By Naresh Pema, Enterprise Engineer Open Source
Cryptocurrency may be in its infancy, but like the internet – the technology used to manage and distribute it – its adoption has been far reaching and its implications are enormous. Today, business could not survive without the internet, and in the future, I can’t imagine a business not engaging with cryptocurrency, or one of its underlying technologies at least: Blockchain.
Blockchain is a digitally distributed ledger that underpins all Bitcoin transactions. It offers all parties involved in a business transaction a secure, synchronised record of every sequence in an exchange, beginning to end: from hundreds or thousands of steps online to a single one-for-one payment. Groups of transactions are then grouped together, creating an irreversible chain.
The benefits are many; the risks are few
That very same Blockchain technology can be used to create a highly resistant distributed ledger platform for unparalleled reliability, availability, transparency, immutability and irrevocability in every sector of business. Some of the most interested business sectors are technology, media, telecommunications, and of course, financial services and the public sector.
But Blockchain doesn’t have to be limited to money; it can be used to record and track the transaction of virtually anything of value: the flow of goods, purchases and sales, any digital asset, and more. That’s not just useful for accountability and good governance, but reduces costs by removing the need for third party verification, and can allow the payment or transferal of money to and between the two billion individuals who don’t have bank accounts – a common occurrence in South Africa.
To reduce the risk of testing and implementing such a ledger, the scalability of the cloud can be used, providing additional security, backup, extended reach and unrestricted mobility.
Blockchain technology and the data centre
One of the key benefits of the technology is a complete record of all digital transactions, monetary or otherwise, on command, irrespective of the status of the digital assets or where they’re located – a boon for decentralised data centres. That not only allows for automated audits – Blockchain being unalterable and always available to all authorised parties – but it enhances cybersecurity as well.
Given just how many IoT devices communicate directly with data centres, one of their largest vulnerabilities – the ease at which IoT network addresses can be spoofed – has now become a problem. To offset this, data centres can better authenticate the name and address of a device by verifying it with Blockchain and public notaries.
Blockchain also enables the immediate detection of any unauthorised manipulation of databases, through the likes of SQL command injections. The moment they are tampered with, they would no longer match their ledger counterpart, which itself is protected by cryptographic signatures.
It’s not without regulation
Due to its immense application, Blockchain’s technology (or any cryptocurrency for that matter) was determined very early on to need robust regulation. So, before attempting to implement Blockchain, consider all regulations currently affecting you, like Know Your Customer (KYC), Anti-Money Laundering (AML), etc. Regulations will continue to evolve as Blockchain’s uses do, but already it’s an important consideration for implementation.
The only real concern is that it transfers the issue of trustworthiness from the interaction between software and hardware to the people handling the Blockchain. Different tiers of security, perhaps multi-stage verification, will be required to ensure that what is entered into the Blockchain is trustworthy. Blockchain implementation also requires a staggering amount of compute to implement, prohibitively so, affecting the ability of any data centre to use its compute for productivity workloads.
Blockchain, like TCP/IP was for the internet, is a foundational technology. It will continue to evolve as the internet did, and therefore, it’s hard to know exactly what to expect from it. The idea of a distributed database, where trust is established through mass collaboration and clever code rather than through a powerful institution that does the authentication and the settlement, will have an unforetold global impact. I cannot predict the future, but Blockchain will continue to be innovated upon until it sees fruition on a mass scale.