The beauty of blockchain technology lies in the fact that it allows you to see a verified, accurate and un-tampered with an account of transactions. These transactions could be payments, but not necessarily. They could be simpler exchanges of information too.
This technology has been around for a couple of years and basically shares a record of transactions that are maintained on a network of computers on the internet – rather than a centralized authority. When this technology is used on a large scale, however, especially in corporate, it raises question marks over whether it can cope with the increased volumes on a daily or even hourly basis with the same veracity. The blockchain technology is only as valuable as it is secure.
The two main concerns of this technology are scalability and security:
- Security is a concern mainly because blockchain implementations such as the financial services require a digital wallet. This dependency is a potential risk.
- The decentralization of control and relative freedom of access and has ultimately fueled black market trading.
- The setting up of private blockchains places great responsibility for securing access to the nodes. It’s important to determine the trusted parties and the blockchain system administrator needs to make the security decision.
- While the risks of building a financial market or other infrastructure on a public blockchain may give a new entrant pause, private blockchains offer a degree of control over both participant behavior and the transaction verification process.
Blockchain systems provide transparency and usability but at the same time required enough security considerations. Just as businesses decide which systems are better hosted over the internet or intranet, they will have to take a call regarding the use of blockchain technology as well. In general, systems that require fast transactions, the possibility of transaction reversal, and central control over transaction verification will be better suited for private blockchains, and others that benefit from widespread participation, transparency, and third-party verification will flourish on a public blockchain.