CHALLENGES AND OPPORTUNITIES OF BLOCKCHAIN TECHNOLOGY REGULATION

Abstract

Accelerated technological development has brought many novelties, among which is distributed ledger technology (DLT), often called blockchain (BC). BC is perceived as a peer-to-peer distributed immutable ledger that could revolutionize economies, societies and even our daily lives. All protocols for dealing with data and transactions are coded with an algorithm, so there is no need to trust the other contracting party or the intermediary. With the concept of decentralization and the absence of hierarchy, BC wants to avoid all traditional intermediaries and any regulation. The question arises, are BCtechnologies really decentralized and who controls them? What are the consequences if decision-making in BC is influenced by small groups of people or corporations? This article, in an attempt to answer these questions, explores technological scandals in which there have been significant deviations from the basic principles of BC (The DAO Hack, Parity's Smart Contract Bug on Ethereum and Facebook's Libra). Analysis of the above scandals suggests that decentralization is threatened and the current regulatory status of BC is substandard. It was shown that BC technology, due to its deterministic nature, cannot provide solutions for all life situations and that human judgment is irreplaceable.