EU Parliament Report Explores Blockchain's Social Impact

Is the spread of blockchain representative of a shift in Europe's social values?

That's the question posed in a new paper from the research arm of the European Parliament. According to the authors of the publication, the technology's biggest impact "could be through its contribution to subtle changes in broad social values and structures".

What they argue: After touching on the more material costs of running bitcoin's blockchain – namely the energy costs associated with mining – the authors look at the socio-cultural drivers of interest in a technology that prioritizes transparency and access to information.

As they write:

"To say that blockchain's popularity is due to increasing social trends to prioritise transparency over anonymity, to diminishing trust in traditional financial and governance institutions, and to expect greater levels of accountability and responsibility in all aspects of our lives, is only part of the story. Nevertheless, using blockchains instead of traditional ledgers actually invokes these very shifts in society."

The context: Observers of European politics since the financial panic of 2008 will have undoubtedly noted an increase in anti-government sentiment, particularly toward the EU itself.

Political campaigns such as the vote to take the UK out of the EU and right-wing politician Marine Le Pen's failed bid to secure the French presidency earlier this month are just two examples of the "diminishing trust" highlighted by the report.

What comes next: According to the report's authors, policymakers have a few approaches they can take in this light.

Three proposals center on some degree of adoption of the tech by European governments, including a more proactive path in which they "actively encourage development and innovation of blockchain technology by granting legitimacy to their products".

On the other hand, policymakers could take the reverse approach and refuse to recognize the legality of smart contracts, for example.

Read the full report here.

Social impact image via Shutterstock