Cube Houses, Rotterdam, Netherlands. Image credit: Photo by Boudewijn Huysmans on Unsplash

Blockchain — We Need Standardization

Everyone is talking about the need for clear government regulations in the blockchain industry, clear instructions to define the rules of engagement, and taxation on transactions such as crowdfunding, bounty payments, airdrops, token creation and destruction, etc. This is true of course, but even with clear regulation, to efficiently manage our expense books and reporting, we still need standardization.

Anyone who has ever dealt with crypto exchanges realizes that every exchange has its own unique user interface, API, and reporting format. For any individual or business who tries to report their crypto transactions, this is a huge headache. Even for a small trader, trying to merge yearly trades from several different crypto exchanges with different token types is a tedious task. For a business which conducted a crowd sale denominated in a few different tokens, this is complete madness.

What the blockchain industry needs are standards!

  1. A Standard for Exchange API. 
    Pretty much all crypto exchanges support the same API functions, authentication, checking of exchange rates, order books, issuing trades, etc. But each of them works differently. Why can’t the exchange owners sit together and define a standard exchange API format?
  2. A Standard for transaction reporting. 
    Again, while each exchange keeps pretty much the same data of transactions and account balances, when you try to collect this data, each exchange exports its own data format for the transactions recorded in its database. This makes consolidated reporting of your crypto trades a manual, inefficient and time-consuming task.

On top of that we need a new breed of accounting software. Think about these poor accountants who will need to prepare yearly financial reports. How would they sign off on them without being able to understand that, for example, by holding Bitcoin on a specific date you received Bitcoin Cash, or that paying for an ICO in one token, yielded you a stake in another token several months later.

At the moment, an accountant for a blockchain company has to have a degree in computer science. We need better tools to manage crypto accounting, which are certified by governments so that not every yearly report is a unique project.

I’m hereby calling crypto exchange managers and blockchain developers to sit together and start working on industry standardization since blockchain will never get mainstream without it.