Blockchain international standards: can there be agreement?

August 28, 2018
Chris Wheal

While its decentralized nature is an essential part of blockchain’s appeal, collaboration is necessary to help blockchain establish standards that will make it easier for the technology to become mainstream.

As the World Economic Forum in its white paper Realizing the Potential of Blockchain points out: “Open-source collaboration is a great organizing principle but it’s not a modus operandi for making big decisions and moving forward. Open-source projects like Wikipedia and Linux, despite their meritocratic principles, still have benevolent dictators.”

Organization

Leading the way on the standards front is the International Organization for Standardization or ISO. Its technical committee ISO/TC 307 is working on 10 different international standards for blockchain and distributed ledger technologies.

Work is being co-ordinated by Standards Australia and there are 49 countries involved. ISO members can choose their level of involvement and at the moment there are 37 participating members and 12 observing members working on the standards.

Participating members get to vote at the various stages of development of standards, while observing members can only offer comments and advice. As well as Australia, participating members include Russia, China, the United States, the United Kingdom, Japan and South Korea.

Gilbert Verdian who established ISO/TC 307 told Bitcoin Magazine: “Establishing blockchain standards will position ISO as a leading contributor to develop global solutions to facilitate data movement and information flows, thus enabling more efficient and timely transactions. There is no one blockchain standard or protocol currently in use. International standards will allow for interoperability and implementation and use of multiple blockchain-related protocols.”

The ISO blockchain committee meets twice a year, with the most recent meeting in June 2018. Work is progressing in many areas including reference architecture, terminology, smart contracts, security, privacy and identity.

At the last meeting, separate study groups were established to focus on governance and interoperability. Additional research is underway on supply chain and trade facilitation. The next meeting of ISO/TC 307 will be in October 2018 in Moscow.

Can the world agree on blockchain standards?

Priorities

Standards Australia has identified five priorities for the committee:

  • Developing blockchain terminology standards as a means to clarify definitions in the sector and set a platform for the development of other related blockchain standards
  • Privacy, security and identity issues
  • Governance and risk-related issues
  • Development of a reference architecture standard using previously agreed standards
  • Establishing interoperability standards

Key areas for blockchain standards have been identified as financial services, government services and supply chain management.

Politics

You might think that developing standards is a case of the techies getting together and working out which bits they have in common and which bits would work better if they could be in common. But, seemingly, things work at a much higher level as well and standards are of great interest to the powers that be.

Earlier this year the New York Times reported on how invested the Russians were in controlling international standards. The four-strong Russian delegation to the ISO blockchain committee meeting in Tokyo last year was headed by Grigory Marshalko, who just happens to work for the FSB, the successor to the KGB. Two more of the Russian delegates also worked for the FSB.

The article quotes two anonymous delegates who were independently told by the Russian delegates that as the Americans control the internet Russia was looking to be in charge of blockchain. China is also an active member of the committee and sent a large delegation to the Tokyo meeting.

Concerns have been raised that countries are looking to get in early and get everyone to do things their way. In response to this suggestion, the ISO has said that its processes are too democratic for this to be feasible.

Moscow is very invested in blockchain standards and will hold the next committee meeting

Language

As the ISO/TC 307 committee has identified, it is vital to speak the same language when you are using the same words. Is blockchain the same as decentralized ledger technology? How many computers do you need to be considered decentralized? And so on.

“There is a clear market need for a globally-agreed set of terminology and concepts for blockchain and distributed ledger technologies which will form the basis for both further standards which address specific aspects of these technologies and which will also enable users and developers of the technologies to communicate effectively,” the British Standards Institution (BSI) says.

The BSI also points to the fact that laws work best when it is clear what they apply to: “In addition, legislators and policy makers interested in supporting adoption of these technologies require a standard reference vocabulary to embed into laws and policies.”

Timing

While standards can undoubtedly help things move along, there is a danger of setting things in stone too early. The World Economic Forum paper quotes Brian Behlendorf, executive director of Hyperledger. “The space is still so young that the desire for standards, while well-placed, runs the risk of hardening projects that have really just come out of the lab,” he warns.

He also points out that too many standards, too early, can stifle innovation. “We need to avoid making serious architectural decisions that first become legacy and then become hindrances. That means conducting experiments and then throwing away the failures as quickly as we can. And it’s harder to throw away failures once they’ve become industry standards.”

A Rand International report on blockchain standards, commissioned by the BSI, concurs with this view, saying “as is generally the case with emerging technologies, the timing for developing and introducing standards (which may build on existing standards) is critical.”

It cautions that: “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.”

But conversely: “A standards strategy that occurs too late with regard to a technology potentially risks missing opportunities to maximise the benefits the technology could deliver. Although it is a field characterised by rapid change and uncertainties, steps can be taken to better understand the current realities, drivers of change and impacted sectors.”

Leaders

Standards Australia says the people working on ISO/TC 307 will keep up with the rapidly changing nature of the technology.

“The experts involved in the development of blockchain standards are leaders in this field. Developing standards for blockchain pools together all of this expert knowledge to establish global best practice for broader blockchain use around the world. By providing guidance on technical issues such as terminology, security and interoperability, standards enable companies to grow, innovate and trade effectively across international borders.”

Different approaches

While the ISO committee members are working on ways to standardise blockchain, the man who instigated ISO/TC 307, Gilbert Verdian, is working on another way of getting blockchains to work with one another.

He has helped devise Quant’s Overledger which, rather than getting blockchains to look to all do things the same way, accepts that they are different and looks to join them together another way.

Overledger is a platform that sits on top of blockchains to enable interoperability between existing systems, networks and blockchains. Not surprisingly he says it will be compliant with the ISO’s blockchain standards.

Quant describes Overledger as: “The first blockchain operating system that connects the world’s networks and facilitates the development of multi-chain applications.”

Another way of working is offered by Hyperledger. It is an open-source collaboration created to advance cross-industry blockchain technologies. It is a global collaboration, hosted by The Linux Foundation and includes leaders in finance, banking, IoT, supply chain, manufacturing and technology.

The Hyperledger white paper points out that while blockchain is a powerful technology, it is not one-size-fits-all: “Since different organizations have different needs, there will never be one single, standard blockchain. Instead, we expect to see many blockchains with different features that provide a wide range of solutions across many industries,” it says.

BITA is looking at blockchain standards for the freight industry

Other initiatives

While the ISO project is the major one, other standards initiatives include Accord, which is looking to have a legal basis to smart contracts. Members include finance companies, law firms and technology companies.

The World Wide Web Consortium (W3C), which had a key role in standardising the functionality of web browsers, has a blockchain community group that is working on a format and protocol for decentralized ledgers on the web.

The Institute of Electrical and Electronics Engineers (IEEE) Standards Association has a blockchain working group looking at standards for blockchain use in the internet of things.

The International Telecommunication Union (ITU) has a focus group to establish best practice and use of standards in blockchain.

The Blockchain in Transport Alliance (BITA) is looking to develop blockchain standards for the freight industry.

New territory

While many of the world’s major powers are involved in ISO/TC 307, there is a noticeable lack of involvement from African, South American and Middle Eastern countries, with only South Africa, Brazil and the United Arab Emirates being participating members of the committee.

While this may just reflect the current level of interest in these groups of countries it could also mean that they may go their own way and not follow the ISO’s lead when setting standards in the future.

Voluntary

And even when standards are agreed, there is the small matter of companies signing up to them, with the cost of signing up to standards possibly prohibitive to small companies.

As Standards Australia points out: “Once standards are published, their use is voluntary (unless referenced in legislation by a regulatory body). It is up to individuals or companies whether they choose to comply to a standard.”

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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