The blockchain can be difficult to understand and even tougher to define. Is its underlying technology distributed ledger technology, consensus ledger technology or simply distributed databases? Are its users miners, nodes or validators? Are they transacting cryptocurrencies, tokens or alt-coins, and are they doing so on public or private ledgers?
Such terms “might refer to the same thing, or almost the same thing, or something closely related, or even something completely opposite,” Angela Walch, associate professor at St. Mary’s University School of Law and research fellow at the Centre for Blockchain Technologies at University College London, writes in an oft-cited paper about blockchain terminology. “At the moment, it would be difficult to provide a clear or uncontested definition of any of the terms above.”
But that may change. Two standards organizations—the International Standards Association (ISO) and the Accredited Standards Committee X9 (ASC X9), a nonprofit representing the financial services industry and recognized by the American National Standards Institute (ANSI)—are developing common terminology for blockchain technologies.
“Without clear definitions, people end up talking past one another,” Victoria Lemieux, associate professor of archival science and head of the blockchain research cluster at the University of British Columbia, tells ThirtyK. “A commonly understood, more accurate and precise lexicon will help make sure that we are talking about apples and apples, not apples and oranges, and, ultimately, this will help us identify real gaps or areas needing further development or thinking through in the way this technology is applied.”
Why Words Matter
Terminology matters in any field. But given how concepts such as “immutability” are so central to the entire premise of the blockchain and the cryptocurrencies, contracts and other systems built atop it, it may matter even more.
While we tend to think of the blockchain as unalterable, both bitcoin (BTC) and ether (ETH) have been rolled back at different points, Walch says. Hard forks, 51-percent attacks and other events have led some portions of blockchain ledgers to be written off as illegitimate by their users. “It is problematic to describe blockchain technology as a whole as immutable, when at least some (and perhaps all?) blockchain records may be changed if the people operating the blockchain so choose,” Walch writes.
But laws and regulations governing the blockchain already on the books use language that suggests sweeping assumptions about the technology. In March 2017, Arizona signed into law legislation recognizing blockchain signatures and smart contracts; Vermont enacted legislation making blockchain data admissible in court the previous year. Both laws nod to the concept of immutability in ways that may not fully bear out in practice for all uses of blockchain technology.
The lack of common terminology also could lead to differences in local laws and regulations that could “stifle innovation on a nationwide level,” Steve Stevens, X9’s executive director, tells ThirtyK. The resulting conflicts, Lemieux adds, could result in a scenario that “organizations operating in multiple jurisdictions will find difficult to navigate.”
Efforts to identify common terminology are taking an expansive look at the blockchain and its underlying technologies. That’s in part a response to the current-day conflation of cryptocurrencies and the technology that makes them possible, as well as emerging uses of the blockchain.
“There are a wide range of other use cases that have the potential to enable social, political and economic transformations,” including voting systems, citizen services, contract management and educational certification, Lemieux tells ThirtyK.
Before becoming involved in ISO’s standards work, Lemieux, her colleague Luciana Duranti and other researchers began working on a terminology database of key terms. Although separate from the ISO committee’s work, the database offers a sense of the current array of definitions surrounding the technology.
The ISO committee focused on terminology, TC 307, intends to have a working draft for internal discussion by mid-April. Lemieux says it’s difficult to know the timing from that point forward, but the committee initially planned to have the project’s terminology published by early 2020.
ASC X9, which has developed financial industry standards involving the printing and processing of checks, the tracking of financial transactions and remittance data, and electronic contracts, has created its own work group focused on creating an ANSI-accredited terminology standard. Co-led by Amy Davine Kim from the Chamber of Digital Commerce, the work group is made up of financial institutions, government organizations, legal firms, large vendors and fintech startups. It has a “working list of about 70 terms,” which it will introduce in a technical report at the end of the year. The report will use “continuous maintenance methodology,” meaning it can be updated on an ongoing basis, according to Stevens.
X9, which coordinates with ISO standards groups governing the global financial industry, is working with the international organization to ensure “our efforts are coordinated,” Stevens adds.
The very nature of standards clashes with the freewheeling, open source culture that first popularized blockchain technology and created today’s expansive cryptocurrency marketplace. That culture also conflicts with the standards-making process itself—working drafts generally are not shared publicly, for example, and to be part of the ISO standards process, organizations must formally affiliate with an existing working group or create a mirror committee in their own country.
Lemieux acknowledges it’s been difficult incorporating the viewpoints of different stakeholders. “Many of these communities that may have a valuable perspective do not have direct access to the standards-making processes because of their decentralized structure and principles of operation,” she says. At the same time, she adds, “it would be folly … to ignore the views of large open source communities that have contributed to building the infrastructure that ISO TC307 seeks to define.”
“Ultimately, we are aiming to arrive at definitions that represent diverse views, but which abstract away from particular blockchain/DLT platforms or worldviews in order to avoid privileging a particular platform or design,” Lemieux adds.
Once a common terminology is in place, X9’s Stevens argues it will support “needed standardization in the financial services sector.”
“As the sector prioritizes the technical and business areas in need of best practices of standards, this terminology effort will lay a foundation … and lead to less effort and confusion in dealing with terms that are core to setting up any standard,” he says. X9 also is working to identify areas of DLT and cryptography “that will need standards work,” Stevens adds.
Similar efforts also are taking place within the larger ISO system. “There are parallel efforts to develop additional technical standards,” including those focusing on blockchain/DLT reference architecture, privacy, security and identity, smart contracts, supply chains, and interoperability, according to Lemieux. “These will both contribute to, and leverage, the terminology standard,” she says.
Meanwhile, Walch argues that legislators, policymakers, and others with a stake in the blockchain must become better educated, collaborate with outside experts and each other, and move slowly to avoid the kinds of unintended consequences that can come from misusing key terms and concepts associated with the technology.
“This problem is not unique to blockchain technology,” Walch writes. “It takes time for people to figure out how to talk consistently about a new topic, and many times, we never do.”