With that question, MEP Jakob von Weizsäcker kicked off a session of discussion yesterday held at the European Parliament (EP) and centered on the future of blockchain regulation in the 28-nation economic bloc.
The "Spotlight on Blockchain" workshop, hosted jointly by the European Parliament and the European Commission, gathered representatives from across the blockchain sector to discuss use cases and platform security.
Part of the program of the Blockchain Observatory, a formal fact-finding initiative launched in April and funded with €500,000, the aim was to cautiously approach the who, what and why of blockchain legislation.
As such, von Weizsäcker went on to posit an answer to his question:
"It's probably too early to intervene at this stage, because we as legislators don't yet see sufficiently clearly to know what the main issues are going to be – so in order to not to stifle innovation, we don't want it to be now."
Peteris Zilgalvis, head of the European Commission's Startups and Innovation Unit, explained that the term 'workshop' was chosen to reflect the collaborative intention of the session.
"We don't want to just talk. We also want to listen, and we want to enable," Zilgalvis told CoinDesk.
Von Weizsäcker stressed the desire of the European Union (EU) to monitor, not suffocate, and pointed out that its role is to respond to the needs of constituents. To this end, the EP wants to get a feel for the sector, since "there is a public interest in what's going on".
Overall, this interest was evident in the room, where every seat was full and stand-ups were lining the back wall. There, parliament members, financial enterprises, academics and blockchain businesses were eager to hear more about what could be the first step toward building a comprehensive policy that would clarify development in the future.
Far from delivering the expected conciliatory and safe platitudes, the comments from moderators and panelists alike showed a willingness to recognize the urgent need for a new understanding and new rules, as well as a strong desire to overcome the difficulties in deciding what those rules should be.
The subject of liquid democracy came up often, culminating in the question, "What will the role of politicians be?". One commentator remarked on the irony of a disruptive technology that, rather than generating chaos, adds stability.
The opinion was ventured that it's not so much about creating new regulation as about adapting existing regulation to new terminology. And concern was expressed about the consequences of something going wrong with the technological base of a new paradigm.
In a wide-ranging keynote speech, technologist Vinay Gupta called on the EU to "pick up the pace", and outlined a framework to understand the difficulties in regulating software. In short, according to Gupta, you can't. Software is "regulated for what it does", he said.
In conversation with CoinDesk, MEP Eva Kaili repeated this sentiment:
"We can’t legislate the technology, but we can legislate the uses."
In her closing remarks, Claire Bury, deputy director general of the European Commission's Directorate General for Communications Networks, Content & Technology, cited ethereum as "one of the more sophisticated applications".
She went on to highlight the technology's challenges, quoting developer Vlad Zamfir's recent tweet that "ethereum isn't safe or scalable".
The surprising mention of the smart contract platform by a regulator was echoed in the results of an audience poll. In response to the question: "What should regulation focus on?", the most popular answer, displayed in full color on a screen above was "ethereum".
As for next steps, the Blockchain Observatory will continue to engage industry representatives to get a feel for where to focus their regulatory efforts. The sense of urgency was palpable, but seemed to stem more from intense interest than a conviction that it would be easy.
As von Weizsäcker pointed out, "It's going to take a little bit longer than people anticipated."
An important question, he emphasized, is what governments could do to help the development of digital technology. Von Weizsäcker ventured that this could be achieved by governments using that technology themselves.
He then suggested that an example could be an application that did two things: 1) put identities of companies or people on the blockchain, and 2) put money on the blockchain, speculating that private applications could be built on such an infrastructure.
Lastly, the subject of bitcoin as a new form of money was broached, as was the question of whether it – or something similar – would ever replace the fiat currencies we know today.
Von Weizsäcker was notably noncommittal on that front. He did, however, make an observation that cryptocurrency enthusiasts are familiar with, but that was unusual coming from a politician.
"What is a currency really? It's a ponzi game."
Image via Noelle Acheson for CoinDesk