Lack of Standards in Blockchain Technology: What to Do?

26.06.2018
7 min.
title

According to Deloitte, by 2025 ten percent of global GDP will be built on top of blockchain applications. But the unified standards for mass blockchain adoption are still lacking.

Setting common standards is a priority for mass adoption of blockchain technology in the enterprise space. Adoption depends on how fast standards develop for the biggest stumbling blocks in the industry: scalability and interoperability. To speed up standards development and adoption many key players formed and joined industry groups that work on specifications. The task is not as glamorous as advertising ICO development. It’s not as transparent and public either, as nations and corporations alike try to get to the finish line first, so it is quite a challenge to navigate the blockchain standards space, but we will sure try.

In this article we look at the efforts of Enterprise Ethereum Alliance, R3 and Hyperledger to produce blockchain tech standards, what specification documents are currently in the works and what you can do now to come out on top later.

EEA Blockchain Tech Standards

The Enterprise Ethereum Alliance, or EEA, is a non-profit corporation consisting of startups and Fortune 500 companies, developers and academics, as well as technology vendors aimed at developing enterprise deployment open-source standards. It was founded in March 2017 and boasts strong partners like Accenture and BP, Credit Suisse, and Microsoft among its 500+ members. The organization hopes to provide means to streamline enterprise blockchain solutions processes without the need to implement in-house or hire a third-party cryptocurrency development company to create private enterprise-ready Ethereum apps.

The Ethereum community has big plans to standardize enterprise blockchain app development. Since its conception in 2017, the EEA has been working on research docs and white papers, sharing sharding and zero-knowledge proof ideas, as well as views on homomorphic encryption and layer 2 solutions such as plasma and Raiden, with all this extensive data available to the Ethereum ecosystem community.

The Enterprise Ethereum architecture stack

Enterprise Ethereum Client Specification 1.0 (EEAS) was released on May 2, 2018 and is available as a public download. The EEA also plans to introduce TestNet to advance interoperability pre-testing across solutions from its members. In the first half of 2019, the EEA plans to start a Certification Testing Program, making sure solutions conform and interoperate with the standard, enhancing customer confidence and trust.

The EEA hopes that an approach based on standards will help accelerate the development of the enterprise blockchain market. According to EEU, common standards are of vital importance in the Web 3.0 Blockchain Revolution for three reasons:

  • Standards that promote and support blockchain application development interoperability promote organic scalability of enterprise solutions
  • Standards will allow enterprises to avoid vendor lock-in, promote competition, and ensure interoperability through accredited testing and certification labs
  • Interoperability will allow enterprises to choose multiple vendors and freely switch vendors in cases where passing accredited EEA certification testing is required. Stiffer competition will help lower industry prices.

The EEAS allows enterprises to use the conceptual framework of standardizing the Ethereum ecosystem components. The EEA promises to release the next version of the specification in October 2018. It is planned as a spec that will allow for different certification testing criteria as pertaining to specific vertical market categories.

Enterprise Ethereum architecture stack

The new architecture stack from EEA is made up of five tiers. The base layer is the peer-to-peer protocol. A core blockchain layer is on top, managing transactions, consensus, as well as on and off chain data storage. The middle layer of the EEAS structure is made up of privacy and scaling elements. The fourth layer deals with oracle interactions, authentication and permissions, wallets, key management. The last layer of the stack is centered on dApps and smart contract tools. The building blocks for creating the next-gen Enterprise Ethereum applications are clearly defined, providing a transparent framework for smart contract capable blockchain application development and implementation.

To further explore, the EEA’s Enterprise Ethereum Architecture Stack here is a video from Conor Svensson, blk.io founder and Adhoc Chair of EEA TSC:

R3

R3 is an enterprise software consortium with a network of 200+ fintech institutions and regulators, trade associations and professional services firms as well as technology companies. Their partnership network includes Accenture, Microsoft, and HPE; software firms Guardtime, Finastra, and Gemalto; startups such as Tradewind Markets, GuildOne, and TradeIX. R3 claims the largest funding base in the enterprise blockchain segment, having raised $120+ million from 45+ institutions and already boasting $20 million in revenue.

