There are still a large number of questions about the fate of blockchain, however, questions in regards to standards are compelling themselves to the bleeding edge of the discussion. More explicitly, individuals need to realize how to set and maintain the standards for smart contracts. They are basically the self-executing agreements composed of coding lines on the blockchain.
At this moment, the blockchain technology is progressing rapidly and organizations are making custom smart contracts. And it is difficult for the governing entities to stay updated with the development, that’s why it is completely vague that how standards are going to build which are going to serve the whole industry. When companies proceed with the development of smart contracts without any standard to operate, companies will not experience the full-fledged benefits of working with Blockchain solutions. Here are the reasons why we need to regulate smart contracts.
Technological development is moving so rapidly, and various standards can't keep up
As per today’s scenario, smart contracts conventions mostly vary. Everybody is employing their own. For example, companies of supply chain network are using GS1 standards, the worldwide used standard.
There are a lot of other exclusive principles out there. Take Ethereum, for example. They have their own standards for ERC-20, and ERC-721, however, there are additional criteria set up for smart contracts between different ERC tokens.
What's more, when everybody plays by their own set of rules, the essential purpose of having standards is lost.
Norms are a method for sorting out individuals or organizations around a common ground. They give the basis of development and collaboration which can encourage a whole industry.
A single set of norms is required for high-scale acceptance
The blockchain business is achieving a point where a huge number of custom smart contracts are becoming a hindrance to development. The absence of standards makes difficulties in interoperability. This is genuine notwithstanding with regards to ideas that appear to be direct, like how information is stored and shared. Contrarily, blockchain technology may wind up with the same issue as the present web with various cloud databases.
A mixture of smart contracts on a huge number of platforms is hard to handle
As more exchanges and information are processed on blockchains, it's crucial to have an approach to make processes as productive as possible.
If organizations don't begin to consider about measures, they will end up with a situation where everybody will be in the process of making their own smart contracts as per their own requirement, and operability will surely suffer.