Regulations in Blockchain
By: Sanket Kumar Mishra
Tags: Blockchain, Regulation, Cryptocurrency, Bitcoin, Government

A blockchain (or distributed ledger) is a peer-to-peer distributed and public (or private/permissioned) immutable ledger that maintains a record of all transactions occurring on the ledger. Such records are saved in a chain of units called blocks. In most blockchains, each new block contains cryptographically hashed data and is built upon the previous block in the chain, enabling the data in the blockchain to be trustworthy. Blockchain technology enables the decentralization of the movement and management of data and digital representations of assets or other value. More specifically, due to the distributed nature of a blockchain and its ability to enable trustable transactions between computers through its distributed consensus mechanism, blockchain technology enables the authentication and settlement of transactions without centralized intermediaries or authorities.

Cryptocurrencies are the most famous applications of the promising blockchain technology, and these disintermediated digital currencies have put significant power in the hands of the people. However, the central banks, regulators, and governments around the world aren’t always equally enthused about crypto assets.Around the world, the legal status of cryptocurrencies, and the regulatory framework around them varies. Since blockchain is the underlying technology, the regulatory status of cryptocurrencies in a country also has a direct bearing on the progress of the technology there.

Why regulations are important?

In recent years, with the uncontrolled evolution of the internet and all its applications, the main objective of governments around the world has been to protect consumers and businesses against the poor management of sensitive information. However, this just scratches the surface of something even more complicated. In the early years of the internet, we did not need any particular regulations to create an online market, to sell or buy products or play online. Every ‘online’ activity reflected another one already performed in the real world and, thus, already subject to regulation.Nevertheless, the internet has evolved, and a growing number of activities done via the web and technology do not have an exact reflection in the real world. Technology is growing more independent, and the goal of these new inventions, as Ivan Illich explored in his book,Tools for Conviviality, in 1973, was to make men more self-sufficient, more liberated, more suited to satisfying their own particular goals. At first, it was important to configure apparatuses (advances, establishments, connections) for the administration of man, instruments fit for freeing human potential and inventiveness. They partitioned men into masters and slaves, experts and slave.

If the technologies around us are designed to channel our actions toward certain limited behaviours which can be measured and then analysed, managed and transformed into future consumption forecasts, then our contractual power over these technologies is very low, and our efforts, our ‘individual response,’ the attempt to resist the manifold possibilities provided by technologies is weak or irrelevant.

Some of us will also be able to find the right personal balance between the benefits of digital technologies and the time they take from other more social activities, but these attempts will only be exceptions .For these reasons, should we allow the evolution of technology to remain totally independent? Or should the states take an active role in that evolution and regulate its processes? Technology is not supplementary to our lives anymore. We are becoming an essential part in its development. This independence, and growing dependence, will become the main problem facing regulators in the near future.

Who should be the right authority to enforce such regulations?

Governments can attempt to impose regulation on a currency or the entire industry, such as tax reporting rules or prohibitions on using digital currencies for certain transactions. But, it is difficult to enforce laws concerning a mechanism that is decentralised and redundant. Currencies are most important aspect of an economy. These are regulated by Central finance corporation and government . So every transaction I getting recorded on bank server on that you pay some charges for using the services and government too have access to your data .That is basically a regulation.

Now the problem arises that if people are transacting through Bitcoin this is getting recorded in public ledger or block chain if you called ,But government and banks are not involved so you don’t have to pay charges .However when you transfer Bitcoin or other Cryptocurrency you pay a little charge to mining computers who are processing your transaction.

Where is the problem

Suppose if all the money is replaced by Cryptocurrency, All the banks will bankrupt and government will no longer making any income through it.

That’s why China and Russia already have a plan to launch Cryptocurrency. Already Ripple is the only Cryptocurrency which is centralised by many of UK banks.

So basically all that comes to an end , Governments will be in deep problem if people will start using Bitcoins and other currencies there would be no PayPal and Western Union in the world.

Indeed Cryptocurrencies are in the beginning stage as the email was in the beginning of Internet. But it would be amazing to see how governments will come up with regulations and how big financial institution will compete with Bitcoin and Ethereum.

No can can or does regulate enforce regulations. Although there are ways to trace a transaction or punish a user, the lack of any nexus or controller means that it is impossible to stop a transaction.

Regulations all around the world