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The importance of standards implementation in blockchain technology

The importance of standards implementation in blockchain technology

Articles / 2018-09-17 12:20 PM

The importance of standards implementation in blockchain technology

Recently the matters of standards and regulations in the technology of blockchain have been raised in many web conversations due to the fact that this technology is developing rapidly.

What is people’s biggest concern? Here we can define a matter of Smart contracts – those are the agreements that happen automatically as they are building up into the codes of this blockchain.

Nowadays this technology is growing at huge speed and a lot of users are creating the contracts they need in every aspect and almost in every transaction. The official regulators just cannot follow this development and to be on the same page, as it is too fast, so for now, it is not clear, how those standards will be established to cover the entire area.

If there will be no clear regulations developed and implemented in the near future, there is a big question mark if the whole idea of global adoption will survive.

In a perfect case of scenario, there should be an agreement between all the participants who are creating their smart contracts. Unfortunately, the reality is very often not going this way.

If the companies will go on with forcing the growth of different smart contracts and will not try to bring on global regulations, then they will not be able to use all the features of blockchain technology. And definitely there are many reasons, why there must be certain regulation of smart contracts:

In the modern technology, the speed of development is very high so the rules and regulation just cannot be changed up to date

The codes and programs, used to create smart contracts, are very different from each other. All the participants of the system are using their own.

So what happens is – the value of having protocol and standard is just disappearing.

Having a common standard and the rule means for companies to be on the same wave and to move forward in their development. By regulating the smart contracts with the same set of rules, the basis for the growth of the whole industry will be set.

For example, if we speak about one company, working as a transporter of packages and using smart contracts for its official procedures. The whole activity will include many participants – the sender, the receiver and the logistics provider. And in order to transfer this package, the sender company is writing their smart contracts. So without global regulations of this industry, there must be the smart contact for every step of the way. And this will create a lot of them that can be not connected on some point.

The process can be used by the company in one or two small occasions, but not in massive operations and deals.

A set of rules and regulations as a necessity for blockchain technology to go global

Personal smart contracts have now spread everywhere through the blockchain industry. And its number is growing rapidly.

The fact is – the first thing to suffer from the number of smart contract standards is their compatibility. And this even can be seen in simple aspects – how the information will be transferred or stored.

If there will be no action taken, the system can end up like the modern internet – where you can find an enormous amount of different clouds, that are not compatible.

The structure of siloed databases is coming in a way where both sides must integrate. The information is kept differently by all the parties and the process of making data understandable is very difficult – starting from the fact, that not everyone is speaking the same language. Having commonly regulated blockchain involved allows the companies to have data adjusted and the process of messaging becomes easier.

So what is the best way to implement standards for the whole industry? Actually, the answer is very simple – there is a set of rules already. And you should not invent something radically new. The companies, using blockchain have already their own base of regulations. It just has to be worked on and developed into something useful for the entire industry and for all the companies, as it will be familiar to them.

As you may guess, it is much easier to use one of the standards that industry has created for itself instead of discovering something absolutely new.

And maybe it will appear to be difficult at first – to make everyone work as per one standard for using a smart contract. But this is something that will help the program to survive and have a longer life in the industry.

There are attempts to implement standards in the blockchain industry now. And the place for them is a huge and highly regulated company – only in here, the system can work properly.

It is very hard to control the number of smart contracts on multiple platforms

The big giants of the modern business world must think about implementing one set of regulations for the blockchain system. As it might end up with everyone creating their own smart contracts – every time new for every procedure and operation will suffer in this case.

For example, two companies wanted to make an agreement and cooperate on the market in order for them to keep up and stay on top of the business. If they don’t create their standards of working together, their systems will not function properly. And instead of decentralization of data, in fact, they will be still with their own information, but now having proper communication with each other.

They will have to sign an agreement and create their regulations in order to be able to work on the same page.

Speaking of a situation in the market and industry at the moment, we might notice that it is creating a lot of positive and unique smart contracts. And maybe this is done to choose the best ones for the future reference and to put them together in a set of regulations. But also we notice that using of every time changing smart contracts – its own for every company cannot work for larger adoption. And the specialists better start working on them now to help the industry to grow.