment where government experts and business experts can join forces to come up with the best ideas for innovation to thrive.

By giving them space to grow, we enable them to develop best practices we can all benefit from.

In the happy wonderland of innovations, when a new IT girl comes around, the next one is already waiting to be discovered. That is what I find fascinating about innovation and technology.

These are the best Europe has to offer. Such products are not made in the European Parliament, but we should not underestimate our role in facilitating and enabling their innovation.

We can actually give our entrepreneurs the space they need to come up with new ideas and thrive.

Probably, by the time you have finished this piece, a new blockchain innovation has already been created somewhere in Europe.

At the same time, probably some of you are still saying, “No Caroline, there is already a new innovation that is much more important than...”

That may very well be true, so take the space and go for it. We all stand to benefit.

About the author

Caroline Nagtegaal (NL/ ALDE) is shadow rapporteur on distributed ledger technologies and blockchains

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