Common Sense Standards Will Speed Cryptocurrency Adoption

Over the past several weeks and months, an especially alarming amount of poorly written code has resulted in at least $500 million dollars worth of losses, and I believe the number may potentially be even more. It’s caused some thought-provoking discussion. For example, here’s a thread on the Bitcoin Forum about it (my username in the thread is BenOnceAgain): Bad Code Has Lost $500M of Cryptocurrency in Under a Year

Just a moment...

bitcointalk.org

One source asserted: “There was a bug, on the withdraw page. But this check was only on java-script client side, you find the js which is sending the request, then you inspect element — console, and run the java-script manually, to send a request for withdrawal of a higher amount than in your balance. Bitgrail delivered this withdrawal. How many people did this? Who knows.”

Yes, you read that correctly. Client side JavaScript was the only balance check performed when withdrawing nano! Having such a function in the front-end website code would be bad enough, but in the user’s browser?!? That wouldn’t pass on some online checkers game.

Come on, cryptoverse, this is money we’re talking about! It’s really important to have rigorous, professional standards and best-practices in your:

• code (client side javascript?!? Need I say more?);
• infrastructure (withdrawals should be passed to a backend system that does its own set of checks);
• quality assurance (this code should have been caught well before going live);
• security audits (again, to identify the things I’m listing here and quite possibly many more); and
• business processes (unusual activity should alert humans to investigate).

I am a strong supporter of an open and fair market: true free-market capitalism (as opposed to the horribly corrupted form that our society is structured around currently). In a pure and fully free market, services such as Bitgrail would quickly die out because their technical errors would cause customers to leave. However, when dealing with real money, and in consideration of the bad press that these events bring to the entire cryptocurrency industry, I believe that there is more that should be done.

Do you own research, buyer beware, do not risk more than you can afford to lose, and diversification are all very important considerations with any investment. Though I prefer to view most cryptoassets as currency, rather than an investment, these important tenets of responsible financial management are crucial to always practice. But as a market matures, it expects and receives more.

Another important component that will reinforce trust and professionalism in the cryptoasset industry is voluntary standards. We are offering the world the opportunity to change one of the most fundamental constructs, mediums of exchange and stores of value. Distributed ledger technology asks people to trust the code, the network, instead of a counter-party. But why should people trust the code when careless practices such as the one I describe in this article, as well as the others that we know about, continue without any real solution?

Through BTRIC Institute, I am committed to assembling the current best practices in use across the cryptocurrency ecosystem. There are a lot of good, open-source information available already, but it needs to be collected, organized into cohesive standards, subject to open review, and kept maintained and current.

Standards in certain areas, to assess certain levels of quality could then be voluntarily adopted by any project — cryptocurrency, ICO/ITO, exchange, or other crypto business. I envision an Internet Engineering Task Force like process where standards can be proposed and vetted by peers and other members of the industry. All standards will be completely free for anyone to use for any purpose.

This approach has several benefits. First, it can create a baseline for projects to follow. Compliance with any standard would be voluntary, not required, but if a standard has been shown to significantly help in a certain area, it may become de facto expected of any serious project or business.

Second, especially in the areas that are likely to come under the focus of regulators around the world, standards that are developed and implemented voluntarily by the ecosystem stand a good chance of being factors that are seriously considered by regulators. By getting ahead of the curve, there is more of a chance to shape these regulations, rather than be shaped by them. My prior experience before forming BTRIC was in advocacy before regulators and law makers. They are often inclined to work with industry if they can show that they’re taking steps — even voluntary ones — to deal with the issues.

I believe, ultimately, developing open, voluntary standards for certain things will improve the cryptocurrency field for all participants, from Bitcoin users to the largest exchanges and mining operations. That’s why I’m asking everyone involved in this community to consider supporting our launch.