When talking about blockchain, the first thing that usually comes to mind is the Bitcoin cryptocurrency network. Yet cryptocurrency is only one of blockchain’s many possible applications. A multi-purpose and potentially pervasive new technology, it offers an alternative for storing and exchanging not only information, but also value and assets. According to expert evaluations, this technology could also have an impact on social paradigms.

What is blockchain?

Blockchain is formed out of blocks, and each block contains the cryptographic hash of the previous one, which forms a chain. What a cryptographic hash does is take the data from the previous block and transform it into a compact string. But what sets blockchain apart from more “classical“ technologies?

First of all, in blockchain it is both difficult to falsify data and easy to check its reliability. This is because of the way the blockchain is formed. As mentioned above, the strings are impossible to predict and this means that any tampering with the chain is easily detected. Being an immutable ledger, the information it stores cannot be changed or eliminated.

Second, blockchain is a decentralized system where data is dispersed across a large number of servers. This makes it difficult for any hacker to edit the information, and thus more secure for storing important or sensitive information.

As a result of these two characteristics, participants in a network can store, share and view information without a pre-existing level of trust.  The privacy of the data processed in the context of blockchains is determined by its “use of privacy-enhancing technology” like hashing (Blockchain 4 impact, 2019).

The European Commission has recognized the potential of blockchain-inspired technologies, identifying them as one of the key emerging trends in the Council conclusions of 19 October 2017. The Commission recently launched the EU Blockchain Observatory, which maps existing blockchain initiatives. Twenty-seven Member States signed a declaration creating the European Blockchain Partnership (EBP) on 10 April 2018, to promote cross-border digital public services.

Understanding blockchain technology and its role in global governance is one of TRIGGER’s objectives. One of the potential applications of blockchain is its use as an instrument to achieve the sustainable development goals (SDG) through private-public partnership. In December 2019, a paper was published with the conclusion of the Geneva Macro Lab conference “Blockchain 4 impact” at the United Nations in Geneva. The question of global regulations was raised there, as well as that of privacy and responsibility. The idea presented was that financial institutions with cryptocurrencies will ensure transparency and equal access to finance, especially for poorer households. In this way, blockchain could address the issue of financial inclusion and help to empower those who are left behind. To use blockchain as a tool to achieve SDGs such as reducing poverty, increasing gender equality and encouraging economic growth (Blockchain 4 impact, 2019), the Geneva Macro Lab suggested setting up a Global Blockchain Observatory, which would foster industry standards, regulate service providers, and promote public-private partnerships.

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