Trust and Security Challenges Remain Despite Rising Blockchain Adoptionby Fintech News Singapore October 26, 2020
Blockchain continues to mature this year as corporates move away from experiments towards the development of robust enterprise ready solutions.
While 2019 revealed that blockchain is real and can serve as a pragmatic solution to business problems, 2020 saw leaders no longer considering the technology merely groundbreaking and promising, but rather perceiving it as integral to organizational innovation.
Deloitte, which conducted a survey of 1,400+ senior executives and practitioners between February and March 2020, found that blockchain remains one of the top five strategic priorities in 2020.
This year, the number of respondents who strongly or somewhat see blockchain as broadly scalable ticked up to 88%, compared to 84% last year. Those who said their company will lose competitive advantage if they don’t adopt blockchain also improved to 83%, up from 77% in 2019.
2020’s survey also shows a substantial jump in blockchain adoption, with 39% of global respondents saying they have already incorporated blockchain into production, compared to 23% in 2019.
While financial services have historically been the most active sector in exploring and deploying blockchain, new industries are now increasingly considering adopting the technology. The Deloitte study notes particular interest coming from the life science and healthcare sector, as well as farming and supply chain.
Trust and security challenges remain
Though blockchain adoption continues to rise, many enterprises are implementing the technology without truly understanding its purpose, and as much as 90% of enterprise blockchain projects launched in 2020 are expected to meet a premature end within 18 to 24 months, according to Thales.
Though blockchain holds many potentials including disintermediation, improved security and immutability, the technology also presents a number of risks, which, if not appropriately addressed, could be greatly detrimental to businesses.
In particular, the fact that whoever holds a cryptocurrency’s encryption key actually owns the currency, means that these keys must be protected and held securely so that hackers and fraudsters can’t put their hands on them.
In addition to cryptocurrencies, smart contracts too have their own set of challenges. A smart contract is a computer program that describes an agreement with the ability to self-execute and enforce the terms of a contract. If a blockchain is breached, a smart contract can be altered, breaking the trust of the blockchain and removing the ability for two parties to conduct business without the need for a middleman.
To ensure that a blockchain platform is secure, trustworthy, and protected against cyberattacks, security must be built into the blockchain platform from the start, and should include elements such as strong authentication and cryptography key vaulting, Thales says.
To address these issues, the firms has been providing enterprises with solutions and hardware devices designed to help businesses secure their blockchain infrastructure.
These solutions include the Luna Network Hardware Security Modules (HSMs), as well as the ProtectServer HSMs, which are physical computing devices designed to protect cryptographic keys against compromise while providing encryption, signing, and authentication services.
Thales also provides identities and authentication services such as SafeNet Trusted Access (STA). STA is a fully automated, cloud-based authentication-as-a-service with flexible token options.
Japanese company FreeBit has been amongst Thales’ customers, using Luna Network HSM for the management of private keys on The Log, an off-chain log storage platform that leverages blockchain to counter tampering risk.
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