Blockchain Technology in Cyprus
Blockchain does not mean cryptocurrency
Tech experts are closely monitoring the technology behind the growth of cryptocurrencies or “icoins” such as bitcoin, evercoin and nagacoin. In simple terms blockchain technology is essentially a computer software structure consisting of blocks of information with the ability to run simultaneously on multiple devices. Thus achieving transparency, safety and accountability in all transactions entered into it. The security of data and its many uses is at the forefront of concerns, and blockchain technology offers many solutions in this respect.
Essentially, blockchain is a dependable and certifiable record of transactions or processes where no changes can be made, nor cancellations can occur without creating a new record and it can endure any form of digital attack as each block of information is encrypted individually.
How can blockchain be applied?
Cyprus is a well-known , European financial center partly due to its strategic geographical position and partly due to its beneficial taxation system. Nevertheless it is making leaps in developing blockchain technology and educating users on its possible uses across many industries.
Firms in Cyprus are already testing blockchain technologies to simplify the process of collecting, examining and integrating information as well as to systematize audit tests in cryptocurrency business transactions.
Towards the end of 2017, the Cypriot Securities and Exchange Commission (“CySEC”), announced that it has officially commenced testing the use of blockchain technology and evaluating its benefits in verifying the compliance of its supervised entities, particularly in Over The Counter (“OTC”) transactions. This development ties in with the noted dominance of blockchain technology in the financial technology sector, and the manner in which transactions will be verified in years to come.
Many other governmental organisations are evaluating the application of blockchain technology in their departments, to enhance transparency and accountability within the public system.
What does the future of blockchain hold?
At a recent presentation held at the Hilton Nicosia, Mr. Andreas Polemitis Teaching Fellow of Digital Currency at the University of Nicosia the number one university worldwide in blockchain technology and bitcoin, mentioned that ‘we are now at the beginning of the beginning of blockchain technology” drawing in parallels with the 1990s and the dawn of internet.
While the origin of the technology is not new, the way the technology is applied block by block, user by user, is a rather new concept carrying with it inherent governance issues. It is for this reason that experts anticipate the growth of private blockchains over the next decade that will replace intermediary functions so that governance issues on verification of processes and access controls will be resolved among members of the same private blockchain.
In addition to the financial services sector, the health sector has much to gain by applying blockchain technology. As mentioned in the Deloitte US analysis entitled Blockchain for health, “Blockchain technology has the potential to transform health care, placing the patient at the center of the health care ecosystem and increasing the security, privacy, and interoperability of health data. This technology could provide a new model for health information exchanges (HIE) by making electronic medical records more efficient, disintermediated, and secure.”
Last but not least, and perhaps rather inevitably, blockchain technology is expected to propel states and governments towards cashless transactions achieving, as leading expert and successful entrepreneur Yasin Sebastian Qureshi mentioned at the May ICOIN Summit in Limassol, “financial inclusion”. Transactions using cryptocurrencies carry several risks most of which are a by-product of the fact that blockchain is developing outside regulatory frameworks. At the same time lack of stringent regulation may also be the contributing factor in the growth of Initial Coin Offerings (“ICO”s), that is crowdfunding through the sale of cryptosecured blockchain tokens aimed at funding the development of blockchain projects. It is further anticipated that this form of raising digital currency will replace venture capital funding for start-ups.
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