Can Blockchain Solve Brexit Border Woes? UK Finance Minister Believes So

Phillip Hammond, the U.K. finance minister, stated yesterday that blockchain technology could help smooth trade across the Irish border after the U.K. leaves the European Union. However, Hammond is the first to admit that he has no idea what he is talking about.

UK Minister Relies on Poor Understanding of Tech in the Wake of Failing Negotiations

There is ever-growing concern about how the U.K. leaving the European Union next year will impact the U.K. itself, as well as their European neighbours. Since it is the only nation to share a border with any of the U.K. and naturally does a huge amount of trading with the departing country, Ireland is thought to be one of the nation’s most heavily impacted by Brexit.

In addressing the growing issue of how Ireland will be able to continue to trade with the U.K. after the leaving date, the U.K.’s finance minister, Phillip Hammond, cited blockchain as a technology that could potentially alleviate much of the concerns. According to Reuters, he said:

“There is technology becoming available (…) I don’t claim to be an expert on it but the most obvious technology is blockchain.”

Such a statement should be of immediate concern to anyone with anything to lose from Brexit or those who understand blockchain technology. Evidently, Hammond falls into the former category exclusively.

The issue is with the Irish border. Years of conflict have raged on either side of that particular line on the map and the uneasy peace established in the late 1990s rests largely on the ability that the Southern neighbour has to do trade with the U.K. to the north.

With so much currently unknown about the nature of a Brexit deal, there is no clear indication if such trade will be able to continue.

For Hammond to claim that a distributed database can in any way improve the fate of Ireland’s trade in the wake of a hard Brexit is ridiculous. Whereas a blockchain can be used to monitor supply chains (the efficiency of using such a system with our current technology over a standard database remains to be seen), there is absolutely nothing about a blockchain that makes them well-suited for reducing necessary border checks on goods in the event that a hard border between the U.K. and Ireland is the fallout from Brexit.

Bitcoin and other cryptocurrencies work on blockchains because they are purely digital. Traded goods are not.

Rather, it seems that Hammond has been sold snake oil by the likes of Reply LTD with their “Blockchain for Brexit” report (cited by the Financial Times), or perhaps is trying to sound like he has a firmer grasp on the situation that he clearly does.

Public blockchains are great for certain things – security and immutability – but that doesn’t mean they are the solution to every problem ever. They are expensive to run in a properly decentralised manner and at the end of the day, most applications touting the tech probably don’t need the level of security afforded by a true blockchain.

The issue with the Irish border isn’t a trust one, it’s political. Blockchain removes the need for parties to trust one another and it does it very well, but at a great cost. To protect a multi-billion-dollar network, like Bitcoin, it’s perfect. There is no reason whatsoever to think it can speed up the process of trading goods across a border.

It’ll be interesting to see how Hammond develops his blockchain solution for the Irish border in the months leading up to the Brexit date. He probably should start by learning what one is and isn’t.

Featured image from Shutterstock.

The post Can Blockchain Solve Brexit Border Woes? UK Finance Minister Believes So appeared first on NewsBTC.

by Rick D. on October 03, 2018 at 12:30AM