26 May 2017

The BSI's Anne Hayes warns that a "free-for-all", with no accepted industry-wide standards on blockchain, will hinder the technology's adoption.

Blockchain technology presents a unique opportunity to transform how businesses and the public interact with one another in an increasingly globalised age where cyber security remains a major concern, according to a BSI study. 

Although it is still in its nascent stages, the business standards company says the technology’s potential to improve resilience and security in transactional systems and supply chains will likely be of great interest to all organisations.

The BSI explains that blockchain refers to a type of database spread over multiple locations which can be used like a digital ledger to record and manage transactions.

In practice, it works by simplifying the automation process, reducing the need for third-party intermediaries and providing a clear audit trail. The BSI says transactions cannot be deleted or altered, thereby decreasing the propensity for fraud. 

It adds that efficiency and cost savings for businesses and end-users is a further benefit of the technology.

The BSI created its report, Distributed Ledger Technologies/Blockchain: Challenges, opportunities and the prospects for standards, in partnership with RAND Europe, a not-for-profit policy research organisation that aims to help improve policy and decision making in the public interest through research and analysis.

The study also revealed that 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. 

The BSI points out that standardisation will play a key role in ensuring interoperability between business platforms which have adopted blockchain. It says this will reduce the risk of a fragmented ecosystem of adopters which could diminish the cost and operability benefits of the technology.

Anne Hayes, head of governance and resilience at BSI, adds that 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. 

She says: “A free-for-all, with no accepted industry-wide standards on blockchain, would hinder adoption of the technology amongst organisations which could benefit the most from it.”