The blockchain is generally associated with Bitcoin and other cryptocurrencies, but these are just the tip of the iceberg. This technology, which has its origins in 1991 when Stuart Haber and W. Scott Stornetta described the first work on a cryptographically secured blockchain, did not become noticeable until 2008, when it became popular with the advent of Bitcoin. But currently its use is being demanded in other commercial applications and an annual growth of 51% is projected for 2022 in various markets, such as financial institutions or the Internet of Things (IoT), according to MarketWatch.
Why is the blockchain so secure?
Being a distributed technology, where each network node stores an exact copy of the chain, the availability of information is guaranteed at all times. In the event that an attacker wanted to cause a denial of service, they would have to take down all the nodes on the network, since it is enough for at least one to be operational for the information to be available.
On the other hand, as it is a consensual registry where all the nodes contain the same information, it is almost impossible to alter it, ensuring its integrity. If an attacker wanted to modify the information in the blockchain, they would have to modify the entire chain in at least 51% of the nodes.
Blockchain technology allows us to store information that can never be lost, modified or deleted. Finally, since each block is mathematically linked to the next block, once a new one is added to the chain, it becomes unchangeable. If a block changes its relationship with the chain, it breaks. That is to say, that all the information registered in the blocks is immutable and perpetual. In addition, each network node uses certificates and digital signatures to verify the information and validate the transactions and data stored in the blockchain, which makes it possible to ensure the authenticity of said information.
In this way, we can think of blockchain as a scribe. A means to certify and validate any type of information. A reliable, decentralized registry, resistant to data manipulation, and where everything is registered.
Today, we are used to centralized models. We give all our information to companies like Google or Facebook to manage it, we send all our messages through the Telegram or WhatsApp servers so that they take care of sending them or we spend fortunes on notaries and institutions to certify and save our deeds or important documents. In blockchain the data is distributed in all the nodes of the network. As there is no central node, everyone participates equally, storing and validating all the information. It is a very powerful tool to communicate and store information in a reliable way; a decentralized model where the information is ours, since we do not depend on a company that provides the service.
What does blockchain technology offer?
The greatest advantage offered by blockchain technology is the reduction of costs, but to this are added some more: trust, security, efficiency, veracity and transparency. With all of them, the blockchain forms a technology to be used by companies to advance together with the new innovations offered by the market.
- Veracity: The chain of blocks allows you that the information stored in these blocks (data or signatures of data/documents/files) cannot be falsified.
- Security: The information will be stored securely so that, if something unforeseen ever happens, you will not lose that information as the network of nodes guarantees its availability. This is interconnected with the third advantage: trust.
- Confidence: The fact of obtaining security, as well as the impossibility of falsifying documents, generates confidence both in your employees and in the clients and suppliers of the company.
- Efficiency: It forms another of the essential advantages. The ability to have documents at any time is very positive.
- Transparency: It is a transparent technology, which makes it possible to search and locate your documents without the need to go through a confusing and complicated process. This is also linked to another advantage that allows you to use blockchain technology: ease.
- Ease: It can be hired almost as a “commodity” service, so using it in a system or application is feasible without the customer having to go into implementation details.
What do you think of all these advantages? Are you aware of them? Do you know if it is applicable to your problem? Blockchain technology has a lot to offer your company. If you implement it, you will be part of the great development that technology is experiencing.
That’s why read: MITRE Shield and the Active Defense , and remember that leveraging them together allows organizations to create an active defense to better address adversaries.
Interest in blockchain continues to grow, but there is still a significant gap between the hype and the reality of the market. Only 11% of CIOs indicated that they have implemented or are planning to implement blockchain in the near term , according to Gartner’s 2019 CIO Agenda Survey of more than 3,000 CIOs, this may be because most of projects do not go beyond the initial experimentation phase.
In order to successfully carry out a blockchain project, it is necessary to understand the root causes of failure. Check out the 7 biggest blockchain problems and avoid them!
