One of the greatest potential benefits of Distributed Ledger Technology (DLT) is its ability to remove barriers and friction in the market and enable the creation of new forms of information marketplaces. The sharing of information between economic entities through distributed ledgers would enable new forms of innovation to emerge. This would allow ministers to achieve policy outcomes centred on assisting SMEs achieve economic growth through effective use of technological innovation.
Reducing transaction costs for SMEs when dealing with the local and national government would enable these businesses to move more freely within the market and face lower overall operating costs. At the same time, enabling these companies to register their intellectual property (IP) within a distributed ledger, rather than through traditional patent applications, may reduce the overall number of contract disputes. Contract disputes make up 57% of all litigation in the UK, more than any other category of legal action.
DLTs could be applied in a broad variety of areas, particularly in smart contracts and asset registration. By registering assets on a distributed ledger, all property could effectively become ‘smart assets’, providing a robust and trustworthy proof of record for a broad variety of services that currently cost SMEs time and money. Examples include registering IP and patents, wills, notary services, NHS health data and SIPPs/Pensions. Distributed ledgers offer a new way to coordinate these types of services, in a truly digitally-enabled manner, with scale and efficiency.
Distributed ledgers have the ability to handle micropayments, decentralised exchange, token earning and spending, and transfers in a way that the web currently does not8. As a result, DLT has the potential to re-invent the operating costs of local jurisdictions and businesses through
• Business licencing
• Taxation management at many municipal and regulatory levels
• Pension data
It is possible that DLTs could help to completely remove some functions, as companies are able to register identities not just for their businesses, but also for their assets. More importantly, citizens can also have more control over their data assets (such as health data), which are traditionally held by the government. This would enable citizens to check whether their data has been accessed and used
in the correct manner for the correct reasons. In addition, the use of distributed ledgers allows for sharing of data across new forms of information marketplaces — or possibly even data utilities — allowing for the sharing of pension data.
• Reduced transaction costs for SMEs and streamlined cost of operations for the local and national government. Additionally, having a trustworthy proof of ownership for digital assets such as IP will reduce the options for litigation, providing an overall social benefit for UK society.
• Requires local and national authorities to adopt DLTs