Show me the blockchain! No doubt about it, blockchain has become a mega technological trend tasked to save us from the data tsunami of the digital age. First, the financial industry and now, the life sciences/healthcare, consumer goods, energy and others are turning to blockchain. Just recently, Deloitte released the results from Blockchain Survey 2017, a study conducted in November/December 2016 to more than 300 senior executives. The study exposed how blockchain in 2017 is becoming both a “Top 5” priority (according to 25% of respondents) and extending beyond the finance sector (ie. 35% increase in intended deployment in healthcare). To see the full survey results, download this infographic.
All of this is creating great buzz for commercializing and advancing blockchain adoption. Today executives are moving from questions like “What is blockchain?” to more business-oriented ones such as “How, what, when and where?” within their enterprise.
BUT, there is one key question rarely brought to the table: What could go wrong with blockchain? There is a dark side and it has nothing to do with the nefarious uses of bitcoin.
History has taught us that an unintended circumstance of evil derives from something that was meant to deliver good. Perfect example: The Internet. The Internet created the information highway, fueled new economies, revolutionized business operations, and so much more. However, today we see an ugly side – phishing, malware, hacking, scams, and cyber-attacks – that is transforming the Internet from an asset to a liability. We don’t believe, at least I don’t, that the intended consequence of the Internet was to make victims out of believers of a technology that drove economic growth and fostered collaboration. And now, 30 years later, there is the mad dash on how to fix it.
Here we are again. New technology (blockchain) about to the revolutionize the business world, provide transparency and accountability, achieve collaboration and harmonization, deliver increased consumer gratification, eliminate fraud and SO MUCH MORE under the umbrella of trust. All of this sounds familiar, where do we sign up?
But wait a minute, for every good there could be a bad and that holds true for blockchain. A couple of examples:
- Benefit #1: While immutability is one of the best-selling features of blockchain, it may also be its “Achilles Heel.” Why? The benefit and the bad are the same: no entry on the blockchain can be deleted or changed. Why is this bad? Just remember that humans are still behind the blockchain. What happens if a transaction (i.e. data point) is entered incorrectly either un/intended, can it be corrected? Yes AND No.
- YES, technically, based on the groundbreaking research [Stevens Institute’s Dr. Giuseppe Ateniese and Accenture] of the redactable blockchain, the main key holder can edit the original entry.
- And, NO, there will ALWAYS remain the immutable scar containing the erroneous information after the original entry is edited. It will live on the blockchain forever.
- Benefit #2: Autonomous. With autonomous software, it makes it very easy to get the data, publish it once, and leave it there FOREVER. All of this leads to efficiency, optimization and removal of third parties. Let’s consider a nefarious character who has access to unique ID’s containing credit card data, steals them, publishes them to another blockchain where another crooked credit card merchant starts processing them. In an autonomous world, the information gets processed without being flagged until someone realizes money is missing from their accounts.
In both scenarios, the technology’s security did not fail but humans did. So, where in the technology can we safeguard from human misfortune?
Today, we are living the lesson of the Internet again. Many are hesitant to bring up clear and present challenges in order to accelerate adoption in exchange for social responsibility.
As an advocate and believer in blockchain, we need innovators, tech gurus, advocates, experts and regulators to assume their responsibility and address these ethical challenges now. Since we are all very committed to advocating blockchain for everyone, should we not be just as committed to safeguarding the integrity of its core principle: “In blockchain we can trust.”
Are there other examples of potential blockchain pitfalls? Sound off in the comments below.