The challenge
Defining blockchain and its risks and opportunities
Blockchain is a form of distributed ledger technology (DLT) that connects different parties over the internet to provide a secure and trustworthy record of their transactions (both financial and non-financial), without giving control to a third party.
On blockchains, you can prove where information has come from and gone to, which means it has the potential to open up new economic activity in areas such as financial services, regtech, supply chains and government registries.
Our response
Two reports: long term scenarios and immediate technical applications
Funded under the National Innovation and Science Agenda, we have delivered two reports that examine the risks and opportunities of blockchain technology in Australia.
The first report, Distributed Ledgers: Scenarios for the Australian economy over the coming decades, explores four plausible adoption scenarios of blockchain technology in Australian in 2030. This approach includes scenarios that are aspirational and transformative, establish a new equilibrium and represent collapse.
The second report, Risks and opportunities for systems using blockchain and smart contracts, selects three use cases to examine how blockchain systems can support new markets and business models. These include: agricultural supply chains, government registries and remittance payments.
We identified the following benefits for businesses and government.
Business
Since they remove the need for a third party, blockchains can reduce the number of stakeholders involved in a transaction therefore reducing cost and saving time. Blockchains can also enable better information sharing and better business processes, giving stakeholders more confidence and reducing cost and risk.
Government
Blockchain can be used as a common reference point to bring together different levels of government (local, state and federal) to host government registries of open data.
This may mean more reliable integration across government services, improved mobility and business consistency across states and better regulatory oversight when blockchains record operational information in regulated industries.
The results
More informed decision-making
While we can't paint a full picture of all the opportunities for blockchain technology at present, a number of initial recommendations are evident. Blockchain is continually being explored globally by governments, enterprises and the start up ecosystem.
Our recommendations in the report include:
- Increase research and development (R&D) on trustworthy blockchains
- Test blockchains for 'rainy day scenarios'
- Scrutinise technology-specific risks for new systems
- Provide indicative guidance on sufficient evidence for regulatory acceptance of blockchain-based system
- Inform regulators and businesses about the typical technical risks and limitations of blockchain technologies
- Implement technologically-neutral regulation and policy.
Download the reports
- Distributed Ledgers: Scenarios for the Australian economy over the coming decades [pdf · 2mb]
- HTML-version of Distributed Ledgers: Scenarios for the Australian economy over the coming decades [html · 1mb]
- Risks and opportunities for systems using blockchain and smart contracts [pdf · 1mb]
- HTML-version of Risks and opportunities for systems using blockchain and smart contracts [html · 1mb]
US Versions