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Seven reasons blockchain isn’t ready for mainstream deployment

Scott Carey | June 14, 2016
A clear definition of blockchain is still needed.

3. Key Management

Bennett talked about the recent raft of cyber thefts through the global payments processor SWIFT and how blockchain won't be able to prevent these sort of issues.

"You are talking about a 'write-once' unchangeable record here, there will be people that make mistakes," she said. "There will be fraudulent transactions that get onto the chain because, where there is money, there will be fraud. It may be easier to detect on a chain but a chain cannot prevent fraud.

"People were saying SWIFT issues wouldn't have happened on the blockchain. No, SWIFT was about credentials theft and you can steal someone's keys for a chain. You may be able to track it better but you won't be able to prevent it."

4. Access rights and permissions

Bennett set out a list of questions IT teams will need to answer when it comes to blockchain.

"How many sets of keys do you have to manage for permissions and encryption. How do you revoke trust? How does the chain function? Which consensus algorithm do you use? Is encryption used? How many nodes are there? Is the storage on or off the chain?

"When you talk to vendors these are all important questions and you will find many of the startups can't answer these questions."

5. Enterprise deployment

Just because the technology looks ripe for enterprise use cases, like payments, remittance, post-trade processing, and compliance ledgers, it doesn't mean they are easily applicable to an enterprise IT environment. As Bennett said: "Overall the technology is in its infancy."

"Large scale adoption is five to ten years away because you have a combination of technologies that are quite immature. So you have companies involved that have extremely bright people working on them but have never encountered enterprise requirements when it comes to scale and security and of course things need to interoperate."

6. Storage

Anyone looking deploy blockchain technology will need to make a decision regarding storage.

Bennett says: "You can have storage on the chain itself, elsewhere or even in a parallel blockchain. That is something I am seeing increasingly under investigation. The moment you have a lot of computational intensive transactions that also need to be replicated across a number of databases you have latency issues, so you might want to take some of the storage or computation off chain."

7. Agreed common standards

Lastly, Bennett said there will need to be agreement on common standards and processes. Although there are moves to do this such as the R3 consortium which is working with many of the world's biggest financial firms -- collaboration is a challenge. "When did you last get over forty banks agree on a single identical process?" she asked.

 

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