Founded in 2006, ITIF is an independent nonprofit institute that provides policymakers with information, analysis and recommendations for handling new technology. In its new guide, ITIF included an array of proposals for policymakers to better regulate blockchain based on principles like technology neutrality and public-sector adoption.
The guide predicts that blockchain will likely factor into major applications such as cryptocurrencies, shared data services, smart contracts, decentralized marketplaces, authenticity tracking, and digital identity applications. It also adds that uninformed lawmaking threatens to hamstring development.
Data-use regulations in particular can affect blockchain deployment. For instance, some of the E.U.’s provisions, the guide explains, are inconsistent with the tamper-proof nature of blockchain transactions.
As blockchains are peer-to-peer networks without intermediaries, it is difficult to edit or retroactively change data. It is possible that some users could exploit the technology to store prohibited information, but the report stresses that “current versions of public blockchains are not optimal solutions to storing or sharing illicit or pirated content.”
Generally, ITIF encourages governments to make more effort to support legitimate blockchain innovation and adoption by developing relevant regulations that do not limit blockchain-based applications out-of-hand.
Reflexive measures run the risk of cutting off blockchain development outright. Earlier this week it came to light that the Indian government is examining a bill that would ban cryptocurrency entirely.