Is Blockchain Really That Safe?
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There’s a new favourite in town. Blockchain. It is rising ranks too fast to be the most preferred next-gen technology that everyone wants to use.
With the advantage of being one of the most secure technologies that currently exist, from banks to health care giants, most corporations are looking at implementing the technology for safe use. However, the all is not that glitch-free as it appears. A few instances of blockchain implementation gone all wrong have surfaced.
Most recently, reports of Unocoin, a bitcoin start-up that had to shut down its website because of vulnerabilities have once again brought about the question: is blockchain really safe?
A Big Hype Without Research
While it tops the list of most used words in fintech, not many know what blockchain actually is.
Rajneesh Kumar Chadha, a digital transformation advisor for top banks and a blockchain expert, believes this could turn out to be a problem. “Most people nowadays look at blockchain as a big hype in the financial technology space but without any research. It is like a silver bullet, there’s not much knowledge that’s available to all. Moreover, its use cases have been mostly restricted to cryptocurrencies so far, and it hasn’t been looked at as a separate entity,” said Chadha.
While many institutions are talking about implementing the blockchain technology and running trial programs on the same, the results of most are not known to all. “The results of these practical use cases need to be made public. Nobody is publishing these reports for others to learn. Even the international start-up, Ripple, is said to have worked on an international payments solution, but not many know about what exactly is the result,” added Chadha.
A Long Wait
Compared to the fast progress and spread of the internet, the progress in blockchain has been very slow, said Chadha. Even Chandrashekhar Bhide, Leader for banking, financial services and payments at Praxis Global Alliance, believes that being a nascent technology is also difficult.
“It will take some time for people to understand the technology. Integration is also an important part, so there will be a lot of technical changes that will have to be included in different platforms and it will take time,” Bhide added.
However, there’s another aspect to be thought about. “The practicality and scalability are doubtful. Even ethereum, which is a blockchain-based distribution platform and is touted to be the next big thing, has not been able to scale up quickly. Doing a record number of transactions within a second is not a reality,” said Chadha.
Is it Really Safe?
Discussions are rife about the safety of blockchain. While most agree that blockchain is safe, the question about loopholes hasn’t been missed out. “Regulations are also another thing. Many countries have dismissed it as a volatile industry, so you could be on your own recourse,” said Bhide.
Talking about the Unocoin site failure, Chadha said, “Blockchain here works as the backend storage, on which the application is built. Yes, it’s a matter of concern but it’s not a failure of blockchain.”