1. Misuse of blockchain technology.
Gartner has found that most blockchain projects are developed solely to record data on blockchain platforms via decentralized ledger technology (DLT), ignoring key features such as decentralized consensus, tokenization, or smart contracts audit. “DLT is a component of the blockchain, not the entirety of the blockchain. The fact that organizations don’t use the full set of blockchain features as often raises the question of whether they even need blockchain.” “DLT is fine to start with, but the priority for CIOs should be to clarify blockchain use cases as a whole and move to projects that also use other components.”
2. Assume that the technology is ready for use in production.
The blockchain platform market is huge and largely made up of fragmented offerings trying to differentiate themselves in various ways. Some focus on confidentiality, others on tokenization, others on universal computing. Most are too immature for the large-scale production work that comes with accompanying systems and requirements, security, and network management services. However, this will change in the coming years. CIOs should monitor the evolution of blockchain platform capabilities and align blockchain project duration accordingly.
3. Confusing a protocol with a business solution.
Blockchain is a basic technology that can be used in a variety of industries and scenarios, from supply chain to management and medical information systems. It is not a complete application, as it must also include features such as the user interface, business logic, data persistence, and interoperability mechanisms. “When it comes to blockchain, there is an implicit assumption that base-level technology is not far off from a full application solution. This is not the case. Blockchain is understood more as a protocol to perform a certain task within a complete application. No one will assume that one protocol can be the sole foundation for an entire e-commerce system or social network.”
4. View Blockchain simply as a database or storage mechanism.
Blockchain technology was designed to provide a trusted and immutable record of events arising from a dynamic collection of untrusted parties. In its current form, blockchain technology does not implement the full “create, read, update, delete” model found in conventional database management technology. Instead, only “create” and “read” are supported. “CIOs should assess the data management requirements of their blockchain project. A conventional data management solution might be the best option in some cases.”
5. Assume that interoperability standards exist.
While some blockchain technology platform providers talk about interoperability with other blockchains, it is hard to imagine interoperability when most platforms and their underlying protocols are still being designed or developed. Organizations should view vendor discussions regarding interoperability as a marketing ploy. It is supposed to benefit the competitive position of the provider, but will not necessarily provide benefits to the end-user organization. “Never select a blockchain platform with the expectation that it will interface with next year’s technology from a different vendor.”
6. Assume that smart contract technology is a solved problem.
Smart contracts are perhaps the most powerful aspect of blockchain enabling technologies. They add dynamic behavior to transactions. Conceptually, smart contracts can be understood as stored procedures that are associated with specific transaction records. But unlike a stored procedure in a centralized system, smart contracts are executed by all nodes in the peer-to-peer network, creating scalability and manageability challenges that have yet to be fully addressed. Smart contract technology will still undergo significant changes. CIOs shouldn’t plan for full adoption yet, but run small experiments first.
7. Ignore governance issues.
While governance issues on private or permissioned blockchains will generally be handled by the blockchain owner, the situation is different with public blockchains. “Governance on public blockchains like Ethereum and Bitcoin is primarily aimed at technical issues. Human behaviors or motivation are rarely addressed. CIOs need to be aware of the risk that blockchain governance issues can pose to the success of their project. Especially large organizations should consider joining or forming consortia to help define governance models for public blockchain.”
According to a survey by the consulting firm Deloitte, 74% of the companies consulted see blockchain as an improvement for the business and plan to invest in this technology, while almost half of these already have some implementation of blockchain in their business.
Undoubtedly, blockchain makes the immutable and decentralized layer that the Internet has always dreamed of a reality. A technology that allows you to remove trust from the equation and replace it with mathematical truth.
Everything is hackable online as no system can be called perfect. Decentralized networks have their loopholes, too and some blockchain risks can’t be easily eliminated. Nevertheless, cyber security professionals can make a whale of a difference by minimizing them.
