On January 19, the UK Government’s Department of Science released an 88-page report on blockchain technology, titled Distributed Ledger Technology: Beyond Block Chain. (They’ve also released a short video to accompany the UK blockchain report.) The report is just the latest effort by a government department to not only define blockchain technology and Bitcoin for a non-technical audience, but to lay out a plausible game-plan for potential blockchain implementation for government services and major industries. Here are the highlights of the UK blockchain report.
UK blockchain report: A groundbreaking technology
Since the report is designed to sell legislators on the Department of Science’s specific recommendations, the report’s writers have gone to great lengths to state their case for the revolutionary possibilities of blockchain technologies. The language is simple and accessible, and designed with its non-technical audience in mind.
The report begins by offering a historical context for disruptive technological innovations like Bitcoin and blockchain. For example, the UK blockchain report considers the entire history of money itself, from “cowrie shells to hammered pennies to Bitcoin,” and looks at these technologies as key stops along a continuum of innovation. This theme of evolving processes and technologies, with the role that decentralized systems could have to play in the continuation of that evolution, is a consistent motif.
Another major focus of the report is to explain computer code as both separate from and related to legal code, examining the ways in which the former influences the latter and vice versa. As the report explains, legal code requires external enforcement, while computer code is self-enforcing. The report suggests services that could benefit from a hybrid approach – legislation developed with with progressive coding in mind, in collaboration with experts. It also outlines the differences in practice between private rule-making (governance) and public rule-making (legislation), arguing the need for new models of governance for these systems that take into account the needs of both regulators and users. As the report points out, some important internet technologies, such as TCP/IP, were the direct result of government technology initiatives, so we know that successful collaboration is possible.
The report emphasizes the importance of the UK’s continuing efforts to act as leaders for technological innovation on the world stage. It argues that the UK already has some crucial initiatives in place that could be put to work on inventing tomorrow’s solutions, including the Alan Turing Institute, and warns of the dangers of being too cautious or waiting for perfect solutions to emerge before getting a strong foothold in the space.
The report also dives into a variety of case studies, in support of its argument that decentralized technologies are already finding compelling applications of interest to government actors. It looks at the Estonian government’s assortment of blockchain-based financial solutions, the European Commission Energy Union Framework Strategy’s investigations into modernizing the management of the Euro electrical grid with distributed ledgers, Everledger’s system for assuring the identity and source of individual diamonds to help crack down on the market for “blood diamonds,” and more, while also speculating on potential solutions that have yet to be developed, such as using distributed ledger technology to shield civil infrastructure against cyberattacks..
UK blockchain report: potential threats
Alongside the opportunities, the UK blockchain report also identifies key challenges and threats. It notes the security challenges that arise when permissions are used, highlighting the need for comprehensive review of the specific security needs of individual sets of users, especially in cases where sensitive information (health records, financials) are being accessed. It identifies the greatest threat to these proposed technologies as obsolescence; non-adoption by potential users, generally because the new option is too intimidating or complex, could prove fatal.
The report’s final sections consider the global outlook, highlighting the features of what it calls digital nations, from government awareness of emerging technologies to investment in industry and the integration of business leaders and digital engineers into positions of influence. The report argues that the UK has a lot of work to do if it’s to become a leading digital nation, and offers incentives and strategies to do so. It also examines the current state of (and potential for) data and policy interoperability in matters of identification and authentication.