Security and performance are key to exploiting BlockchainBlog
Yes, decentralisation, distribution, or democratisation of transaction capabilities as exemplified by blockchain will bring irrevocable change to the financial services industry. But not quite yet.
While the promise that blockchain can deliver cannot be disputed, adoption is still very much in the trial and error phase as individual organisations and consortia grapple with the early stage challenges of security, scale, and performance.
As the concepts move to reality, the broader IT marketplace will need to identify the optimum models, platforms, and services needed to allow for rapid global rollout.
Meeting the needs of the masses
The peer-to-peer trust relationships on which blockchain systems rely offer significant benefits versus the slow, cumbersome, and high cost centralised transactional model currently in place. However, a fundamental impediment is the requirement for real-time micro-transactions across an infinitely distributed environment that an area like the Internet of Things (IoT) presents. The ability to compute vast numbers of such transactions at micro-second velocity is still in its infancy.
In addition, while the distributed ledger is less hackable than traditional centralised data management systems, it does create its own security challenges as the need to scale out and improve performance becomes exponential. It is imperative that any blockchain system and operating model are auditable and fully locked down. Addressing the ongoing risk from cyber attacks in a system that could be processing trillions of dollars will be key to ensuring that irrefutable trust can be established and maintained. Also, inherently, the distributed model is network and platform dependent. This means that the necessary security and volume processing capabilities must be built into – or, at least, supported by – the rapidly evolving networks and cloud models of today.
For blockchain to truly upend the financial services industry, organisations will need to be able to use a highly secure, seamless, ubiquitous, and high performance network fabric.
All networks and their distributed ledger clouds are still a way off from providing the ideal environment – as is the regulatory environment from understanding blockchain and building sufficient regulation and legislation to realise its full potential.
No need to wait
That’s the big picture. In the meantime, it’s entirely possible today to create and pilot individual distributed ledger systems as part of the process of migrating to a fully democratised financial services paradigm.
However, to ensure that you are taking the bigger picture and required roadmap for live deployments into account, you do need to involve a technology partner at the early design stage of whatever project you envisage. Look for one that has both the skill and the means to engineer for you now an individual, enterprise-strength platform that will enable you to effortlessly exploit the ubiquitous platform on which the entire industry will run in future.
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