Scotland – Europe’s Blockchain Capital

The objective of our Digital Nation Action Plan is to identify the individual entrepreneurs visions for how to achieve a world leading Scottish digital nation, and aggregate these into one overall action plan.

On The Crypto Standard podcast they interview Nick Jones of Zumo, exploring the details of their exciting venture pioneering a cryptocurrency payments app.

Concluding the interview Jordan highlights how Wyoming is becoming a crypto and blockchain global hub, and asks if Scotland could replicate a similar success.

Nick believes this is entirely doable, given how Scotland is a small, relatively cash rich country with highly educated people, and with many pressing social inequality issues to address could act as an incredible ‘sandbox’ for cultivating innovative applications of the technology that leverage Scotland’s deep legacy of financial expertise.

To crystallize a strategy to unify Scotland’s many different initiatives and assets around a single vision of making Scotland the Blockchain Capital of Europe, Nick quantifies the end result through stating key metrics such as having 10 of the top 50 startups, three relevant university courses and a £500m venture fund for supporting the ecosystem.

“Weak on Blockchain”

The nature of the challenge is very succinctly captured by Andrew Noble of Par Equity in this TechCrunch artlcle. While reporting on the general success of Scotland’s startup scene in his analysis he comments that Scotland is “weak on Blockchain”.

He’s not wrong. Scotland has a handful of great Blockchain startups like Zumo, Siccar and Appii, but to Nick’s point we’re well short of how many there should be, there’s no real funding initiatives to address this and adoption in key ‘big lever’ sectors like Government is non existent. Therefore the essence of our Action Plan should be to address exactly this.

A keystone foundation is regulation and legislation, the right approach could either inhibit innovation or unlock an unparalleled scale of economic growth. As Coindesk reports a new German law could theoretically bring as much as €350 billion (~$425 billion) of institutional investment into their cryptocurrency market.

In this blog Bill Buchanan describes how countries should legislate a Blockchain Act, emulating pioneers like Liechtenstein, providing the legal framework to truly achieve a wholly digital nation.

The Tokenization of Everything

Legislation is a slow moving process outwith our control, so the second, more important foundation is simply to drive large scale adoption, an effect that can be characterized as “The Tokenization of Everything”.

Despite our claims of living in a digital society the reality is that so much of our economy is still paper-based, from mortgages to opening a bank account requiring the endless shuffling of paper and the centuries old practice of ‘wet’ signatures or what Bill describes as ‘fake digital’, the practice of visually emulating these via tools like Docusign. Instead he defines that:

“We need to move into a world which properly replaces paper, and moves towards crypto-assets and digital signing with private keys.”

The digitization of all documents and processes via the Blockchain would give rise to what Bill describes as ‘The Token Economy’:

“But some countries are now defining the required legal infrastructure around blockchain, and finding ways to integrate into their existing legal frameworks, and also provided increased trust in the new economy — the token economy.” 

and that

“The key requirement is for national regulation infrastructure and which builds on a total anonymous distributed ledger infrastructure, as well as mapping trusted identities into a regulation infrastructure.”

Demonstrating the potential Scotland has to not only adopt but also pioneer this massive trend is local startup Blockchain Technology Partners, who specializes in the ‘smart contracts’ that Bill defines as the linchpin to this new digital universe. They also envisage the complete digitization of all facets of our economy, describing ‘The Tokenization of Everything‘.

As the title suggests this refers to an evolution where every asset with inherent value will eventually be represented by a cryptographic token on a Blockchain.

Scaling Scotland’s Blockchain Ecosystem

Nick offers an ideal starting point for a Digital Nation Action Plan – A big audacious ambition and clear metrics for quantifying when it is achieved.

By incorporating the equivalent views from other Scottish tech entrepreneurs we can refine a detailed strategy and set of steps for truly realizing the goal of building a world leading Scottish digital nation.

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