At the Australian Blockchain Conference earlier this week, Greg Medcraft, currently Director – Directorate for Financial and Enterprise Affairs, OECD and previously Chairman of ASIC, attempted to outline many of the risks associated with a Blockchain environment, and then positioned Bitcoin in that framework.
Medcraft initially outlined four broad risk categories that are specifically associated with innovation in blockchain:
- “Relating to the ownership and use of data stored on the distributed ledger. I think ‘privacy’ is going to be a big, big topic in the next two or three years.”
- “Whether it be in areas such as ‘identity’ or ‘authentication’ or ‘cyber security’. “
- Consumer and investor protection issues. “Whether it be in governance of the entities or disclosure – many of the fundamental policies which will apply in a digital world in terms of competition, interoperability – you can’t have one particular system that is not interoperable; that creates competition issues, which then creates issues for consumers and investors. Then also we’ve got to think about market integrity – we need a transparent market, that’s the best protection. Also, Education – education is really important for people who are going to try to use reliable technologies.”
- Transferability and traceability. “In terms of regulators, tax authorities and law enforcement agencies.”
“I think for these reasons, Bitcoin doesn’t have much of a future, unless it changes – a lot.”
He also observed that there was still a “wild west” mentality in much of the blockchain environment and there is a need for the “rule of law” to come into play in order to permit monetary applications to become more mainstream.