Blockchain has one new supporter: the UK finance minister Philip Hammond. Quizzed at the Conservative Party conference on how the UK government might solve Brexit’s UK-Irish border issue, he suggested that blockchain technology may be a solution.
“There is technology becoming available […] I don’t claim to be an expert on it but the most obvious technology is blockchain.”
He didn’t go into any further detail, but in raising distributed ledger technology (DLT) as one way of facilitating ‘frictionless’ movement between Northern Ireland and the Republic of Ireland, he sparked hope that blockchain could help ensure seamless post-Brexit trade between the UK and the EU, and all without requiring Britain to be part of the European Economic Area or the Customs Union.
However, while there is some potential for DLT to be used in a post-Brexit world, there’s still a very long way to go before solutions involving blockchain tech could be rolled out at scale. And more fundamentally, even though the best blockchains ensure an immutable ledger of transactions, there would still remain the eternal issue of the initial reliability of any data entered into them.
“In my assessment there is zero chance that blockchain technology will help deliver a ‘frictionless’ border between Northern and the Republic of Ireland,” Vili Lehdonvirta tells Cointelegraph. An associate professor and senior research fellow at the University of Oxford, Lehdonvirta’s recent research has focused on the application of blockchain to the wider global economy. And while he’s familiar with the promises that have been made on behalf of DLT, he’s sceptical as to whether most of these promises will be realized.
“Blockchain has become this magical buzzword that people like Philip Hammond who don’t know what they’re talking about are pinning all kinds of hopes and dreams on. I think the onus is on the proponents to explain how blockchain tech could possibly help here. For starters, we would need to know what exactly is meant by “blockchain” here. If it means a Bitcoin-style peer-to-peer proof-of-work system, then obviously throughput and latency will be big issues, against what expected benefit?”
Indeed, scaling is still currently the nemesis of Bitcoin and other proof-of-work (PoW) blockchains (e.g. Ethereum, Bitcoin Cash, Litecoin, Monero), and while improvements have been made in recent months, it’s still hard to imagine a Bitcoin-style blockchain coping with the immense daily traffic the Irish (and every other EU-UK) border experiences. For instance, an average of around 30,000 people cross the North-South border every day for work, while 35% of Northern Ireland’s exports go to the Republic (worth around £4 billion in 2016). This is a hefty amount of traffic, yet peer-to-peer PoW blockchains aren’t particularly scalable compared to existing systems: Bitcoin can handle a maximum number of seven transactions per second (compared to Visa‘s 50,000+), while Ethereum was notoriously backlogged last December in the wake of CryptoKitties‘ popularity.
Original story and image from: https://cointelegraph.com/news/blockchain-and-brexit-how-adoption-could-help-with-ukeu-relations