News from the EU Blockchain Observatory & Forum

1. How does the EU spur
blockchain applications?
Crypto Valley Conference
June 26, 2019
Tom Lyons
Report Manager, EU Blockchain Observatory & Forum
Executive Director, ConsenSys Solutions, Switzerland

2. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
• Common political vision (EU-Member States)
• EU Blockchain Observatory & Forum
• European Blockchain Partnership / European Blockchain Services Infrastructure
• Investing in EU research, innovation and start-ups
• International Association of Trusted Blockchain Applications
• Convergence - Hot off the press!
The EU wants to establish global leadership in
blockchain and DLT
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3. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
European Parliament Resolution
October 3, 2018
"The EP calls on the EU
Commission to propose a
regulatory approach designed to
promote different uses of
blockchains and other
Distributed Ledger
Technologies (DLTs) that is
innovation-friendly and
technology neutral"
Driving force = Eva Kaili, MEP
They seem to mean it
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Mariya Gabriel, Commissioner for
Digital Economy and Society
“I see blockchain as a game
changer and I want Europe to
be at the forefront of its
development. We need to
establish the right enabling
environment - a Digital Single
Market for blockchain so that
all citizens can benefit, instead
of a patchwork of initiatives.”
Roberto Viola, European
Commission Director General for
Communications Networks, Content
and Technology
“Over the last few years we
have worked to develop a truly
digital single market for the
European Union. ... Blockchain
and other Distributed Ledger
Technologies are an important
part of this puzzle.”

4. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
Themes - European Parliament Resolution
http://www.europarl.europa.eu/doceo/document/TA-8-2018-0373_EN.html?redirect
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● DLT, decentralisation and applications = profound impact,
citizen empowerment, decentralised data, efficiency, trust
● Energy- and environment-friendly applications
● Transport/Mobility
● Healthcare sector
● Supply chains
● Education
● Creative industries and copyright
● Financial sector
● Self-sovereignty, identity and trust = user control of data
● Smart contracts = key enabler
● Interoperability, standardisation and scalability
● Infrastructure security
● Strategic importance for public infrastructure = use by
government agencies
● SMEs, tech transfer and financing = lower entry barriers
● Policies = tech neutral; “should not regulate DLT per se,
but should try to remove existing barriers to implementing
blockchains”

5. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
EU Blockchain Observatory & Forum:
2 year initiative launched in February 2018
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An Observatory and
a Forum, an online
and offline community,
a map of 660+ projects,
EU-wide workshops,
thematic reports,
blockchain
trainings

6. © 2018 ConsenSys - Confidential
EU Blockchain Observatory & Forum: Objectives
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Create a Knowledge Repository
About blockchain technology and
blockchain initiatives around the world,
including Education materials
Identify Framework Conditions
Suitable to accelerate blockchain
innovation across the European Union in
the context of a Digital Single Market
Prioritize Use Cases
Especially high-impact blockchain
initiatives to be initiated by the European
Union and Member States
Blockchain Policy and
Framework Conditions
Use Cases and
Transition Scenarios
Two working groups
30 selected contributors 30 selected contributors
Academic partners
University of Southampton
KMI at Open University
Lucerne University (HSLU)
University College London

7. © 2018 ConsenSys - Confidential
The Observatory & Forum online
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eublockchainforum.eu EU Blockchain map eublockchain.mobilize.io
The public face and knowledge repository
Hosting information about the Forum, thematic reports,
case studies, videos, research papers, educational
content about blockchain, FAQs, news, and…
All blockchain initiatives in one place
Crowdsourced yet verified information about
blockchain initiatives around the world. Allowing
visitors to search and filter information about a wide
variety of blockchain projects
An open and attractive forum discussion
Facilitating engagement with teams, contributors and
community. Bringing together a large panel of expertise
(legal, entrepreneurs, technologists, government
representatives…)

8. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
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Observatory & Forum: Content process and production
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3800
views/downloads
4300
views/downloads
2800
views/downloads
1300
views/downloads
Academic papers participate to the research effort
● On Blockchains and the General Data Protection Regulation (University of Southampton)
● Government services and digital identity (Open University)
● Legal Recognition of Blockchain Registries and Smart Contracts (Open University)
● An overview of blockchain scalability, interoperability and sustainability (Hochschule
Luzern)
● Tokenization of physical assets and the impact of IoT and AI (Hochschule Luzern)
● Blockchains and Digital Assets (University of Southampton)
10 workshops organized so far, gathering hundreds of
experts; 18 planned
● Blockchain innovation in Europe
● GDPR
● Government services and digital identity
● Scalability, Interoperability and Sustainability
● Digital identity
● Legal recognition of blockchain and smart contracts
● Supply chain and traceability
● Convergence of Blockchain, AI and IOT
● Governance and new organizational challenges
● Digital Assets
● Healthcare
● Financial Services
● Cyber Security - Privacy
● Education
● Social Impact
● Energy & Environment
● Tbd
● Tbd (likely Wrap up)
Our thematic reports are viewed as strong thought leadership pieces
1500
views/downloads

9. © 2018 ConsenSys - Confidential
Blockchain Innovation in Europe
July, 2018 / eublockchainforum.eu/reports
• Strong interest from multiple stakeholders
• A vibrant ecosystem to build upon
• European research and education are a great asset
Europe’s advantages
• Many projects are still in early phases of
development – high mortality rate
• Innovation needs legal and regulatory clarification
• Many barriers to innovation are not specific to
blockchain – lack of VC funding, talent
Europe’s challenges and barriers

10. © 2018 ConsenSys - Confidential
Blockchain and the GDPR
October, 2018 eublockchainforum.eu/reports
• Data controllers and processors need to be identified case by
case
• Be mindful of reversal and linkability risks
(anonymization/pseudonymization),
• Many solutions can be imagined to allow data subjects to
exercise their rights: better encryption, ring signatures, zero
knowledge proof, homomorphic encryption
Resolving tensions
• Start with the big picture
• Avoid storing personal data on a blockchain
• Collect personal data off-chain or on a private chain
• Continue to innovate
Rule of thumb principles for entrepreneurs

11. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
Digital identity bears major flaws that could be mitigated
thanks to decentralized identity
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There are persistent problems with the way digital identity works
What is decentralized identity and how can it help?
● Identities are created and managed by third parties, leading to:
○ Fragmented user experience: surfing the web requires users to juggle all the
different identities associated with their usernames or other aliases
○ Insecure storage: almost daily notices of data breaches Difficulties for
businesses: in both trying to secure and protect user data and in verifying the
identities of the counterparties they deal with online
○ Weak link between digital and “offline” identities: makes it relatively easy to
create false identities
● Decentralized identity: the user “creates” his or her own identity, generally by creating
his or her own unique identifier (or a number of them) and attaches to it digital
equivalents of physical world credentials like national IDs and driving licences.
● Self Sovereign Identity: special case of decentralized identity where the user is in
control (i.e. storage and access control) of the credentials attached to his/her identity.

12. © 2018 ConsenSys - Confidential
Where to find information and how to contribute
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• Start contributing to the EU
Blockchain Map
• Contribute to our online
@EUBlockchain community:
Follow / Keep up-to-date Contribute
• Follow @EUBlockchain on Twitter
• Visit www.eublockchainforum.eu
• Register for our newsletter
• Explore our latest news and
announcements

13. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
European Blockchain Partnership/
European Blockchain Services Infrastructure (EBSI)
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• Mandate of the European Blockchain Partnership through the Joint Declaration of 10 April, 2018
• Signatories agree to engage in cooperation to establish a European Blockchain Services Infrastructure
(EBSI)
• EBSI to support “cross-border digital public services”
• 3 deliverables by end of 2018
• Use-cases cross border digital public sector services
• Functionalities and architecture of the EBSI
• Governance Model

14. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
• From 22 members to 29 members working together in monthly meetings to
develop the 3 deliverables of the joint declaration
• Agreement with the orientations in 3 deliverables
• d1: Initial set of use cases for EBSI deployment
• d2: Principles and technical features of the EBSI infrastructure
• d3: Governance model for 2019-2020 to support development of the EBSI
• Connecting Europe Facility (CEF) for EBSI development
• Support to the deployment of cross-border digital services infrastructures in the
European Union
European Blockchain Partnership: Achievements to date
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15. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
EU funding for blockchain
- Through the Connecting Europe Facility and Horizon 2020 programmes, the EU is funding and
co-investing in the most advanced digital infrastructure and the most innovative EU start-ups
- “CEF investments fill the missing links in Europe's energy, transport and digital backbone.”
- “Horizon 2020 is the biggest EU Research and Innovation programme ever with nearly €80 billion
of funding available over 7 years (2014 to 2020)”
- Financing blockchain and distributed ledger technologies projects in H2020
- Through H2020 the Commission is committed to the development of blockchain technologies and its
applications. The Commission is already funding a significant number of research and innovation projects utilising
blockchain technologies in areas such as managing and controlling access to medical and personal data, Internet
of Things, smart homes and grids, cybersecurity, transport, energy, environment and social media.
- Horizon Prize on Blockchains for Social Good
- The "Blockchains for Social Good” Horizon Prize will assign 5 Prizes of 1M€ each to the best decentralised social
innovations leveraging on Distributed Ledger Technologies such as Blockchain. The prize addresses areas such as
traceability of raw materials, decentralised social networks, transparency of public spending, participation in
democratic decision making, financial inclusion.
- The deadline to submit applications is September 3rd 2019, in the meantime you can register your interest by email 15

16. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
EU funding for blockchain
- Around EUR 200 million have already been allocated to blockchain related projects in H2020 with new
opportunities for research and innovation coming up in the Work Programme 2020.
- The Collective Awareness Program for Sustainability and Social Awareness has funded projects like
D-Cent, DECODE and MyHealthMyData that is using blockchain to address user-centric data
management.
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17. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
EU Funding
• New EU investment scheme for AI and blockchain + support programme
• Fact sheet on AI / Blockchain CEF: http://europa.eu/rapid/press-release_MEMO-18-6690_en.htm
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18. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
INATBA
● Initiated by European Commission on the
European Blockchain Roundtable on 20
November 2018
● Public-Private partnership
● Offers developers and users of DLT a global
forum to interact with regulators and policy
makers and bring blockchain technology to the
next stage
● Founded on 6 March 2019 by 105 founding
members
● Currently over 150 members
● Launch event in Brussels on 3 April 2019
including the hashing of member signatures on
several distributed ledgers
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19. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
INATBA Value Proposition
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Promote an open,
transparent and inclusive
global model of
governance for
blockchain and other
distributed ledger
technology
infrastructures and
applications.
Support the development
and adoption of
interoperability
guidelines, specifications
and global standards, to
enhance trusted,
traceable, user-centric
digital services.
Develop sector-specific
guidelines and
specifications for the
development and
acceleration of trusted
sectorial blockchain and
DLT applications in
various sectors of the
economy using
blockchain/DLT
Establish a permanent
dialogue with public
authorities and regulators
to contribute to the
convergence of regulatory
approaches to blockchain
and other distributed
ledger technology
globally.

20. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
INATBA Organisation
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Energy
Finance
Healthcare
Identity
Board of DirectorsGovernmental
Advisory Board
Academic
Advisory Board
Horizontal & Vertical Working Groups
Education
Interoperability
Public Sector
Real Estate
Corporate Governance
Mobility
Privacy
Social Impact
Supply Chain
GENERAL ASSEMBLY
OECD, World Food Program,
the World Bank, United Nations

21. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
INATBA Membership
More than 150 INATBA Members only 3 months after foundation
Board focussing on balancing membership categories and regional
(global) diversification. More than 1,000 contact request received.

22. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
Convergence - the Global Blockchain Conference
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23. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
- A chance to talk directly with regulators and policy makers. Unlike other conferences, Convergence
offers participants a chance to take part in direct discussion with regulators and policy makers as well
as other important stakeholders. It is a unique opportunity to interact with many of the people and
organisations who will be influencing the future of blockchain.
- Opportunity to help set blockchain priorities for the coming year. Participants will be able to take part
in a conference-wide discussion of important priority directions and topics for blockchain, with the aim
of catalysing industry efforts to solve potential hurdles and enable innovation.
- Participation in a global event. The inaugural edition of Convergence will be held in Málaga, Spain, but
the conference is conceived on an international scale, with speakers and participants drawn from the
global blockchain community.
- Exposure to and discussion of the blockchain “big picture.” The conference offers a unique opportunity
to explore and help build a common vision through its utility in terms of networking, collaborating,
innovating and facilitating a direct dialogue with regulators and peers.
Convergence
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24. Thank you!
Tom Lyons
Report Manager, EU Blockchain Observatory & Forum
tom@eublockchainforum.eu
Executive Director, ConsenSys Solutions, Switzerland
tom.lyons@consensys.net

