Blockchain is a new Internet: let’s seize this opportunity!
After the internet, it is now the blockchain that is the center of attention, with its share of praise and reservations. Contrary to popular belief, its applications far exceed cryptocurrencies.
In the late 1990s, economist Paul Krugman mistakenly claimed that the Internet would not have more impact than faxes, or that social networks would have no success because “most people have nothing to say to each other”…
After the Internet, it is now the blockchain that is the focus of attention, with its share of praise and of reserves. Yet this technology heralds an economic, social and political revolution as powerful as the Internet. Contrary to popular belief, its applications go far beyond cryptocurrencies. It promises to transform the exchange of financial flows, energy, goods, data… and to participate in the transition from a vertical and rigid economy to a horizontal and collaborative economy.
France and Europe must take hold of a technological revolution which has already started and which will continue to grow throughout the world. The quality of French and European engineers and the marked interest of large industrial companies for blockchain are all assets in making France and Europe the stronghold of this technology.
Why blockchain is the “second Internet revolution”?
The Internet’s ability to transfer information instantly has made it a revolutionary instrument. But why consider blockchain to be as revolutionary as the Internet? Because it introduces a new concept: digital scarcity. On the Internet, a shared document, or a transferred e-mail, is only a copy that can be duplicated ad infinitum, while the blockchain allows a transaction to be carried out (currencies, shares, commodities, etc.) without that it be duplicated. This technology certifies that A sends data to B, that B has received it and that A no longer has it, and all this without an intermediary.
The blockchain preserves the digital scarcity of a data, and therefore its value, which cannot be duplicated in essence. It is to data what the Internet is to information.
A technology that opens up vast fields of possibilities for France and Europe.
All industries are concerned by this “Internet of value”. It allows peer-to-peer digital assets to be transferred (currencies, securities, votes, shares, commodities, etc.), to trace data (products, goods, financial assets, etc.) and to automatically manage contracts of all kinds ( insurance, programmable payments, etc.). Its effects will spread across sectors, from the world of finance to industry, renewable energy, and even the state.
For businesses, blockchain is fundamentally changing the way they trade, use and share their data. For users, it offers control over their data and challenges the model of an Internet dominated by digital giants who monetize our personal data and capture a significant share of profits. The blockchain faces this logic, gives the Internet its initial philosophy, horizontal and collaborative, where users control their data and share it freely.
In France as in Europe, two challenges persist: investments and regulation.
The recent initiatives of large companies such as Thales, LVMH, Renault, Carrefour, Société Générale… illustrate that awareness of the advantages of blockchain has only just begun. A digital euro could also be launched by the ECB within the next two years, with a potentially positive impact on the euro area economy. Blockchain is not only a new technological instrument, but also a tool in favor of European digital and financial sovereignty.
However, two challenges persist that must be addressed very quickly.
The first challenge is financial. France and Europe are far behind compared to the United States. Blockchain venture capital funds have 20 times less assets in Europe than across the Atlantic. There is reportedly at least $ 2 billion in assets under management in the United States, and around $ 100 million in Europe. European blockchain start-ups find it difficult to finance themselves, and even successful ones receive on average four times less capital in Europe than in the United States.
The second challenge is political. The French government must continue to support initiatives which show that this technology is an instrument for our industrial competitiveness, our economic attractiveness and our digital and financial sovereignty. Such signs will encourage entrepreneurs to take risks and investors to pay more attention to a sector of the future.
France and Europe cannot afford to miss a revolution technology which will be the basis of the “data economy”. Our territories must become fertile grounds where future blockchain unicorns will develop without constraints. This is a chance to adapt our economy to the digital world that is coming.
We have missed out on the first internet revolution. Nothing predisposes us to miss the second.
Tribune co-written by Jean-Marc Puel, co-founder of LeadBlock Partners and Jean-Michel Mis, deputy for Loire-Saint-Etienne and member of the National Digital Council.