ENISA has just published a report on blockchain technology and security.
A blockchain is a distributed ledger which maintains all transactions and assets and is updated by a number of counter-parties. Financial institutions are investing in the technology to automate processes and remove human errors. This may help towards lowering transactional and operational costs by releasing the finance sector from its legacy systems. Despite the potential cost savings, it remains important to assess what the security implications of blockchain implementations might be.
The ENISA report reveals
principles used in the security of traditional systems and in blockchain, such as key management and encryption, are still largely the same. There are however new challenges that the technology brings, like consensus hijacking and smart contract management. Additionally, it highlights that public and private ledger implementations will face different sets of challenges.
To secure business information whilst leveraging blockchain technology, financial institutions should seek to adopt best practices which allow them to:
- Monitor internal activity;
- Automate regulatory compliance;
- Disclose information only to relevant counterparts and authorities;
- And adopt industry level governance procedures which will facilitate the updating of ledger implementations over time.
Further information and the full report can be found here.