What is the maximum amount of time a conversation about blockchain technology can last before the mention of cryptocurrency, or the bubble, or both?
These days, probably not too long. Years from now, however, the psychological distance between the two inventions will have increased to reflect their technological distinctions more accurately. For now, the common origin of blockchains and cryptocurrency make understanding either one as a singular technology somewhat confounding for laymen.
Although the two technologies are fundamentally symbiotic, several world-class studies predict what many insiders already know – it's neither cryptocurrency nor financial services that is blockchain's "killer app" – it's the blockchain technology itself. And according to experts, there will be " millions" of blockchains powering our planet very soon.
This is the story of efforts to make all those blockchains interoperate, and why the standards being developed to make that happen could be the catalyst needed to facilitate a techno-social revolution that makes what cryptocurrency is doing to money pale in comparison.
Developing Standards For Blockchain Technology
Two research reports from 2017 have laid the theoretical foundation for developing blockchain standards in 2018 and beyond. In March of last year, Standards Australia, a non-government, not-for-profit organization which develops industrial, scientific and consumer standards for Australia and the international community, released findings from their work on behalf of one of the most prominent standards institutions: the International Organization for Standardization (ISO).
Standards Australia is currently secretariat for the ISO's technical committee number 307 ( TC 307). Its report, which surveyed "a balanced mixture of Australian government, industry, academic/research and consumer organizations" found that "the priority order for standards development activities relating to blockchain according to respondents of the survey" were: 1. terminology, 2. Privacy, 3. Governance, 4. Interoperability, 5. Security, and 6. Risk.
ETHNews asked Bronwyn Evans, CEO of Standards Australia, how the roadmap for developing blockchain standards has evolved over nearly a year's time. Evans told ETHNews: "ISO/TC-307 has met twice, most recently in Tokyo. Work is progressing in many areas including reference architecture, terminology, smart contracts, and security and identity. Separate study groups were established to focus on governance and interoperability, and additional research is underway on supply chain and trade facilitation."
ETHNews: How is TC 307 doing? What have you been up to since last March and what is next for the committee?
BE: Active engagement and participation is taking place across borders and industry boundaries. As this work progresses, we are likely to see the emergence of standards as guidance for industry, government, and other key players. The next ISO/TC-307 meeting in London in May will mark the next milestone for standardization in this area.
ETHNews: Has your thinking about standards for blockchain evolved? How fast are initiatives for blockchain standards developing?
BE: Some markets are moving beyond proof of concepts and scaling quickly, but we have to share our experiences, particularly when we talk about trade across borders. This is the promise of blockchain, but it needs to be realized through more concerted action.
ETHNews: Some people think that cryptocurrency will only become legitimately recognized by world governments once regulations – or standards – by monetary authorities are put into place. Do you think the same holds true for blockchain technology? Is there a relationship between having standards and innovation?
BE: Standardization can, and does, play a pivotal role in supporting innovation, providing businesses with confidence and empowering consumers. Standards are the floor, not the ceiling. That is, they are intended to provide baseline assurance for investors, decision-makers, and consumers that the technology is safe, efficient, and fit-for-purpose, which can also mean interoperable. This makes sense for producers and consumers of goods and services. It is in the manufacturer's interest to make sure their products are compatible with the broadest range of other devices and software. This enables consumers to buy that product, use it with confidence, and update it to current versions when needed. This is a critical consideration in the blockchain arena.
Later in October of 2017, the RAND Corporation published a blockchain standards report of their own. The report, which was sponsored by the British Standards Institution (BSI), focused less on developing a roadmap that would lead to the creation of blockchain standards, and more on the potential role that standards could have in supporting the growth of blockchain technology. The RAND report concluded:
"As is generally the case with emerging technologies, the timing for developing the introducing standards (which may build on existing standards) is critical. An intervention that occurs too early could run the risk of locking in stakeholders to solutions that, in the long run, might not be the most effective and, in the process, potentially stifle innovation. A standards strategy that occurs too late … potentially risks missing opportunities to maximize the benefits the technology could deliver."
ETHNews reached out to RAND's Advait Deshpande, one of the report's authors, to gain an updated perspective of blockchain standards development.
ETHNews: Your report mentions many stakeholders involved in standard creation and adoption. In your opinion, what are the most critical issues for developing blockchain standards moving into 2018?
AD: Since the blockchain technology landscape is still evolving, the criticality of the issues is likely to vary greatly based on the various stakeholders' needs. From the perspective of an overall pan-society adoption, the issue of lack of clarity over terminology and perceived immaturity of the technology is important to consider. From a business perspective, the prospect of disruption to existing industry practices, limited availability of evidence on business gains and wider economic impact, and uncertainty around regulation are likely to be the important issues.
ETHNews: Do you have any new insights into which standards may be developed first?
AD: Although we found an overall consensus on the need for standards, the areas for standardization and prioritization of these standards appear to vary based on the stakeholder needs. As a result, it may be too early to identify or predict the standards which are likely to be developed first. There is limited consensus on the potential for standards on technical aspects. The markets are likely to play a crucial role in supporting the growth of the technology.
How Standards Drive Innovation
History is filled with lessons about how the development of standards increases creativity and innovation. For example, Issac Newton was not knighted because of the Principia, but for his work as mint warden, helping Queen Anne to establish standard rates for coins. That work in coin standardization led to greater innovation in that particular use case, eventually developing into paper money, which was the standard before money went digital.
One person who understands the need for developing standards is Andrew Keys, head of global business development at ConsenSys. Keys told ETHNews that the role of standards is going to be altered when it comes to blockchain, because the technology itself can be used in the process.
"Regulators will learn blockchains are their best friend. Smart contracts is where the business logic lies. Regulators will write software specs and develop tests that compliant companies/software must pass," Keys told ETHNews. "Real-time compliance, accounting, and monitoring" will change the traditional way standards are conceived and implemented.
On the long road to mass adoption, it is perhaps the development of standards that will speed the process faster than anything else. Once there is a solid foundation for using the technology, the veracity, efficiency, and transparency created by blockchains can hopefully begin to permeate society in more profound ways.