European Commission Study: "Very optimistic about the reform potential brought by blockchain"

The European Union Joint Research Centre recently released a report assessing the various impacts of blockchain and other distributed ledger technologies globally, maintaining an optimistic outlook on their potential.

The report entitled "Blockchain Now And Tomorrow," which can be found at this link, is highly optimistic about the reform potential brought by this technology, according to the European Commission and the Joint Research Centre (link). The report asserts:

Blockchain is expected to be one of the technologies that will have a profound impact in the next 10 to 15 years, with short-term support from venture capital.

Significant Growth in Capital Inflows

The report points out that in recent years, there has been a significant influx of venture capital into blockchain, increasing from 4.5 billion euros in 2014 to 39 billion euros in 2017, and eventually reaching 74 billion euros last year. These numbers indicate that in the past 12 months, venture capital has expanded significantly into this field. The report indicates that the Commission's researchers believe that this capital influx reflects the seriousness with which the technology is being taken. The report lists many characteristics and advantages of the blockchain industry:

Decentralization, immutability, transparency, security, and smart contracts that do not require third-party intervention.

While the report takes a cautiously optimistic view of the future of cryptocurrencies, researchers also point out current challenges:

The technology has either not reached widespread adoption or is limited to a minority of participants. Apart from performance and scalability, other challenges remain in terms of integrating with traditional infrastructure or standardizing and interoperating between different systems.

Huge Potential in the Supply Chain Sector

The report reiterates the European Parliament's position on cryptocurrencies from November 2016. At that time, Bitcoin became the main focus of blockchain technology, and the resolution emphasized the potential of distributed ledgers in the financial sector, especially in cross-border transfers. The European Parliament also recognizes the potential uses of blockchain technology, including the enormous potential in the supply chain sector:

Regardless of where on Earth, blockchain can record, certify, and track any type of digital assets and related transactions among parties.

Therefore, within a global distributed supply chain, blockchain systems can facilitate "seamless" and "frictionless" interactions between remote and untrusted participants, including manufacturers, retailers, transporters, suppliers, and consumers.

In general, large multinational corporations often discover the potential of new technologies ahead of government authorities, but this time, European government institutions seem to be more insightful.

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