PANews reported on December 1 that according to Ledger Insights, the European Union has released a report exploring the potential of permissionless blockchain in traditional finance (TradFi). The report believes that permissionless blockchain should at least be considered as an option for traditional finance and financial market infrastructure. However, its adoption should be done with caution.
Author Fabian Schär argues that permissionless blockchains are more neutral than private blockchains, thus encouraging competition. The unfettered access enabled by public blockchains contrasts sharply with the isolated permissioned blockchains that are proliferating. While public blockchains have shortcomings, there are many well-known workarounds to address their challenges, particularly by adding permissions at the smart contract level.
The EU report doesn’t gloss over the shortcomings of public blockchains, such as scalability, privacy, finality, and governance. It explores each topic in depth, as well as the controversial Maximum Extractable Value (MEV) issue, in which block proposers sometimes reorder transactions at the expense of blockchain users, a form of front-running.
