[Read more session reports and live updates from the 11th Internet Governance Forum]
This was the second Dynamic Coalition on blockchain technology session on the Internet Governance Forum.
The session was started and lead by Prof. Carla L Reyes, Stetson University College of Law, member of the Dynamic Coalition of blockchain technology, working on governance and regulatory efforts. She noted that blockchain technology represents transformative potential for peer-to-peer based economic, and social coordination. The DC on blockchain will try to push the discussion towards more policy-based questions. Indeed, in a last year, the focus was moved onto underlying technology; the distributed ledger technology, she add. Developments in the field of distributed ledgers technology moved it towards new solutions such as distributed ledgers for mortgage data, health data, distributed storage, notary services, and many more applications. Blockchain and ‘distributed ledgers’ are not synonymous. A distributed ledger can come in many forms and ‘smart contracts’ such as Ethereum’s TheDAO (Decentralized Autonomous Organization) certainly draws some attention. In addition, the almost instant breach and theft from one of these funds, raised security concerns, she explained. We should also recognise the IGF’s efforts to put the issue of the blockchain on the discussion table, as well as a W3C for looking on standards for the future developments, Reyes added.
Mr Walid Al-Saqaf, member of the Internet Society Board of Trustees, developer (and blockchain enthusiast), pointed out two important things in the blockchain technology: trustless trust (no need for the central authority or intermediary) and immutability (whatever is on a blockchain stays at the blockchain). He announced on the behalf of ISOC, that the Internet Society will encourage the creation of special interest groups around blockchain and distributed ledger technology. He also stressed the similarity between the Internet and the blockchain, in the way in which they are constructed, with the idea of openness as a starting point in design. Regarding security, as in other cases, the weakest link is not technology but people who use it. We cannot blame Bitcoin for being used for bad things, he added. Since the transboundary of distributed ledgers data resembles the Internet transboundary nature, Al-Saqaf asked whether we should maybe take a similar approach for current global Internet treaties and declarations (such as the Budapest Convention for the Cyber Security). He also raised the the issue of blockchain vulnerability in a form of current limited scalability. In order to meet the global demand, distributed ledger systems would need to deliver a vast amount of data, and therefore possibly burden the users to run a massive data record.
In further discussion with the audience many question were addressed. Participants were interested to know, could these new types of contracts cause jurisdiction uncertainties. Some of them recognised the importance of shifting focus from categorising blockchains as a currency (therefore desirable by central authorities to get regulated) toward commodities.
Reflecting on this question, Prof Reyes added that in the US cryptocurrencies are categorised as property by the IRS; as a stored value on the State level; as a commodity by the CFTS; and security by the Securities and Exchange Commission. This alone proves that the legal framework would need significant updating regulating these issues. She added that many would argue that a contract either written in code or on a paper is still subject to the contract law. Bearing in mind that immutable contracts are illegal in some countries, the battle for the wider legal regulations would be long.
In the closing statement, Al-Saqaf and Reyes emphasised that now is the right time start to take an inclusive multistakeholder approach towards solving the future blockchain technology issues. We should think proactively towards protocols and what kind of protocols we need, they added.
Key issue to look at are the good practices across the globe (mentioned is the case of an EU state – Luxemburg, which will soon launch a national blockchain). Of course, one of the big questions is how to approach the accountability, but there are common risk assessment processes and ways to distribute the risk, and find the right accountability formula (such as in credit card accountability)
At the end of the session the audience proposed that looking at blockchain as a tool should not be separated from Artificial Intelligence and Internet of Things, since all of these technical developments have one common denominator - the are all autonomous systems.
by Arvin Kamberi