Wednesday, January 20, 2021

Blockchain, Security and Interoperability


The technology’s unique aspects and vulnerabilities must be considered during the design process

One of the major selling points of blockchain is the ability to converge it with other core technologies of the Fourth Industrial Revolution in creative ways. Starbucks, for example, announced plans to develop an artificial intelligence-based demand forecast and logistics management system called Deep Brew. The artificial intelligence aspect of the system relies on data aggregated through the Internet of Things from the coffee company’s equipment and products, which can then be traced transparently through blockchain. Many governments have begun lending support to businesses to pursue such efforts by funding and developing the infrastructure necessary for smart cities and smart factories. As with most other technologies, the ultimate level of security that is afforded by blockchain technology boils down to decisions made during the design process. While many aspects of blockchain design, such as evaluating trade-offs among the confidentiality, integrity, and availability of data, are similar to or the same as those that apply to other cybersecurity evaluations, blockchain also involves often unique, added elements such as decentralization, consensus mechanisms, cryptography, and smart contracts.

Given the relatively early stage of the technology’s development, our understanding of blockchain’s vulnerabilities and related best practices grows every day. Its nascent state of development is an important consideration when it comes to scaling applications built on top of blockchain - especially those containing sensitive data. Another important technical consideration where blockchain is involved is interoperability. 

Currently, the options for communicating between blockchain systems are limited - which means often replicating or creating new siloes for information-sharing. There are several efforts underway to explore potential new commercial interoperability solutions, such as such as the open-source project Polkadot, the decentralized Cosmos network, and the Interledger network of exchanges, though they are all still at relatively early stages. Meanwhile standardization efforts, which are key to achieving cross-protocol information sharing, are also relatively immature when it comes to blockchain - and so far suffer from both limited coordination and uptake. In addition, blockchain interoperability needs to be envisioned beyond the infrastructure layer, and should involve platform considerations, like consensus mechanisms and authentication, in addition to business aspects like commercial models and legal frameworks.