Bretton Woods 2015 White Paper Explores Bitcoin And Blockchain Technology

At the recent North American Bitcoin Conference in Miami, the US think-tank Consumers’ Research released the Bretton Woods White Paper that discussed in detail Bitcoin and its underlying blockchain technology. Research executive director Joe Colangelo released the 85-page report.

“This paper identifies and explains the opportunities presented by blockchain technologies, the challenges faced by those opportunities, and potential ways to address those challenges” –Bretton Woods White Paper

The paper gives a detailed description of the various stages of evolution of the blockchain:

• Blockchain 1.0 that refers to the underlying technology platform (i.e. the blockchain - mining, hashing, and the public ledger), the overlying protocol (i.e. transaction enabling software), and the digital currency (i.e. bitcoin or other digital tokens/coins) which represent a store of value as well as provide value to the protocol itself.
• Blockchain 2.0 refers to the broad spectrum of economic and financial applications that exist beyond simple payments, transfers, and transactions. Such applications include traditional banking instruments such as loans and mortgages, complex financial market instruments such as stocks, bonds, futures, derivatives, as well as legal instruments such as titles, contracts, and other assets and property that can be monetized
• Blockchain 3.0 refers to vast array of applications that do not involve money, currency, commerce, financial markets, or other economic activity. Such applications include art, health, science, identity, governance, education, public goods, and various aspects of culture and communication.

According to the report, the goals of blockchain technology include improving efficiency; consumer choice, access, privacy, & protection; transparency; self-governance and human empowerment.

“2015 became the “Year of the Blockchain” when legacy institutions such as banks and regulatory agencies began to understand the potential of the distributed ledger. As a result, the funding and enthusiasm has turned from new startups to well-established entities. Companies such as Citi, Visa, Discover, MasterCard, and PayPal have set up “innovation labs” to try to understand and harness the power of the blockchain to modernize their own systems. In 2016, we can expect to see a bevy of new products, services, and price points as a result”, the paper said.

The report further says that the use of bitcoin as money is at present the “most prolific” use of blockchain. It has the potential to solve the need to trust financial institutions to remain solvent – because Bitcoin’s record of transactions is public, an institution can perform a proof-of-assets audit in open view of the public.

The report noted that as the Bitcoin protocol operates on a distributed network of more than 8000 (currently) independently operated notes, hacking the system becomes more difficult. The Bitcoin network enables simplified consumer to consumer transactions, low cost consumer to business transactions and international remittances.

However, the threat of hacking and use of bitcoin for illegal activities have increased the need for regulations, such as Anti-Money-Laundering (AML) and Know-Your-Customer (KYC) regulations, in this sector.

The paper recommends that “Bitcoin companies should work to develop technological solutions that overcome the issues intended to be fixed through regulations and provide education for regulators on these solutions.”

It emphasizes that law enforcement will never drive criminals entirely off the blockchain. However, by helping law enforcement continue to advance along its learning curve and helping address government concerns about this technology, the Bitcoin ecosystem participants can help make the blockchain more secure and deter its use for unlawful purposes, which in turn will enable this "transformative" technology to reach its full potential.