Though it has taken some time, blockchain technology has been
Though it has taken some time, blockchain technology has been developing over the years and now finally it has become something that a lot of people are taking note of. With this also emerges a scenario where many countries and institutions are also trying for increased adoption of this technology.
What is Blockchain?
Blockchain is a shared immutable ledger for recording the history your transactions. It is a peer-to-peer network, which enables value exchange and also is considered to be the most secure means of transferring value, which in theory could remove the need for banks.
It is so designed that it is resistant to modification of the data and thus once the data is recorded, any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires the consensus of the network majority.
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Issues regarding the regulation of blockchain
As discussed, there is an increased demand for implementing the new technology. However, as a result, cryptocurrencies are now starting to face regulatory pressures.
As their market capitalization continues to grow, governments have also started to take an increased level of interest.
This is leading to increased regulations amongst the states, even if regulatory uncertainty comes in many forms and has many consequences.
As for example, many governments have already started to or at least threatened to declare cryptocurrencies illegal in their territories.
Even Bitcoin, which is the most widely used cryptocurrency and possibly the most popular one too, is only entirely unrestricted in 110 countries and is outright banned in countries like Algeria, Morocco, Ecuador, Iran, Pakistan, and more. According to reports, the police in Bangladesh, have arrested Bitcoin owners.
However, though this issue of regulation may be hampering the innovative growth of the technology, a complete lack of regulation also creates issues, like market manipulation.
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Many experts now firmly believe that the extraordinary cryptocurrency boom of late 2017 was the direct result of collusion between exchanges.
Even when governments try to take a slow, steady, and reasonable approach to regulation, issues arise. As for example, since blockchains are immutable, what happens if they meet regulations today but fall foul of future regulations? No one will be able to update, change, or amend them.
Conclusion
This technology raises many legal questions when considering its application. Certain areas of law which will need a wider awareness of and which will need to be considered from a regulatory aspect includes company law in respect of ICOs and its application, data protection in respect of security in the technology, securities and anti-money laundering and taxation issues. Standardized regulations in these spheres are necessary, across all country if blockchain is to get more acceptance.
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