Blockchains, Cryptocurrencies, DLTs
The noise of of blockchains, cryptocurrency, bitcoins (and even ICOs) has stun the world in the recent times. The world has seen an immense potential in blockchains. The tech giants have been compelled give-in and indulge in ‘blockchaining.’ The smart contracts, secure transactions, and confidential database, have all helped blockchains find their real worth. Prompt use of the humongous technology has left no questions on deeming blockchains as the “the next most important tech”.
It is to be noted that the businesses and other financial organizations are all ready to shake hands with this trending technology. In such a circumstantial scenario, there arises a burning need of regulating blockchains and thus safeguarding the interest and money of each and every investor.
Why so critical?
The commerce arena eyes at straight reasons to regulate and actively inspect blockchains at regular intervals of time. The big-tech houses have also changed their perspective on the same with technological advancements. Proactive and strict regulatory bodies become ‘critical’ in such a scenario where the blockchains are hosting transactions of such huge sums of money, data and smart contracts. The critical nature of the transactions between companies and various organisations definitely calls for an organization/body to be held accountable in case of dispute or dissatisfaction raised by any party involved in a transaction.
Blockchain transaction can only become credible, if it is regulated properly.
Recognition by ‘law’
Every Blockchain should have serious implications of being credible enough in the eyes of law. It should be held accountable in case of a breach or any other unlawful scenario. The data related to a transaction, the money transferred, the existence of consideration and a contract at a digital level, all should be eligible to be a proof or supporting document for a case that gets into any court of law. It is the responsibility of these regulatory authorities to make every blockchain be accounted properly with serious implications of all the relevant data about the transaction to be stored and deposited.
The Benefits It Brings
There is a certain gravity behind blockchains and the hosted transactions. Pertaining to the facts, the need of establishing the criticality of its sustainability out of question. The related data and of course, the blockchain hosting it, all stand equally important when the implications are enlisted for an implementation perspective. The regulatory bodies should have a serious implication over every blockchain about the data retrieval abilities in case of loss of transactions. The date of transaction, the object transacted and its quantity, the time and relevant blockchain data should have nullified possibilities of data loss. And in case, it is lost, the system should be resilient enough to recover from the fault without leading to a “breakdown effect”.
One effective way of maintaining total transparency at transactions within a blockchain is through the KYC. KYC is an efficient instrument for keeping all the crucial data of every customer involved in the transactions. Depending upon the critical nature of the transaction, the personal details held by a KYC should accompany some protective rights of being held private or public, or both (under certain circumstances), by the regulatory authority and the blockchain hosts. There are several levels of KYC, ranging from a partial one asking for minimal details to a full KYC that takes into account everything, related. The rights over that data are reserved by the corresponding authorities and thus these were some implications that held a blockchain accountable in a scenario of such widespread use.
It is not new that there have been central regulatory authorities and other organizations keeping a full check of the blockchains and other distributed ledger technologies (DLTs). They honour the implications that any regulation conduct poses on them. This system has been a wide-deep pool of public, semi-private and private blockchains. The rights to access the information within the blockchain are often reserved (partially or even completely) by the involved parties. So, there should be some innovative concepts and approaches that make sure that none of the transactions ever fail. In case they do, the system should resilient enough to recover back the data as well as the consideration involved within the transaction.
Policing blockchains with blockchains
It might be unorthodox or even difficult to implement, but one can look to innovate at regulating blockchains. As per the raw definition of blockchains, it is a set of nodes which are connected to each other in compliance and total agreement of every transaction. So, the regulatory authorities can also form blockchains which can keep a check or simply ‘police’ every blockchain whether public, partially private or even shielded from blindness.
Blockchain set up as a watchdog to others can keep a check on all the blockchains in mainly two ways. Primarily, they can keep a set of blockchains within one node of their blockchain and locally administer their activities and transactions over a period of time. They can then be connected to clouds for the transfer and storage of data for future use. The same can also be used for references, in case of any complaints registered or an issue raised by the involved parties. This has certain drawbacks of its own. As single node is supposed to take care of all the nodes of blockchain where we don’t know where can the next node of the blockchain be located in this world, this sounds a little ambiguous. And the technology experts, managers might have an ambivalent reaction to this but once executed properly this can solve a lot of problems.
Secondly, the regulatory authority of blockchains can figure out certain nodes of the indexed blockchains to be assigned to one blockchain run by the regulatory authority. This is a little complex method as every blockchain needs to be recorded separately for all the transactions and then we made compliant and updated over the data repository at regular intervals of time and transactions.
Perks of This Innovation
This is a regulatory approach for the times of digital hybridization and total transformation for making the architecture dynamically stable. This helps achieving the true sense of ambidexterity within the resources. The existing technologies for regulating blockchains have had a sharp distinction in time and context, but all of them have faced a common challenge of complete documentation. The position of the data related to blockchains should be managed in a way that they become credible in the eyes of watching bodies and more importantly, the law. On a nut shell, the innovation in regulation brings consistency in control, resilience with decentralization, total responsiveness, secured ownership with traits of adaptability.