UK Finance Minister Suggests Blockchain Solution for Borders: Controversy Ensues

What could have been an off-the-cuff remark from the UK current financial minister has caused quite a stir. Philip Hammond told the Conservative Party conference that blockchain could be the solution to the border issues surrounding Brexit and Ireland.

Mr. Hammond was quoted as saying, “There is technology becoming available (…) I don’t claim to be an expert on it but the most obvious technology is blockchain (for managing the Irish border).” This somewhat enigmatic statement has left many wondering if the Finance Minister has something blockchain related up his sleeve. Others have been critical of blockchain’s ability to smooth over border issues, both in Ireland, and internationally.

There is no doubt that the UK is facing some difficult questions when it comes to their borders in a post-Brexit world. The Irish border is especially touchy, as any sort of “hard-border” would require a heightened level of security. High security borders within Ireland isn’t politically tenable, as it would bring up some of the issues that Ireland has moved past.

Some Think Philip Hammond is Flat Wrong

According to Vili Lehdonvirta, who is an associate professor as well as a senior research fellow at the University of Oxford, blockchain is a non-starter for border solutions. He told Cointelegraph that, “In my assessment there is zero chance that blockchain technology will help deliver a ‘frictionless’ border between Northern and the Republic of Ireland.”

Mr. Lehdonvirta took a harsh stance towards Philip Hammond’s idea, saying that,

“Blockchain has become this magical buzzword that people like Philip Hammond who don’t know what they’re talking about are pinning all kinds of hopes and dreams on. I think the onus is on the proponents to explain how blockchain tech could possibly help here. For starters, we would need to know what exactly is meant by “blockchain” here. If it means a Bitcoin-style peer-to-peer proof-of-work system, then obviously throughput and latency will be big issues, against what expected benefit?”

To Mr. Hammond’s credit, he did admit that he knew little of how blockchain works, which would suggest that he doesn’t have a firm plan in place for blockchain-based Brexit border solutions. Proof-of-work systems probably a viable solution for a public border control system, as they rely on sometimes expensive and slow transactions to function. Both Bitcoin and Ethereum struggle to deliver more than 20 transactions per second, which would be far to slow for a busy border.

Private Blockchains Aren’t Groundbreaking?

Vili Lehdonvirta was clearly not impressed by Philip Hammond’s blockchain ideas. But he also doesn’t see permissioned blockchains as being anything special either. In regards to using blockchain on a UK border, Mr. Lehdonvirta said that, “If it means IBM-style permissioned blockchain, then that’s essentially just a shared database, nothing particularly groundbreaking about that.”

The idea that private blockchains don’t bring something new to the table may be off the mark. There is certainly no real world use-case scenarios to show that a private blockchain would be a good fit for a border, but numerous other applications do suggest that blockchain would make a fine system for border control, at least as a pilot project.

IBM’s blockchain architecture has been used for numerous applications that existing technology didn’t have the ability to handle. The latest collaboration between IBM and Walmart is evidence of this, but there are many other blockchain projects that would challenge Mr. Lehdonvirta’s opinion as well.

The Chief Analyst for GlobalData’s Technology Thematic Research Program, Gary Barnett, was also negative on blockchain as a solution for the UK border. He was quoted as saying. “Blockchain technology is not well suited to the processing of cross border trade. It is expensive, complex, and slow.” This assertions is also easily challenged, as blockchain has shown itself to be a much more efficient way to do any number of things, especially at-scale.

Today the biggest problem that blockchain faces in terms of widespread adoption isn’t technical. There is a tremendous amount of creative thinking in the blockchain development space, but in the public sphere, there seems to be significant fear when it comes to supporting the development of blockchain-based platforms.

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