Safely Integrating Technologies in an Enterprise Setting With Blockchain
Want to learn more about integrating blockchain technology into various enterprises? Check out this post on blockchain in the enterprise setting.
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It certainly seems that the decentralization virus has spread. It’s hard to get involved in a discussion about technology nowadays, without hearing the term ‘blockchain’ thrown out alongside ideas like IoT or AI. Whilst distributed ledgers were previously limited to simple transactions for the exchange of value (as with Bitcoin), second-generation blockchains have since opened up a wealth of different use cases thanks to self-executing smart contracts.
Insofar as business operations, it’s widely held that the blockchain offering provides a number of benefits — increased security, better transparency, and no need for trusted third-parties to take custody of funds or data. The real issue is a slow rate of integration of blockchain technology into existing enterprises. The seemingly reluctant stance adopted is perhaps due to a lack of understanding of the technology’s potential, or it may be that more education on the matter is needed.
If ever there was a time to reconsider the protocols on which a business relies, especially for customer-oriented businesses, it’s now — the hardening of data protection laws (such as GDPR) should be reason enough to begin researching alternatives to the somewhat flawed centralized data silo model that is abundant today.
Another consideration, particularly for businesses operating in the tech sector, is that collaboration is almost always a necessity, whether it’s integrating open-source modules or another company’s code. In both cases, operating in a sandbox is crucial to protecting the rest of the business’s network. Insofar as collaborating with other entities, there are serious security trade-offs to be made in the Interest of exchanging information.
The centralized hierarchies of businesses make it difficult for two (or more) such entities to interact. In order for them to share technologies, one generally has to compromise their security model by giving another access to their systems. When dealing with millions or billions of dollars’ worth of tech, this is borderline reckless.
There has to be a better alternative. We need trustless systems that facilitate innovation and cooperation, free of counterparty risk. I believe the blockchain offering to be a perfect means by which to achieve this. Through its distributed nature, it permits trustless transactions (of everything from cryptocurrency to files), which do not require third-party oversight.
It’s unwise to simply gloss over some of the pitfalls of current blockchain networks. Firstly, the storage of anything exceeding a handful of bytes directly on-chain is hugely inefficient (not to mention extortionately expensive). Secondly, assuming that one had millions of dollars to pay for storage in this fashion, it comes at the price of having the stored data viewable to anyone (this is, after all, the principle that makes blockchains decentralized).
This is not something that can be overlooked if we wish to see enterprise-grade distributed ledgers take off. I believe the solution lies in combining blockchain technology with a suite of other technologies. How do you ensure the storage and distribution of information in a manner that is cheap, decentralized, and private? By using a distributed storage medium such as IPFS, with the blockchain layer acting as a settlement layer and having its smart contracts govern access to the off-chain storage. This ensures greater scalability in the long run and guarantees that companies wishing to transact trustless and confidentially can do so.
Distributed ledger technology is the next logical step for the sharing of information — both at an individual and corporate level. We need to foster an environment where individuals can safely interact without risking the integrity of their systems. With the combination of off-chain storage and on-chain governance, they can finally begin to seriously consider the adoption of blockchain technology to streamline their operations.
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