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Disintermediation Economics pp 249–266Cite as

Palgrave Macmillan

The Political Economy of the Blockchain

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Abstract

The law and political economy of decentralized digital ecosystems is the policy, economic and legal framework surrounding the convergence of Blockchain/Distributed Ledger Technologies, the Internet of Things, decentralized Artificial Intelligence and other emerging technologies. The key unifiers are the enablement of multi-level governance, the decentralized management of data and the distributed nature of the technologies. They will challenge the existing more centralized economic and data management model of today’s Internet and will provide self determination to citizens in the management of their data and transactions. A challenge for the implementation of these technologies is linked to their very essence, their decentralized nature. Much existing legislation was adopted in a time when more centralized models dominated. The article analyses the legal challenges of applying such legislation to decentralized digital technologies, and reflects on the use of regulatory sandboxes as well as novel legislation in order to enable innovation in the economy and society based on the application of these technologies.

Peteris Zilgalvis: Personal views hereby presented are the authors’ only, and should not in any way be construed as to represent an official position of the European Commission.

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Notes

  1. 1.

    “From humble origins, Venice had risen to true power. Poverty had been its spur, industriousness its secret. Its simple and ancient industries had developed and multiplied; its naval constructions had become extraordinary; its arsenal was unique.” Brief History of Venice, Rinaldo Fulin, lineadaqua, June 2019, San Marco, Venezia, Italy, pp. 38–39.

  2. 2.

    “Cases and materials on EU Law”, Stephen Weatherill, Oxford University Press, Oxford, United Kingdom, 2006, p. 58.

  3. 3.

    “The need for an Innovation Principle in Regulatory Impact Assessment:

    the Case of Finance and Innovation in Europe,” Policy and Internet, Wiley Periodicals, Malden, USA and Oxford, UK https://doi.org/10.1002/1944-2866.POI374, Volume 6, Issue 4, pages 377–392, December 2014.

  4. 4.

    “Can Capitalism Survive? Creative Destruction and the Future of the Global Economy”, originally published as “Capitalism, Socialism and Democracy” by Harper & Row, New York, 1942, pp. 42–43.

  5. 5.

    “Virtual Competition: The Promise and Perils of the Algorithm-Driven Economy”, published by Harvard University Press, Cambridge, Massachusetts, USA, and London, England, 2016, p. vii.

  6. 6.

    Ibid., p. 175.

  7. 7.

    “Protocols, Not Platforms: A Technological Approach to Free Speech.” By Mike Masnick, Knight First Amendment Institute at Columbia University, published 21 August 2019, https://knightcolumbia.org/content/protocols-not-platforms-a-technological-approach-to-free-speech, accessed on 16/03/2020.

  8. 8.

    Ibid.

  9. 9.

    Ibid.

  10. 10.

    Geoffrey Hinton, interviewed by Martin Ford in “Architects of Intelligence”, Packt Publishing, Birmingham, UK, 2018, pp. 87–88.

  11. 11.

    “The European Model”, by Sarah Gordon, Special issue: Europe, the Financial Times Weekend Magazine, 24/25 May, 2014, p. 32.

  12. 12.

    John Authers, “Finance, the media and a breakdown of trust”, Financial Times, FT Weekend, 6 October/7 October 2018.

  13. 13.

    https://bitcoin.org/bitcoin.pdf, accessed on 04/03/2020.

  14. 14.

    Sessions like ‘Making Blockchain Work’ and ‘European Leadership in Blockchain: Innovation, Infrastructure and Regulation’ were featured in the second day, 21 February, which had a focus on blockchain: https://techchill.co/agenda2020/, accessed on 17/03/2020.

  15. 15.

    Brussels, 8.3.2018 COM(2018) 109 final, COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN CENTRAL BANK, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS.

  16. 16.

    https://ec.europa.eu/digital-single-market/en/news/european-countries-join-blockchain-partnership, accessed on 09/03/2020.

  17. 17.

    COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Europe’s next leaders: the Start-up and Scale-up Initiative. Strasbourg, 22.11.2016 COM(2016) 733 final.

  18. 18.

    https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12089-Directive-regulation-establishing-a-European-framework-for-markets-in-crypto-assets/public-consultation, accessed on 09/03/2020.

  19. 19.

    https://www.copyright.gov/legislation/dmca.pdf, accessed on 10/03/2020.

  20. 20.

    “Semicolon”, by Cecelia Watson, 4th ESTATE, London, UK, 2019, pp. 87–88.

  21. 21.

    Ibid., p. 88.

  22. 22.

    “Study on Blockchains Legal, governance and interoperability aspects” (SMART 2018/0038), pp. 117–118, https://ec.europa.eu/digital-single-market/en/news/study-blockchains-legal-governance-and-interoperability-aspects-smart-20180038, accessed on 27/03/2020.

  23. 23.

    Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation).

  24. 24.

    https://www.eublockchainforum.eu/reports, accessed on 11/03/2020.

  25. 25.

    https://decodeproject.eu/, accessed on 26/03/2020.

  26. 26.

    https://www.myhealthmydata.eu/why-mhmd/, accessed on 27/03/2020.

  27. 27.

    “Token Ecosystem Creation: A strategic process to architect and engineer viable token economies”, https://outlierventures.io/wp-content/uploads/2019/05/Token-Ecosystem-Creation-Outlier-Ventures-PDF.pdf, accessed on 12/03/2020.

  28. 28.

    https://www.eublockchainforum.eu/reports, accessed on 12/03/2020.

  29. 29.

    “Virtual Competition: The Promise and Perils of the Algorithm-Driven Economy”, by Ariel Ezrachi and Maurice E. Stucke, published by Harvard University Press, Cambridge, Massachusetts, USA, and London, England, 2016, p. 28.

  30. 30.

    Ibid., p. 31.

  31. 31.

    Ibid., p. 175.

  32. 32.

    “Blockchain-Enabled Convergence: Understanding the Web 3.0 Economy, by Outlier Ventures Research, https://outlierventures.io/wp-content/uploads/2018/11/Blockchain-Enabled-Convergence-Whitepaper.pdf, accessed on 17/03/2020.

  33. 33.

    Brussels, 19.2.2020 COM(2020) 66 final COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS, A European strategy for data.

  34. 34.

    ‘Decentralised Data for Dubai Report’, published on 19 May 2019. https://www.smartdubai.ae/newsroom/news/decentralised-data-for-dubai-report, accessed on 17/03/2020.

  35. 35.

    https://outlierventures.io/research/the-convergence-stack/, accessed on 17/03/2020.

  36. 36.

    Ibid.

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  1. St. Antony’s College, University of Oxford, Oxford, UK

    Pēteris Zilgalvis

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Correspondence to Pēteris Zilgalvis .

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  1. European Parliament, Bruxelles, Belgium

    Eva Kaili

  2. European Parliament, Bruxelles, Belgium

    Dimitrios Psarrakis

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Zilgalvis, P. (2021). The Political Economy of the Blockchain. In: Kaili, E., Psarrakis, D. (eds) Disintermediation Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-65781-9_11

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  • DOI: https://doi.org/10.1007/978-3-030-65781-9_11

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