BSI, the business standards company, has commissioned a report on Blockchain which considers the opportunities and challenges the nascent technology presents for the British economy – and the role standards must play if the opportunities are to be fully realized.

Blockchain refers to a type of database spread over multiple locations and which can be used like a digital ledger to record and manage transactions.

In practice, Blockchain works by simplifying the automation process, reducing the need for third-party intermediaries and providing a clear audit trail – transactions cannot be deleted or altered – decreasing the propensity for fraud. Efficiency and cost savings for businesses and end-users is a further benefit of the technology.

The report – Distributed Ledger Technologies/Blockchain: Challenges, opportunities and the prospects for standards* – was created in partnership with RAND Europe, a not-for-profit policy research organization that helps to improve policy and decision making in the public interest, through research and analysis.

Much as social media has shaken up the traditional news industry, Blockchain presents a unique opportunity to transform how businesses, entrepreneurs and the public interact with one another in an increasingly globalized age where cyber security remains a pertinent concern. The potential for Blockchain to improve resilience and security in transactional systems and supply chains will likely be of great interest to organizations of all shapes and sizes and members of the public.

Britain’s fast-growing ‘sharing economy’ could also benefit from widespread adoption of Blockchain, with the technology having the potential to enable new business and economic models. Existing sectors cited in the report as especially likely to benefit from the new technology include finance, healthcare and pharmaceuticals, three heavily regulated sectors where secure data processing and storage is not only expected but mandated.

Sizeable space is given in the report for the role standardization can play in making Blockchain a mainstay of organisations. Crucially, standards can play a pivotal role in ensuring interoperability between business platforms which have adopted Blockchain, reducing the risk of a fragmented ecosystem of Blockchain adopters which could diminish the cost and operability benefits of the technology.

Challenges remain; in common with many new technologies, the report noted a widespread lack of name recognition of what Blockchain is and what the technology can do – adding that many people incorrectly conflate Blockchain with bitcoin. Establishing a consensus on consistent terminology can go a long way towards helping a new technology enter the mainstream, and standardization is expected to play a key role in aiding industry-wide consensus on terminology.

Anne Hayes, Head of Governance and Resilience at BSI, said: “Establishing national and international standards on Blockchain would go a long way towards assuaging the worries industry leaders may have about adopting a new technology. A free-for-all, with no accepted industry-wide standards on Blockchain, would hinder adoption of the technology amongst organizations which could benefit the most from it.”

SalilGunashekar, the principal investigator and a senior analyst at RAND Europe, said: “The overall consensus from the evidence was that standards in different areas could play an important role in Blockchain achieving recognition and widespread adoption. Research for the report was carried out using a mixed-methods approach involving a rapid review of the literature, in-depth interviews with stakeholders from public and private organizations, and an internal workshop.”

RAND Europe’s clients include European governments, institutions, NGOs and private-sector firms with a need for independent, multidisciplinary analysis.

*The report can be viewed here: https://www.bsigroup.com/en-GB/Innovation/dlt/