NIST: what organizations should consider when exploring/developing blockchain networks

Traditional data and operations management across organizations and on the web can involve inefficient transaction reconciliation between siloed databases, password fatigue, and single points of failure. These often result in concerns over interoperability, security, and privacy of data that affect both users and businesses.

With many blockchain projects being explored or developed, organizations should consider what specific needs issuing tokenized representations of existing assets or creating new ones could help meet, who the parties involved are, which desirable features and processes the tokens should implement internally, and how they should be distributed and managed.

In some cases, this pushes organizations to rethink their structures and approaches for identifying and managing risks. This includes finding alignments between individual and collective incentives and organizational design principles that allow for new efficiencies and joint opportunities.

Blockchain technology has enabled a new software paradigm for managing digital ownership in partial or zero-trust environments. It uses tokens to conduct transactions, exchange verifiable data, and achieve coordination across organizations and on the web. Data models with varied capabilities and scopes have been defined to issue tokens. By allowing for the design of programmable digital assets that can represent different forms of ownership, these models enable users to store, move, and create value on top of shared or public digital infrastructures.

NIST announces the publication of, Blockchain Networks: Token Design and Management Overview, which provides a high-level technical overview and conceptual framework of token designs and management methods. The document highlights the different types of tokens and how they are held in custody. It then examines transaction management under three fundamental aspects: validation, submission, and viewability. Infrastructure tools used to develop applications that integrate blockchain networks and second layer protocols are also reviewed.

This document provides a high-level technical overview and conceptual framework of token designs and management methods. It is built around five views: the token view, wallet view, transaction view, user interface view, and protocol view. The purpose is to lower the barriers to study, prototype, and integrate token-related standards and protocols by helping readers understand the building blocks involved both on-chain and off-chain.

Also, the paper presents deployment scenarios and use cases for tokens before concluding with potential breakthroughs in privacy-preserving verifiable data exchange. The terminology, concepts, properties, and architectures introduced in this work can facilitate understanding and communications among business owners, software developers, cybersecurity professionals within an organization, and individuals who are or will be using such systems.

Read the full report

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