Setting standards for blockchain would help expand the technology’s use in government and enterprises, government and industry officials said at an event in Washington D.C. Jan 18.
Developing protocols that would allow blockchains to operate more easily with each other, protect data privacy, and ensure cybersecurity could help lower costs and accelerate implementation, they said at the event, co-hosted by the Congressional Blockchain Caucus and the Software & Information Industry Association.
“Standards would give credibility to the whole process,” Thomas Savage, lead researcher at the U.S. Centers for Disease Control and Prevention (CDC), told Bloomberg Law, adding that his opinions were his own and not necessarily those of the CDC.
Blockchain technologies, which are used to create cryptocurrencies, operate like an online, transparent databases. The parties involved in a particular pursuit—such as a transaction with a virtual currency or a property transfer—agree to the integrity of their transactions and can track them in an auditable, unchangeable record.
Private companies and federal agencies, such as the U.S. State Department, are exploring and implementing blockchain for a broad range of uses, such as making international payments more transparent, managing healthcare information or helping citizens manage their identity. But the lack of technology standardization, data security concerns and unsettled intellectual property questions have been obstacles.
The Congressional Blockchain Caucus has held discussions with the U.S. National Institute of Standards and Technology (NIST) about a security standard, Rep. David Schweikert (R-Ariz.), the caucus’ co-chair, said. A NIST spokesperson said the agency is working with the International Organization for Standardization (ISO) to develop blockchain standards.
Allowing blockchain creators to reuse others’ standardized software code would accelerate technology adoption in the federal government, Savage of CDC said. Standardization “would give everybody a single direction to proceed,” he said.
Protocol standards that would allow blockchains to communicate and operate with others also are important to industry as companies begin using the technology to settle payments or transfer value across borders, Brian Trackman, counsel at the Commodity Futures Trading Commission’s LabCFTC, said. LabCFTC is a CFTC unit that engages in new technologies.
“If they can’t communicate with each other, you’re going to run into problems,” Trackman said, who also stated his opinions were his own and not necessarily those of the CFTC. “That’s a real challenge that people are just beginning to think about.”
But the blockchain technology may be too nascent for some types of standardization, said David Egts, chief technologist for the North American public sector at Red Hat, an open source software company. It should be allowed to develop further before setting standards that would shape fundamental operations, such as how the structure of blockchain should work.
“You don’t want to come up with standards and then back technology into it,” Egts said.
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