Blockchain and the UK

Blockchain and the UK
Image by VIN JD in Pixabay

Depending on who you ask, blockchain is either totally over the top or it’s going to save the world, your business, and your country’s economy all at once. It’s also extremely complicated, confusing, and often misunderstood.

Simply put, blockchain is a series of digital information (the blocks) stored in a public database (the chain).

Blocks are made up of three things: transaction information; information about the persons or entities involved in a transaction, using a unique digital signature, devoid of any identifying information; and information that distinguishes blocks from other blocks so that identical transactions are not mixed up with each other.

When a new block is added to the blockchain it becomes publicly available for anyone to view and users can sign up to connect their computer to the blockchain to receive automatic updates when a new block is added.

Each computer on the blockchain network contains a copy of the blockchain, creating thousands of copies and making information incredibly difficult to manipulate.

Cryptocurrency protocols are often built on blockchain – they are essentially fully peer-to-peer electronic money systems without the involvement of trusted third parties such as banks or governments that are often involved in such systems.

Despite the continued inaccessibility of the technology, companies and countries have already started to find new and innovative applications for blockchain. Here are just some of the ways blockchain is being used in the UK.

Innovate United Kingdom

In 2018, the UK government’s “innovation agency” promised a total of £19m to fund innovative ideas for new products, processes and services in the areas of ’emerging and enabling’ technology, including distributed ledgers or blockchain and health and life sciences.

The government has specified that projects must have the potential to transform a wide range of markets and generate significant economic growth, as well as provide business growth, productivity or export opportunities for at least one small or medium-sized enterprise (SME) and be applied in more than one industry, sector or market.

Alongside blockchain, the government has also considered projects focusing on biofilms and energy harvesting, big data and cybersecurity, robotics and sensors, satellite communications and Earth observation, among many other topics.

Isle of Man Global Center

Earlier this year, the Digital Isle of Man, an advisory body based in the autonomous British Crown dependency located in the Irish Sea, launched a global hub for the development of blockchain initiatives.

The body also opened the Blockchain Office to “guide blockchain businesses through current and future regulatory landscapes”, and the Isle of Man Sandbox, a “testbed” for innovative new blockchain projects.

The Office’s main function is to “facilitate dialogue between companies and local and international regulators” and “help blockchain platforms design and prepare their concepts for the future” according to the regulation. He will also provide guidance and marketing support and encourage collaboration.

Meanwhile, the Sandbox is intended to be “a collaboration space” for companies to “live test” their product, service or delivery mechanism in an environment where the risk to “ordinary financial consumers” and financial systems is contained.

Read too: Best Crypto Exchanges to Trade Bitcoins, Altcoins

“The response . . . has been tremendous, with a host of premium blockchain businesses and emerging startups approaching the Office for early participation,” said Lyle Wraxall, CEO of Digital Isle of Man, in a declaration issued by the island government. “There are no signs of waning interest and we look forward to collaborating with these innovative pioneers…”

cryptocurrency working group

The UK government convened a Crypto Assets Task Force in May 2018 to research and outline the country’s policy and regulatory approach to crypto assets and distributed ledger technology in the financial services sector as part of the comprehensive governmentFinTech Sector Strategy.

The task force consisted of Her Majesty’s Treasury, the Financial Conduct Authority (FCA) and the Bank of England, and released its final report in July of the same year.

It commits the authorities to take steps to “maintain the UK’s reputation as a safe and transparent place to do business in financial services”, ensure high regulatory standards and protect consumers in financial markets, guard against possible future threats to stability finance and enable innovators in the financial sector who “play by the rules to thrive”.

FCA Innovate

This is a sandbox initiative created by the Financial Services Authority (FCA) in the UK, which allows companies to request support and also test their services within a regulatory sandbox. Although the project is not explicitly focused on blockchain, 40% of the companies selected for the initiative fourth cohort were based on blockchain.

For example, Phoenician is a blockchain-based digital platform that allows companies to issue and manage debt and equity securities, including crypto-backed securities, and 20|30 is a platform based on distributed ledger that allows companies to “raise capital in a more efficient and simplified way”.

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