Demystifying blockchain. Technical shortcomings, common assumptions and regulation challenges : a critical perspective

Treball de Fi de Grau en Dret. Curs 2018-2019Tutora: Esther Farnós i AmorósA paper published by the pseudonymous Satoshi Nakamoto back in 2008 brought forward the idea of applying pre-existing technologies in innovative ways to create what is known as blockchain. Since then, blockchains have exploded in popularity both regarding the variety of its applications and the amount of value moved in its transactions. The aim of this work is to shed light on blockchain technology and the challenge of regulating it. We will seek to achieve that by exhaustively explaining how it works while signalling the limitations and problems arising from the technologies involved; followed by a critical analysis of common misunderstandings regarding what blockchains can really do. Specifically, we will argue against their supposedly precluding all intervention from a central authority and erasing the need for trust. This much needed perspective will allow us to assess current regulation regarding data protection and protection of assets within blockchains and how it fails to strike the right balance between the policy concerns of user protection and innovation. We will discuss regulation alternatives from a comparative perspective and draw general regulation guidelines