25. © 2018 ConsenSys - Confidential
Tensions between blockchain and the GDPR
It can be difficult to identify
the data controller,
particularly on public,
permissionless blockchains
• Developers
• Nodes
• Users
• Smart contract writers
Controller
The bar for personal data to
be considered anonymized,
and hence not subject to the
GDPR, is very high
• Anonymization vs
pseudonymization
• Reversal risk vs.
linkability risk
Personal Data
What does it take to
anonymize personal data to
the extent that it can be
saved to a blockchain?
• Public keys and
addresses
• Obfuscation techniques
• Strong encryption
• Hashes
• Advanced cryptography
• Data aggregation
Anonymization
There are other tensions
related to the GDPR
principles and the rights and
obligations they specify
• Lawfulness
• Data minimization
• Erasure and rectification
• Access
• Automated processing
• Territoriality
• Data projection by design
and by default
Rights/Obligations
Only truly anonymized personal data is not subject to the GDPR

26. © 2018 ConsenSys - Confidential
Closer look: Hashing and anonymization
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Situation 1:
Hash is used to replace a unique
attribute in a dataset
Situation 2:
Hash is used as a one-time value to
notarize the state of a dataset
Reversal risk
(reverse engineering)
Medium. Brute force can be considered
viable if the size of the input is known or
within a small range (e.g., SSN,
password). Can potentially be mitigated
using a salt or pepper.
Low. Reverse engineering is non-trivial as
the size of the input can range from a few
bytes to hundreds of terabytes and be
coupled with multiple layers of hashing.
Linkability risk
(via data analysis)
High. It is possible to conduct pattern
analysis and trace data back to the
individual, potentially with the help of other
sources of information.
Low. Each hash is unique. There is no
obvious way to cross-analyse the data.

27. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
While blockchain is not mandatory for decentralised identity,
it can be a powerful tool for some aspects
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Creation of DIDs: Blockchain addresses make for great DIDs. These are unique, generated by the user him- or
herself and already leverage public/private key cryptography.
Using the blockchain as a DID registry: Blockchains could also be used as DID registries, which are databases
where you store information about who is related to specific IDs and how to access information about them (e.g.
server end-points).
Notarising credentials: By putting their hashes on the blockchain, we can “notarise” credentials. This doesn’t mean
storing the credentials on the blockchain. It acts as a timestamp and electronic seal.
Access rights and consent: Blockchains can be used as a shared ledger to record the access rights to information.
This allows users to revoke access to content at any time.
Facilitating smart contract execution: In a fully integrated scheme, having links between credentials and the
blockchain can allow easy smart contract interactions such as triggering on-chain payments.

28. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
Support the role of government as an issuer of
verifiable credentials
Clarify the relation of blockchains to eIDAS
Clarify open issues around decentralised identity
and the GDPR
Clarify other potential regulatory issues
Continue the work of exploring a SSI framework as
part of the European Blockchain Services
Infrastructure
Support the broad use of digital identity in cities
By educating and encouraging government agencies on decentralised identity
and their role as issuers The potential benefits for citizens and companies are
huge, both in terms of saving costs and speeding up processes.
To enable blockchain-based trust services recognized up to the highest level of
assurance under eIDAS.
Clarifying the degree to which certain kinds of obfuscation methods might take
data (such as DIDs, revocation registries, keys…) outside the scope of GDPR
For example credentials subject to the Fifth AML Directive (AMLD5), the
Revised Payment Services Directive (PSD2)...
Ensuring that standards are cognisant of and interoperable with DIDs and VCs.
The EU could support local authorities via funding and expertise to build
city-wide infrastructures for their residents
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Six recommendations to promote innovation
and unfold benefits for European citizens
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29. Prepared by ConsenSys for the EU Blockchain Observatory and Forum
Core themes
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• Smart Contracts : Is the current legal framework sufficiently clear to
ensure the enforceability of smart contracts and clarify jurisdiciton in
case of legal disputes?
• Tokenisation : Is the current legal framework appropriate for issuing
and trading tokens (i.e.: crypto assets), when they are not considered
as financial instruments ?