Speaking about Smart Contracts: Need for Standards

Blockchain technology is not a day old but still, we have to recognize that the technology hides a lot. We cannot say it is bad as we understand perfectly well there is a great future behind the blockchain technology development. Nowadays one of the most urgent issues about the blockchain is that on the principles and standards regulating its operation in general and the functioning of the smart contracts in particular. More to the point, users would like to know how to establish and support the smart contract standards.

The speed of the cyber technology development is really high. Businesses implement smart contracts here and there. Government agencies are doing their best to keep up with the pace of that development but they are not always successful. Accordingly, it is not entirely clear what kind of principles will be used to establish the smart contract standards.

Why do we have to raise such an issue as the setting of standards for the smart contracts?

As any industry and technology being used in it, blockchain and smart contracts need the agreed methods of their operation. Standard in its nature is nothing more than that agreed method of carrying out of the operations needed. In general, it can be anything: manufacture of a product, process management, providing services or delivery of products. Standards may embrace a wide range of actions and objects, for carrying out or producing of which a business bears the responsibility to the customers who use them. If we are speaking about the extensive exploitation of the smart contracts we must acknowledge the necessity of such standards.

Another issue is who is going to set them all?

Standards present a concentrated wisdom of people possessing expert knowledge in their spheres and knowing what the organizations they represent really need. Here we are speaking about producers, vendors, customers, buyers, industry associations, users and lawmakers. Of course, that would be the best case, but things not always go like that.

What is going to happen if there are no smart contract standards?

At first sight nothing crucial, but if businesses will further blindly spread smart contracts left and right they take risks to blink all that potential the smart contracts and the blockchain in general have.

So, let us try to shape the reasons why we need smart contracts standardization right now.

Existing multiple standards cannot keep up with the pace of the technological progress.

Those codes and protocols being used now in different companies vary just like those very companies do. All of them use their own standardization systems. If we touch upon the cryptocurrency, the most famous is the Ethereum Standardization System. It accounts for a number of standards. You absolutely should know about such a standard as ERC-20, that is a token standard that is in the core of our project as well. But there are also such standards (or proposals) as ERC-190, ERC-223, and ERC-721.

So just imagine how many platforms are operating right now and how many more will appear in the nearest future. If all of them are going to operate using their own principles the industry soon may get dragged into chaos.

Extensive application of smart contracts is impossible without a unified standardization system

With an enormous amount of smart contracts in frames of the blockchain systems, it seems now blockchain takes risks to encounter some obstacles on its way to its development. And it is the absence of a unified standardization system that may become a reason for that. Such absence may deteriorate the general compatibility of such simple things as storage and exchange of information. As a consequence, blockchain technology may come up just like the Internet in the shape we have it now, that with a great number of cloud storages.

Businesses store their data in many various ways. Now it reflects the Tower of Babylon so much. If you remember, it was the different languages that did not let people complete the construction of the Tower. If those interested in the blockchain technology development do not want their endeavors to end up the same they should invent a common language. Standardization may become the first step on the way to the invention of such a language.

Myriad of smart contracts within a myriad of platforms hinders good management

Blockchains have to process more and more information and transactions. Soon their size may reach a critical point. So we must recognize that it is high time to take measures that will further promote the progress of the industry. Thus, it is high time to understand that the overall efficiency now depends on standardization. Let us remember that blockchain is all about decentralization. It is its main feature. And the absence of common standards do not promote the decentralization but impedes it. The industry may end up functioning as a number of countries that cannot come to the agreement and it is a common knowledge that there is no business without a connection.

The point of any standard is providing a reliable basis for reaching a solution reflecting common expectations in regards to this or that product or service. That would allow:

making trade less complicated;

forming a structure for cost saving, efficiency increase and capacity for interaction;

strengthening consumer protection and their overall confidence.

Standards present knowledge. They make efficient instruments able to promote innovations and increase productivity. They may make organizations successful, they may make everyday life less complicated, but safer and healthier.