Blockchain standardization on a national level: What could work?

Notes from an exchange with Christiana Aristidou, Technology Lawyer, National Delegate in the International Standardisation Organisation (ISO), representing Cyprus Standards (CYS) in ISO TC 307 for Blockchain and Electronic Distributed Ledger Technologies.

Background: Now in it’s second year as a research project Bloomen seeks regular information exchange with experts, in order to present insights, concepts and goals so far and refine those for a better market fit. This is the background for setting up a brief exchange with Ms. Christiana Aristidou in Cyprus.

The conversation was conducted by Michalis Odysseos, from Bloomen-partner Antenna, a leading TV station in Cyprus. 

Key point: What standards are needed for blockchain? Once in place, we usually take these standards as a given. But specifically, because of the versatility of Blockchain the technology and its wide-ranging potential pose a challenge to get it right. 

Enter Ms Christiana Aristidou. She is an experience technology lawyer in Cyprus and  serves as the National Delegate in the International Standardisation Organisation (ISO) representing Cyprus Standards (CYS) in ISO TC 307  – which covers Blockchain and Electronic Distributed Ledger Technologies.

The goals of Bloomen: As a start of the conversation Bloomen as a research project was introduced, including the mission, vision and aims. Bloomen is special as it has a focus on better management of media items such as music, photos and videos. Here the specific use case of Antenna as part of the Bloomen project was described in detail, e.g. the search for news approaches in peer-to-peer payments when watching copyrighted video and TV content. Finally, as a third topic, it was discussed how tokenization can help to automatically pay local taxes for the consumption of digital services to digital wallets.

Key points from the discussion:

  • Making it work together: Ms. Aristidou stressed the  importance of interoperability between different types of blockchains and protocols, especially for those used for governmental distributed ledger systems. To that end working groups at ISO have been formed, with the goal of setting standards to make such interoperability possible.
  • Importance of regional interests and needs: One challenge in this process is to ensure that national interests such as the specific interests of a country like Cyprus are covered. Other big factors are the technology standards as well as the the industry sectors affected by any new rules or technologies. The goal is to ensure that the additions are not in conflict with the current legal and regulatory framework and/or hinder market development in the various industries. 
  • Can we agree on a standard? Standardization committees such as the ones working for ISO do not want to stifle innovation but instead to enable it. Ms. Aristidou said, that standards help to build trust in new technologies, provided that they follow high quality requirements. Equally important is to set standards to reduce security risks and vulnerabilities. Finding standards for blockchain is especially complicated, because of fast technology development in combination with the fact there are existing standards which must be considered, for example the current standards set for the financial industry.
  • What companies need to do: Technology providers must give emphasis at the blockchains’ reference architecture, taxonomy and ontology as well as terminology and concepts for the implementations. Anticipating security risks and vulnerabilities is hugely important, as well as the protection of privacy and personally identifiable information. 
  • Is it safe? Security risks and vulnerabilities standards is an area that standardization committees (ISO) give great emphasis at. As one part of this efforts, customer identity and privacy must be ensured as well as the use of personal identifiable information (PII). For this reason governments will have to operate their systems mostly on permissioned blockchains or hybrid public-private blockchains in order to maintain the control of the sensitive and personally identifiable data and information of their citizens.
  • Conflicts with other regulations, such as privacy: Some features which are making Blockchain so interesting are in conflict with other regulations, said Ms. Aristidou. Example: The new privacy rules for the EU, introduced in May 2018 (GDPR) provide “the right to be forgotten”. In article 17, users have the right to ask for erasure of one’s data. This in turn creates a huge challenge for the use of blockchains due to their immutability. It is questionable how the “right to be forgotten” will be respected in such instances.
  • Smart contracts should have legal binding to current contract law: A final point, based on her experience as a lawyer: Smart contracts/tokens in most of the use cases would need to be legally binding as per the current contract law. Therefore special attention should be paid to the fact that when such are codified, they should be codified with considerable accuracy and precision to preserve the characteristics that the contract law prescribes for a legally binding. At the same time, smart contracts must be able to interoperate with other blockchain-based systems in place, otherwise they won’t be able to operate at their full potential.