blockchain Technology: Opportunities and Challenges is a conference currently underway at the Bundesbank Conference Centre in Eltville, Germany on the Rhine River. The conference was organized by Germany's central bank, Deutsche Bundesbank, in collaboration with the internationally renowned, Frankfurt School of Finance and Management. Scheduled to take place across the four days between November 21st and 24th, the conference is centered around a series of workshops hosted and facilitated by speakers from European central banks, financial institutions, EU Parliament, industry and academia.
The Blockchain Revolution
Deutsche Bundesbank describes the focus of the conference as follows: "This workshop addresses technological achievements of Blockchain and possible business cases especially in the financial sector. It tries to answer the question whether Bitcoin has a future in payments and illustrates examples for a possible use of Blockchain Technology. Furthermore, it discusses the topic from the viewpoint of central banks and regulators."
Blockchain technology has been heralded as a truly revolutionary financial technology innovation for a number of unique reasons. In essence blockchain is described as a distributed database that expands link by link, block by block, in a steady and segmented fashion.
Each block contains a specific time stamp as well as a link to the previous block in the chain. The data inside each block, by design and through the power of complex cryptography cannot be altered. Blockchain technology has been celebrated for the way this technology can democratize global financial transactions and trade.
A blockchain system allows consumers and suppliers to connect directly, removing the need for a third party such as bank. Because of how the system is designed, blockchain technology has been suggested to be extremely secure. In essence the blockchain acts as a decentralized database or on-going digital record of transactions which everyone on a particular network can view independently.
The first blockchain designed by Satoshi Nakamoto in 2008. In 2009, bitcoins were unveiled and were the first currency to be built off of blockchain technology. By utilizing a peer-to-peer network and a decentralized timestamping server, a blockchain database is managed autonomously.
Will blockchain change the world?
In a 2014 interview with the Frankfurter Allgemeine Zeitung, Deutsche Bundesbank board member Carl-Ludwig Thiele suggested that bitcoins should be regulated by central banking authorities. In that interview Thiele outlined the speculative nature of the bitcoin market as the main reason to seek regulation: "Bitcoin users often assume that Internet payments with bitcoin are cheaper than international bank transfers or paying with a credit card.
They forget, however, that the price of bitcoins fluctuates greatly, among other things. Ultimately, the losses can quickly become considerably higher than transfer or credit card fees."
At this time, it is unclear whether Blockchain Technology: Opportunities and Challenges will lead to new German or European regulation around bitcoins and other blockchain technologies but it is abundantly clear the topic has gained the attention of the world's largest financial institutions and regulatory bodies.
