ICLE Affiliate Thibault Schrepel, published in TechCrunch on blockchain in antitrust
Thibault Schrepel recently published an article in TechCrunch arguing that antitrust agencies should embrace the technology behind cryptocurrencies:
While statements and position papers from most central banks were generally skeptical of cryptocurrencies, the times may be changing.
Earlier this year, the Federal Reserve of Saint Louis published a study that relates the positive effects of cryptocurrencies for privacy protection.
Even with the precipitous decline in value of Bitcoin, Ethereum and other currencies, the Federal Reserve author emphasized the new competitive offering these currencies created exactly because of the way they function, and accordingly, why they are here to stay.
And antitrust authorities should welcome cryptocurrencies and blockchain technologies for the same reason.
Fact: cryptocurrencies are good for (legitimate) privacy protection
In the July article from Federal Reserve research fellow Charles M. Kahn, cryptocurrencies were held up as an exemplar of a degree of privacy protection that not even the central banks can provide to customers.
Kahn further stressed that “privacy in payments is desired not just for illegal transactions, but also for protection from malfeasance or negligence by counterparties or by the payments system provider itself.”
The act of payment engages the liability of the person who makes it. As a consequence, parties insert numerous contractual clauses to limit their liability. This creates a real issue due to the fact that some “parties to the transaction are no longer able to support the lawyers’ fees necessary to uphold the arrangement.” Smart contracts may address this issue by automating conflict resolution, but for anyone who doesn’t have access to them, crypto-currencies solve the problem differently. They make it possible to make a transaction without revealing your identity.
Above all, crypto-currencies are a reaction to fears of privacy invasion, whether by governments or big companies, according to Kahn. And indeed, following Cambridge Analytica and fake news revelations, we are hearing more and more opinions expressing concerns. The General Data Protection Regulation is set to protect private citizens, but in practice, “more and more individuals will turn to payments technologies for privacy protection in specific transactions.” In this regard, cryptocurrencies provide an alternative solution that competes directly with what the market currently offers.