Every time you browse the internet, you are greeted with a lot of information. Well, isn’t it what the Internet is about in the first place? Most often we get a lot of information that we sometimes find hard to process. Interestingly, cryptocurrency and its underlying technology, the blockchain technology continues to hit the news with speculations and regulatory issues a major part. This has led a lot of persons to wonder if the technology is not being overhyped.
Proponents of the blockchain technology have campaigned tirelessly to show how this technology would revolutionize the way we do things. Some other factors have helped the blockchain technology gain more ground. Factors such as the brazen manner with which hackers have decimated networks, like the recent heist that occurred in a Bangladesh Central Bank where $81 million was stolen via SWIFT’s network and Tesco’s $3.1 million scam from 9,000 customers. These data breaches have led to a clamor for more secure networks and blockchain has benefited a lot from it.
Arguments in support of The Blockchain
Blockchain is a digital ledger in which records are made chronologically and publicly using cryptography. Proponents of blockchain technology have stated in glowing terms how blockchain would benefit several areas of our lives including Healthcare, Insurance, Finance, Supply Chain and so on. Their point has been predicated on some factors, such as;
1. That blockchain is a distributed public ledger
Being a distributed public ledger implies that the technology is copied on all devices on a particular network (public or private).
2. That blockchain is almost tamper and hack-proof.This claim stems from the strength of cryptography. Users have a public and private key without which transaction would not be possible.
3. The data on a blockchain framework cannot be altered, manipulated or deleted.
It is believed blockchain cannot be hacked, that hacking a network would mean taking-on and out computing every computer on that network, something that would be very difficult to accomplish considering the time, energy and cost required for achieving this feat. Can we throw our hands in the air and say “Aha, an end to fraud and data theft, an end to system and network failure? I bet not.
Arguments Against the Blockchain Technology
Blockchain is not only overhyped, it is untrusted and misunderstood. One cannot trust a technology that has not been tested. Let us take a look at the theft at the Bangladesh Central Bank, what would blockchain have done that Swift’s network did not do? The authorization for the transfer of the money was through SWIFT’s messaging system to the New York Federal Reserve Bank.
It scaled through Fedwire payment protocols to its recipients. A similar wire transfer had occurred with FIFA and at that time, the source of fraud was not a security failure but an insider activity. No security can be stronger than unscrupulous operators; a network is as strong as it’s operators. Yes, blockchain can provide a history of money transfer but the technology’s trail stops when the money is withdrawn over the counter.
What happens when an authorized and authenticated request is made over a network, would the technology be able to distinguish which is fraudulent and which is not? Technologies cannot tell motive.
Blockchains failure lies more with the fact that it has failed in protecting its own platforms. The Bitfinex hack where $66 million was stolen in August 2016 leaves a cautionary approach to its use. More interesting is the fact that the money has not been recovered.
If an exchange could be so hacked and the money not recovered, why should we believe in the hype that blockchain is the answer? Again, some proponents would say the hackers succeeded by penetrating Bitfinex’s security and not blockchains security (that blockchains core remained hack proof, true), how can we adopt a technology that cannot work in sync with other similar technologies? It has been proved over and over that blockchain frameworks have become susceptible when services are layered on them.
Blockchain is not the only encrypted network, but it is believed that its distributiveness is an added advantage. The distributed nature of this technology is no different from having several copies of an application on different devices recording same information. Replication does not necessarily make it more secure, it slows the speed at which interaction between these devices would occur as the network expands. Current systems and processes that rely on high-speed transfers cannot, therefore, rely on such a network or framework.
Having made these points, let it be made known that blockchain is a great technology whose potentials can be harnessed. However, if the technology is not well understood, it’s use and adaptability is questionable. When it is added to other technologies, it becomes weakened and provides a leeway for hackers. These means it cannot yet provide stand-alone security as proposed. Blockchain should be developed as a service-oriented technology in a particular service sector firstly before being used to render such services.
While the quest for improved security systems is paramount, every other technology should be improved upon as blockchain alone may not prevent hackers and fraudsters who seem to be a step ahead.