The firm is working on a blockchain platform designed specifically for businesses named Corda. Corda is an open-source DLT created to streamline finance and commerce with blockchain technology. Finastra and Tradewind Markets developed financial apps using the platform that is already live.

According to Richard Brown of R3, Corda is the only DLT designed from the ground up to meet the needs of fintech services institutions, with the industry-proven technologies and standards built into the platform. He argues it was designed to maximize interoperability with existing systems but also says it has the broadest applicability in the blockchain space. That’s why enterprises like B3i Services AG choose the platform based on critical factors such as scalability and data privacy, interoperability and developer productivity.

In a controversial post on universal interoperability of blockchain applications Richard Brown argued that only Corda is made for the enterprise as a scalable, interoperable blockchain platform. Richard Brown stated that enterprises today need the universal interoperability on the level of public networks coupled with the privacy of private networks. He criticized Ethereum for scaling and privacy bottlenecks and called Hyperledger out for having both the wrong vision and design.

Vision and design comparison table

Hyperledger

Launched in 2015 by the Linux Foundation, Hyperledger also aims to develop blockchain technology standards for businesses. When it comes to blockchain standards Hyperledger is similar to EEA Enterprise Ethereum Architecture Stack at its core. The Hyperledger Fabric project’s goal is to create a permission blockchain infrastructure that can be deployed as modules by enterprises. Hyperledger is different from Corda, however, since it develops solutions with predefined use cases, such as Caliper. Caliper is a blockchain benchmark tool which enables users to measure the performance of a specified blockchain implementation with a set of predefined use cases.

What’s in Development?

Blockchain standards are being developed as we speak by different interested parties, from fintech giants and business moguls to national governments of the United States, China, Russia, Singapore, and Switzerland, trying to gain economic and geopolitical advantages from the new tech.

To look at just the initiatives that are not top secret, GS1, a global business communications standards organization, in partnership with IBM and Microsoft, plans to leverage GS1 Standards in their enterprise blockchain applications for the supply chain and logistics niche. GS1’s identification and structured data standards will help blockchain network users to scale the adoption of the tech in the enterprise and maintain a shared version of supply chain and logistics events. The initiative will likely increase data integrity and trust while reducing data duplication and reconciliation.

The Department of Homeland Security is partnering with blockchain dev companies to set standards for the supply chain process. DHS components such as U.S. Customs and Border Protection are running blockchain pilots to check how the tech can make the fight against counterfeit products and intellectual property theft more efficient. DHS is supporting the development of globally available specifications in order to usher in interoperability as a forerunner to established standards. This will lead to the creation of a competitive marketplace offering cost-effective innovative solutions based on unified standards. Douglas Maughan, cybersecurity division director of DHS’s Science and Technology Directorate said: “Governments must take a balanced and measured approach between regulating this ever-changing technology and allowing for its innovation and evolution.”

The Blockchain in Transport Alliance, which is a consortium of shipping and logistics companies, also plans to publish standards for the development of blockchain applications in 2018. The standards framework will cover smart contracts and freight payments, asset maintenance and ownership history, as well as the chain of freight custody. This, in turn, will help unify safety specifications for such applications as vendor management, loss prevention, security, billing and payments in logistics and fright niches. 

Lack of Standards: What to Do?

Besides watching the changes in the volatile situation with blockchain standards, here are a few more tips:

  • Choose your blockchain dev platform carefully from the point of view of whether industry standards are already available for the said platform. With Etherium you already benefit from existing specifications, with clear plans on the way for 2019 and beyond. The Ethereum 30,000+ developer community is also a bonus and a guarantee that there will be an ecosystem to support your solution years from now.
  • Choose your platform depending on the importance of specific standards your particular business situation requires. For example, as seen from the article, R3 is focused on blockchain standards most applicable in the financial and commerce spheres while Hyperledger is centered on standards around developing use case specific solutions.
  • Consult a third-party blockchain software development provider like Itransition to analyze your specific business case and map out a blockchain development strategy that will work best for you.
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