“Blockchain”, “Bitcoin”, “distributed ledger”, and “digital currencies” are all becoming words that we hear on an everyday basis, even though they might be interpreted loosely or poorly. The hype is more significant than ever and both industry and academia attempt to better explain this concept.
The Chain-in event (Porto, Portugal, 9-10 July) exemplifies an endeavour to dig deeper into this issue. The event aimed at educating people and bringing researchers and engineers from academia, industry, and freelancers to sit together and discuss these emerging technologies. It was organised by INESC-TEC, a private non-profit research institution headquartered in Portugal dedicated to scientific research and technological development, technology transfer, advanced consulting and training, and pre-incubation of new technology-based companies. As an institution operating at the interface of the academic and business worlds, it brings closer together academia, companies, public administration, and society. INESC-TEC typically applies the knowledge and results generated as part of its research into technology transfer projects, seeking value creation and immediate social relevance.
Soumaya Ben Dhaou and Ibrahim Rohman, both Research Fellows at UNU-EGOV, attended the event and shared their study from a socio-economic perspective. In their research, they write that “The introduction of CBDC [Central Bank Digital Currency] is being studied as a counter policy against the emergence of decentralised, permissionless cryptocurrencies. Our research elaborates the possible problems that CBDC might be trying to solve, as well as the potential negative consequences that might arise from this kind of system. We conclude that the introduction of Blockchain technology should be evaluated very carefully in the context of Central Bank-issued digital currencies.” This case study shows a more critical and not-so-optimistic perspective of Blockchain by highlighting the limitations, controversies, and drawbacks of public distributed ledgers.
Several other core issues tackled fundamental questions, such as: is the technology safe and is it genuinely decentralised? The speakers and practitioners generally perceive that there are several drawbacks on the other side of the emergence of Blockchain technology (especially on cryptocurrencies), for instance: 1) wasteful on energy and resources, 2) security among selfish miners, 3) network attack, 4) slow consensus (especially in Bitcoin), and 5) limited decentralization.