Blockchain – a key innovation or mere hype? acatech HORIZONS publication provides a basis for discussion

Illustration: acatech

Berlin, 16 October 2018

acatech – National Academy of Science and Engineering launches its new “acatech HORIZONS” series at its Annual Meeting in Berlin’s Konzerthaus. The topics covered by the acatech HORIZONS series are selected through a broad dialogue process and explore technology fields that are already looming large on the horizon, but are still affected by uncertainty concerning their potential impacts. The first publication in the series is devoted to blockchain technology, a topic that has moved up the policy agenda since the Federal Government began work on a blockchain strategy. 

The first publication in the acatech HORIZONS series will examine applications, challenges and developments in the field of blockchain technology. It is the product of extensive analyses and technical discussions with experts from science and industry. Blockchain is a transaction database that has the potential to transform the digital economy by enabling platforms without central platform operators in areas such as supply chain management or record-keeping. This will make it easier to ensure secure transactions in decentralised energy and mobility systems and will also simplify digital public administration. However, it is still too early to predict just how widespread the use of blockchain technology might become and the fields of application in which it could prevail.

acatech HORIZONS publication provides a basis for discussing the development of a blockchain strategy

Blockchain faces a dilemma frequently encountered by innovative digital technologies: at this early stage in its development, there is no guarantee that it will ultimately enjoy widespread success. However, if we sit back and wait for other companies and economies to develop their own successful blockchain solutions, we may find that we have fallen too far behind to close the gap on them. According to Manfred Broy, head of acatech’s blockchain working group, “There is no guarantee that blockchain technology will be an unqualified success. Nevertheless, it clearly has the potential to become a key technology that transforms many areas of both the economy and our everyday lives. Although there have been some promising initial developments in Germany, we need to start acting now or we will miss the boat.”

The innovators are based in Berlin, but are filing their patents abroad

A blockchain community with excellent international connections has sprung up in Berlin. However, its members are going abroad to file their patents and start up their companies. This is because the regulatory framework and financial laws in other countries are more conducive to the establishment of blockchain-based start-ups. Globally, patent applications connected to blockchain technology increased more than fourfold between 2016 and 2017 alone. Expert interviews for the acatech HORIZONS publication identified the following areas where action is required:

  • The blockchain community needs clarity regarding exactly who it should be speaking to in government and within the relevant authorities. After this, the next most important issues for the community include funding programmes and specific changes to the law.
  • In order to develop blockchain technology, it will be necessary to provide opportunities for technical and regulatory experimentation and to establish concrete pilot projects within industry and the public administration.
  • The General Data Protection Regulation (GDPR) is geared towards the centralised structure of today’s platform economy, establishing the obligations of central operators. However, it fails to adequately account for decentralised blockchain solutions.
  • Other governments around the world are working harder to develop blockchain norms and standards.
  • The rapid introduction of investor-friendly regulations for blockchain start-ups and smart contracts could attract capital, blockchain experts and start-ups to Germany and encourage them to stay there.

Blockchain is a team game

The highly cross-cutting nature of blockchain means that a national strategy for this technology will only succeed if all the relevant actors join forces. According to acatech blockchain group member Roman Beck, “Blockchain is a team game. In order to develop a national blockchain strategy, it will be necessary for thought leaders in government, industry, academia and civil society to work together.” Other nations, including some in Europe, are already pursuing national blockchain strategies, particularly in the public sector. “A national strategy should focus on applications where blockchain technology can deliver genuine benefits. It is important that government should itself be among the first to launch pilot projects in areas such as public administration and e-government, where blockchain technology can add real value.”

The new acatech HORIZONS series

The “acatech HORIZONS” series explores technology fields that are fundamentally transforming our everyday lives but are still affected by uncertainty concerning their potential impacts. In this series, acatech aims to analyse and evaluate these technologies in a manner that is comprehensive but also clear and easy to understand. The “acatech HORIZONS” publications are the product of a broad dialogue process. An advisory committee comprising figures from academia, industry and government as well as technology communication experts and members of the start-up scene helps acatech to select the topics covered by the series. The first two publications are devoted to blockchain and cybersecurity.

About acatech – National Academy of Science and Engineering

acatech provides advice to government and the general public, supports policymaking in the field of innovation, and represents the technological sciences internationally. In accordance with its mandate from the Federal Government and the Länder, the Academy provides independent, science-based advice that is in the public interest. acatech clearly sets out the opportunities and risks of technological developments and is committed to ensuring that ideas become innovations and that these innovations in turn lead to greater prosperity, welfare and quality of life. acatech brings science and industry together. The Academy’s Members are prominent scientists from the fields of engineering, the natural sciences and medicine, as well as the humanities and social sciences. The Senate is made up of leading figures from technology companies and organisations, together with the major science organisations. In addition to its headquarters at the acatech FORUM in Munich, acatech also has offices in Berlin and Brussels.