Let’s say simply, this technology allows to digitally store information with two novel twists: The storage is decentralised with many copies of the chain preventing data loss. And it is tamper-proof because each portion of information, each block, is linked to the rest of the chain using encryption technology. This simple setup, which almost mirrors the underlying architecture of the internet, allows for a multitude of innovative applications.
The first one that comes to the mind of citizens is Bitcoin, the most popular cryptocurrency that is still the best-known applications of blockchain.
However, some of the challenges of cryptocurrencies, such as their volatility and high electricity consumption, are not inherently caused by the characteristics of the underlying blockchain technology.
Blockchain has something unique to offer. It can implement, or replace, any central repository of information which needs to be both protected and trusted as to its maintenance and integrity. Blockchain can provide for proof of temporal priority, certification of document content, secure storage and much more.
That is why blockchain is very likely to challenge many existing business models, for example through dis-intermediation.
Other experts even say that this technology will establish completely new foundations for large parts of our economy. In any event, blockchain looks like another digital game changer.
The World Economic Forum expects that by 2025 10% of global GDP could be stored, via digital assets, on blockchain. And the venture capital industry has already invested well over EUR 1.2bn into more than a thousand blockchain start-ups, about one third in Europe.
This comes on top of a lot of individuals investing through “Initial Coin Offerings”, a blockchain-specific way of exchanging participation in a new project against funding.
Of course the Commission has already been looking at blockchain technology for quite some time and has funded projects already since 2013.
The support for relevant projects will increase up to EUR 340m over the next few years. For example, the “MyHealthMyData” project is using blockchain to protect patient data and empowers patients to share private information in a secure way. The “Decode” project also helps put individuals in control of their personal information and decide whether to share it for the public good.
Europe cannot afford to miss this opportunity for our citizens and our economy.
But now we need to make sure that blockchain can continue to develop in Europe. We need to make sure that blockchain will contribute to the development of the Digital Single Market!
To this end, on the first of February, together with the European Parliament we have launched the EU Blockchain Observatory and Forum.
This Observatory should become a comprehensive repository of blockchain experiences and expertise, as well as a source of knowledge and inspiration, by bringing together all stakeholders, policy makers, businesses and users. And I would like to call on for an active participation all stakeholders. Only together we can reach results.
We are also already closely working with interested Member States such as France, Belgium, Luxembourg, the Netherlands, Slovenia and Malta.
But of course everybody is invited to get on board.
And, perhaps most importantly, we need to boost skills: there are not enough developers, engineers, and blockchain experts.
Finally, we need to support interoperability and ensure that blockchain can work globally on the basis of international standards.
I am working to strongly support blockchain development along all these dimensions, research and development, investment and regulatory framework.
The digital single market and all European citizens stand to benefit.