Blockchain: Why Security Hyper-Vigilance is Recommended

Blockchain may be following the course of bitcoin, it’s well known digital cash use case that peaked in December 2017. Yet the technology has come a long way and shows promise for numerous use cases besides cryptocurrency; including identification, smart insurance policies, real estate and national security. Organizations that choose to move forward with blockchain should proceed with caution. Why? Because they will need to address a significant number of technical, operational and security challenges. 

The most important question for business leaders to ask and answer before launching a blockchain project is, “Does it provide a business advantage?” Expected benefits include increasing sales, improving transparency and enhancing customer experience, but the long-term risks and gains are unclear. Given the variables, unknowns and disruptive qualities of blockchain, developing a business case is difficult but essential. Analysis is complicated by the fact that many blockchain objectives can be accomplished with less risk using traditional technologies. 

Organizations that push forward with blockchain will need to make, and revisit, decisions continuously. A few of the key business considerations are:

• Choosing between public and private blockchains, which involves access control, privacy, security and computing power.
• Operating with lack of standards related to governance, regulations, interoperability, protocols and privacy. 
• Procuring the right talent in areas of technology, law, security and financial exchange.

From a security perspective, it’s far better to build security in from the start using a multilayered approach. Bolted-on security and off-the-shelf approaches won’t work. A tailored strategy is the best way to protect the software development lifecycle, blockchain components, connected systems, users, passwords and credentials. Also, blockchain architecture is dynamic by nature. Extra security vigilance is necessary to address current requirements with solutions capable of adapting as requirements change.

Blockchain’s long-term role in digital transformation is to be determined, although it’s likely to be a key player. Like other nascent technologies that are brought into a business, blockchain adoption requires thorough due diligence and planning with security and risk management top of mind.

Learn more about blockchain adoption rates, use cases, business considerations, security priorities and best practices by reading Blockchain – Business and Security Considerations.