Finland – Bitcoin’s economic system has been described as “revolutionary” by researchers at Finland’s central bank.
In a new staff paper published on the 5th of September, it was revealed by economists at the bank that the bitcoin blockchain technology is a “monopoly run by a protocol”. This conclusion was reached after months of investigations into the workings of bitcoin’s infrastructure as well as a probing of the technology that backs the blockchain.
The three authors of the paper, Gur Huberman, Ciamac Moallemi and Jacob Leshno are of the view that the modus operandi of the bitcoin blockchain offers it a degree of protection against manipulations by unscrupulous persons or programs due to its protocol layer dynamics.
“Bitcoin is a monopoly run by a protocol, not by a managing organization. Familiar monopolies are run by managing organizations with discretion to determine and then change prices, offerings and rules. Monopolies are often regulated to prevent or at least mitigate their abuse of power”
The paper also further states that because of this state of affairs, the bitcoin technology “cannot be regulated”.
“Bitcoin cannot be regulated. There is no need to regulate it because as a system it is committed to the protocol as is and the transaction fees it charges the users are determined by the users independently of the miners’ efforts.” The authors said.
Even though the document itself mentions that the views espoused there-in does not represent the official stance of the Bank of Finland, the publication is however a notable one due to the fact that the Bank has been largely involved with tech over the period.
The bank organized a seminar on blockchain last year and participants comprised blockchain companies, regulators and local academics in an effort to lend support to local research and efforts. The Finnish city of Kouvola for example received 2.4 Million Euros to test-run a blockchain –powered shipping system.
The authors of the paper concluded by advocating for additional research by more academics into the blockchain technology space.
“Bitcoin’s apparent functionality and usefulness should further encourage economists to study this marvelous structure.” they concluded.