Chances are, you’ve seen the recent headlines about how emerging technologies like cryptocurrency, blockchain and other developments have affected businesses both large and small. Here, we’ll start in the shallow end with blockchain, share what we know about its potential, and connect the dots on legislation that’s currently in motion. Interested in learning more about blockchain? Join the Columbus Chamber on April 27 for Emerging Tech Policies to Watch in 2018.
What is Blockchain?
Blockchain and distributed ledger technology (DLT) can record transactions efficiently and in a verifiable, permanent way. It’s also described as an online, shared checkbook, in which every participant has access to all transactions ever made through a “block,” and all transactions are securely encrypted using a “mining network” of complex mathematical equations to verify each exchange.
While DLT serves as the building block for all virtual currency, it can also be used in a variety of valuable business applications. Blockchain allows something that exists only in the digital world to be transformed into an ownable asset with a unique identifier and value, which can therefore be sold, purchased and exchanged.
Blockchain’s Potential to Transform Business
Businesses of all sizes across all industries use databases and systems for recordkeeping –bookkeeping, client accounts, customer service complaints, medical records, shipping, product tracking – you name it. These functions historically relied on a massive paper trail, and are often separated within an organization’s structure.
What if they could all be connected to one online ledger that automatically updated across all systems in real time? That’s the power of blockchain. Smart contracts, for example, are swiftly entering the marketplace. Using DLT, agreements are self-executing upon automatic receipt of payment or performance of another legally binding obligation, such as reaching a specified GPS location or fulfillment of an order.
DLT’s power to improve transparency, efficiency, cost, collaboration, and security is making early adopters of the business community. The private, internal, single-use of blockchain technology within an organization is likely to advance rapidly, with large-scale and coordinated public adoption across societal institutions to come later.
Members of the financial services sector are avidly experimenting with DLT, but businesses of all sizes are actively considering the gradual implementation of blockchain applications.
A flurry of legislative and regulatory activity relating to blockchain technology generally and digital currencies specifically has ensued over the last two years. This includes congressional hearings; meeting of the U.S. Federal Blockchain Forum, which united dozens of unique agencies to discuss use cases, limitations, and solutions to adopting distributed ledger technology within the U.S. Government; formation of the bi-partisan Congressional Blockchain Caucus and numerous other study committees; creation of working groups within state and local bar associations and other groups across the country; and bills introduced in at least 14 state legislatures.
Inconsistency and unpredictability pose challenges for businesses. A patchwork of incongruent state and local laws are especially burdensome for companies operating in multiple jurisdictions and across geographic boundaries to navigate and comply with. Conversely, premature regulation of an emerging industry can hinder innovation and quickly stifle a burgeoning market. Businesses should be aware that this quandary often results in costly lawsuits and judicial interpretation before an issue is settled.
At the Chamber, we strongly encourage member participation in the policymaking process and active engagement in crafting a competitive business climate for businesses to grow and thrive.
Want to Learn More?
The Columbus Chamber will begin that discussion here in Ohio during our next Government Spotlight event: Emerging Tech Policies to Watch in 2018. Whether you believe the “Internet of Value” is right around the corner or that it will slowly creep into society over the next 20 years, most experts believe that blockchain technology will be part of our future – in business and in society.
We hope to provide invaluable information to help businesses understand how future regulation of these new technologies could impact your decision-making and your bottom line and invite you to learn more at a moderated panel conversation on April 27.
— The Columbus Chamber of Commerce offers news, information and other resources that are free and available to all businesses at columbus.org. —