The blockchain system is far less vulnerable to hacking and corruption than current systems; It's a game changer and Canada wants to be a world leader in its development
OTTAWA—An emerging technology has caught the eye of the innovation-obsessed federal government—a platform so packed with potential, many experts believe it could comprise the foundation for the next generation of the Internet.
Blockchain, as it’s known, holds a vast amount of promise for transforming business sectors and the lives of ordinary people around the world, although some say it’s too early to say how broad the technology’s reach could be.
Like a giant digital bulletin board, blockchain creates an online ledger or database where records—financial transactions, for instance—can be shared, moved and maintained on a transparent network, all without compromising security.
With such activities available to be seen by a blockchain’s many collaborators, the system is inherently secure, making it far less vulnerable to tampering, hacking and corruption than current systems, which depend on information being managed by intermediaries.
Experts say Canada has shown considerable potential in these early days of blockchain—and they believe it’s key for the country to help create conditions to keep the momentum going.
Ottawa has taken notice; widening the path for more blockchain development would fit nicely with the Trudeau government’s stated goal of increasing innovation as a way to help jump-start Canada’s lacklustre economy.
In December, senior government officials, including then-international trade minister Chrystia Freeland, met to discuss the concept with executives from companies, big banks, regulators and the tech sector.
The attendees at the meeting explored the feasibility of Canada becoming a global hub for the blockchain “revolution,” according to the agenda.
“Basically, blockchain technology represents nothing short of the second generation of the Internet,” said Alex Tapscott, who co-hosted the roundtable.
Tapscott, CEO of blockchain advisory firm Northwest Passage Ventures, believes the technology represents a potential foundation for an innovation economy in Canada, and could prove instrumental in sparking a new industrial revolution.
Blockchain is the technology behind bitcoin, a digital currency without links to governments or banks, enabling people to engage in anonymous online transactions without the need for intermediaries.
Its possibilities stretch far beyond cutting out the middleman in financial transactions, which often create higher costs for users and extra delays from processing times.
They range from improving the efficiency of government services, to developing robust electronic-voting systems, to building reliable land-registry systems. It can also slash costs for international cash transfers and keep personal data out of the hands of profiteering third parties.
Some believe blockchain will have the power to counter inequality and help deliver more prosperity to poorer parts of the world.
Federal departments are in the process of working to understand the concept and are at the early stages of creating policies around it, particularly in areas such as privacy, banking and cybersecurity, said one government source who spoke on condition of anonymity.
Canada is ranked third in the world behind the United States and the United Kingdom when it comes to blockchain startups, said the source, who wasn’t authorized to discuss the matter publicly.
The Bank of Canada has promoted its efforts to study the technology in collaboration with big banks, Payments Canada and the financial innovation company R3 Lab and Research Centre.
“By some weird accident, Canada and Toronto have actually emerged already as one of the leading areas in the world in blockchain innovation,” said Tapscott, who co-authored a book with his father Don entitled “Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World.”
“But that lead won’t last unless we can get everybody working off of the same plan sheet and driving in the same direction.”
Jeremy Clark, a blockchain expert from Montreal’s Concordia University, said regulators can help the technology expand in Canada—something he believes would lift economic growth.
“The more these bodies can do to sort of pave the road, I think that would give Canada an edge over other countries,” said Clark, who has closely studied how blockchain can be used in electronic voting systems.
“Canada can be a leader. Will it be the world leader? I’m not sure. I think the U.S. probably has us beat, but absolutely Canada can be one of the top-5 countries developing blockchain technologies.”