Variables Holding Back Enterprises on Enabling Blockchain

Blockchain features deep cryptography and irrevocable transactions as its main proponents for security. Like all architecture, the discovery of vulnerabilities is a step in the positive direction in order to further strengthen Blockchain’s security and overall reliability.

One of the ongoing concerns over Blockchain’s architecture as a launch pad for covert attacks is its participating nodes where attackers could remotely manipulate and exploit a node. A compromised node could be disastrous for a Blockchain architecture as it not only compromises the system but also the information being processed: user identities, transaction records, smart contracts and ledger details are all at risk from vulnerabilities.

In January this year, one of Japan’s largest digital currency exchanges reported significant loss amounting to $534 million worth of virtual assets due to a hacking incident that was carried out in the network. During the investigation, Coincheck suspended activities such as withdrawal and deposits on several digital currencies.

With Blockchain gaining steam towards its maturity, security is a top concern as well as priority based on the McAfee Blockchain Threat Report where it was stated that the Blockchain market will be worth $9.6 billion by 2024. The report also stated that threats and vulnerabilities also pose a major risk on Blockchain’s maturity and rate of adoption. The report accounts that attackers are aggressively preying on the rapid adoption of cryptocurrency based economies as well as the early adopters of Blockchain.

For enterprises and their security, Blockchain security is a factor when it comes to the status of adopting today or wait for the market to further advance its security technologies. There are also other factors that are impacting the rate of adoption towards a Blockchain architecture:

Zero or Lack of Knowledge – Based on decision makers, a shiny nascent technology is demystified when there was considerable research done to merit a tech platform’s benefits and strengths to an enterprise. Without knowledge or the resources to maintain an enterprise foundational technology, there is very little reason to adopt a technology and in this case, Blockchain. When it comes to security, the lack of knowledge or participants to closely monitor its performance, Blockchain becomes a liability despite its transitional impact to a business.

Lack of Knowledge on Blockchain Products – Smart contracts is a feature that helps automate the process of agreement and coverage between parties. For enterprises that are migrating to a Blockchain platform whose purpose is to run a smart contract system, the lack the technical resources to maintain smart contracts is a considerable operational risk. Smart contracts will also require faceted security as its vulnerability could encompass code mistakes, transmission, roots and its nodes.

Public Domain Perception – One of the ongoing concerns for Blockchain adoption is its status as a public and open-source architecture by default. While other Blockchains are built to exist within an internal organization, there are organizations that adopt a Blockchain infrastructure based on existing Blockchain models that are out in the market. When a system is deemed “public”, there is an immediate reservation from users and partners about how safe and private are the user records – given that the architecture is public.

Under the security blanket of belief, a system improves its security based on its exclusive and private use as public platforms that are readily accessible via web are prone to cyber-attacks ranging from hacking, DDOS and malicious scripting.

The Transition from Legacy to Blockchain – Blockchain is the next big foundational technology when it comes to enterprise IT infrastructure. Blockchain could render the existing ERP and information systems legacy as Blockchain also incorporates a number of new wave technology such as smart contracts, the Internet of Things and Artificial Intelligence.

When it comes to Blockchain adoption, the transition is a painstaking process of business benefit study, procurement of a service enabler, resources needed to start and maintain and how Blockchain will affect overall operations. For decision makers, it is a decision that weights on resource and capability to manage the transition.

Blockchain and Where to go from there – When an organization has successfully tested and incorporated Blockchain into their operations, where do they go from there, aside from maintaining day to day operations? The answer could be determined in future-proofing future business needs or having the capability to scale with the business growth. When an organization does not see a sense of business growth in Blockchain, that organization may as well likely stick with their current enterprise technology while they wait for Blockchain to touch base with a familiar business model, to prove its transformational point.

As 2018 is past its halfway point, Blockchain adoption for enterprise has shifted over the years from “Yes or No” towards making sense of the transition and how businesses can build on top of being Blockchain powered.

DynaQuest Technolgy Services is an IT Solutions company that specializes on delivery of knowledge resource and strategic support for companies that are planning to explore business cases with Blockchain.

DynaQuest Technology Services Inc.