13 July 2020

Mason Hayes & Curran

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Many know blockchain as the innovative technology that allowsthe cryptocurrency Bitcoin to work. The underlying blockchainprotocol can be repurposed for many non-currency purposes. Theblockchain protocol is suitable for anything that requires aprocess to record transactions and track assets, whether thoseassets relate to property, IP, finance or something else. Itpromises more efficient and transparent business transactionscompared to existing solutions.

Blockchain is still an evolving technology. In the legal worldwe are keeping a close eye on 'smart contracts' that useblockchain. We are also looking forward to seeing how blockchainfor business develops alongside other disruptive technologies, likebig data analytics, the Internet of Things and artificialintelligence.

As we enter this new decade, continued collaboration betweengovernment and private enterprises is needed to help blockchain forbusiness gain momentum. It is vital for the technology to gain thetrust of stakeholders to encourage greater uptake. As blockchainfor business matures and the technology and standards develop toaddress the challenges around data protection, regulatorycompliance and long term stability, many more projects are likelyto progress past the proof of concept phase.

We expect to see increased government and private sectorawareness and investment. Other trends to watch out forinclude:

Building on a current trend, organisations withbusiness-critical services or with sensitive data will opt for'blockchain for business' private, permissioned blockchainnetworks rather than public blockchain networks. The identitymanagement feature of a private, permissioned network that onlyallows selected participants to join is better suited for businessto business (B2B) use cases.

Consortiums and individual organisations are exploring theability for blockchain to provide an efficient, transparent form ofdigital ID for individuals or businesses. This will be valuable forfacilitating access to government services or streamlining customeron-boarding and 'know your client' checks.

The 'tokenisation' of assets is the process of issuing ablockchain token that digitally represents ownership of a realtradable asset. Although tokenisation is in its early stages, thetokenisation of assets and trading, and exchanging those tokens,will pick up speed in sectors such as financial services and realestate, improving operational efficiency and decreasing tradingcosts.

There is a strong belief at an EU level that blockchaintechnology can help build Europe's Digital Single Market. Assuch, we expect to see significant steps this year on the draftingand adoption of appropriate legal and regulatory frameworks forblockchain to help foster innovation and harmonise standards forthe Digital Single Market.

From an Irish perspective, Ireland has made progress tocapitalise on the opportunities that blockchain for businessoffers. However, more work is needed to keep upwith othermember states. To continue operating at the leading edge, Irelandneeds a clear plan and vision for blockchain. Building trust willbe crucial.

Regulation doesn't need to mean the end of innovation. As asmall nation it is possible to implement a 'blockchainfriendly', innovative and technology-neutral regulatoryframework. Countries like Gibraltar, Liechtenstein and Malta areleading the way. It is important that the newly formed governmentis on board to help drive the agenda for our businesses at anational and EU level.

Stakeholders, such as technology experts, banks and professionalservices, need to actively work together to promote blockchain forbusiness-use cases. Ultimately, success will depend on support fromthe wider community, through a mix of investment, collaboration andinnovation.

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.

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How Blockchain For Business Will Develop In 2020 And Beyond - Technology - Ireland - Mondaq News Alerts