OIX: A Pragmatic Approach To Distributed Ledgers


Blockchain and other ‘crytpo-tech’ discussions are all the rage, and rightly so. Distributed ledgers, shared among all computers running the same protocol, present a very tempting solution to the problem of how to enable many parties using a multitude of different systems to deal with high volumes of items that need to be tracked individually or whose status changes frequently. Today’s centralised ledger systems (e.g. banks, stock exchange, the DVLA) are clunky and expensive to maintain by comparison.

But persuading all participants to adopt an alternative to a centralised system is always going to be hard work. Among the many benefits it’s going to be tough to find a single catalyst to unite them. To complicate matters further, most public bodies represent both customers and suppliers in many scenarios that are ripe for a distributed approach, and here regulation looms large.

In the EU we have the problem that an Englishman’s red tape is a Frenchman’s business plan – the traditional conflict between the approach to regulation in common law countries like the UK and Ireland, and the civil law countries of the continent. In the common law world, we have been traditionally free to act unless the courts or Parliament says otherwise; while others wait for the State to give the green light, often in impenetrable detail that adds complexity and further delay.

Nowhere is this more apparent than in the field of identity and privacy, where EU member states are still bickering over the ambitious General Data Protection Regulation after many years. And it’s ominous to note that authenticating participants is a key challenge in the context of distributed ledgers.

In these circumstances, the OIX offers a pragmatic safe harbour for anyone seeking to solve the authentication problem in a distributed environment. Public and private sector players can observe and contribute to developments in open projects against an open set of criteria, while any commercialisation step occurs independently and subject to any formal regulatory approvals that might be necessary. That way, all participants can openly and efficiently develop an early sense of what is feasible from a regulatory perspective as well as commercially and from a user’s standpoint, rather than waste time on projects that might be futile on either front.

OIX Guest Blog:  Simon Deane-Johns, Keystone Law