Blockchain technology has been slowly working its way into enterprises for years now
However, the process has been slow and fraught with challenges. Many companies examine decentralized tech and quickly decide it isn’t right for them. Hurdles, including security questions, transparency concerns, and the potential for capital loss, are simply too much of a gamble. Fortunately, new protocols are being developed that look to address many pervasive problems.
Blockchain In The Modern Business Landscape
Global businesses are beginning to wake up to the potential for blockchain technology to revolutionize their operations. Recent developments have made decentralized networks increasingly attractive to enterprise companies. A 2020 survey by Deloitte reported that 55% of C-level officers identified blockchain as a crucial part of their organizational infrastructure in the coming years.
However, the truth is that there are still formidable barriers to adoption. Most organizations do not want to bear undue risk by working within systems that can theoretically be manipulated. And in its current state, even the most entrenched and secure enterprise-focused blockchains can be exploited if a third of the active nodes become malicious. Considering that many companies are looking to use private blockchains with selected validators, this is a genuine concern. In fact, blockchain accountability qualms and a turbulent regulatory basis stand as two chief obstacles to market growth.
If a business decides to go the public blockchain route, there are other problems. Popular Proof-of-Stake (PoS) blockchains like Ethereum attempt to dissuade bad actors through a process known as “slashing.” Slashing forces rule violators and attackers offline and liquidates their staked assets. It’s a good idea in theory, except that innocent nodes can be misidentified as malicious due to improperly set up nodes and even glitches, leading to loss of funds.
A lack of certainty regarding these issues often keeps enterprise organizations from incorporating blockchain systems into their infrastructure. Fortunately, this is likely to change, as blockchain technology is evolving rapidly. It started with Bitcoin, providing a means to transfer wealth peer-to-peer. Next came Ethereum, and the advent of smart contracts used to disintermediate third parties. More recently, technologies such as Delegated Proof of Stake (DPoS) have allowed for a massive reduction in energy use as well as the ability to realistically scale for mass adoption. There are even advanced Byzantine Fault Tolerant protocols such as the HotStuff standard, adopted by the facebook-backed Diem stablecoin, which introduces absolute transaction “finality,” ensuring transactions are impossible to revert. But these systems still face challenges in pursuit of wide-scale adoption.
What Comes Next
By building upon all of the aforementioned developments, new techniques are being devised to finally create a product that meets the unique needs of enterprises and is ready for the world’s leading companies. The addition of on-chain Forensic Monitoring stands to finally solve some of the remaining validation issues that are discouraging would-be adopters. These analysis tools allow for the networks to actually identify attackers and even differentiate them from nodes merely having technical issues or display byzantine faults as a result of human error. This protects honest users as well as the network as a whole. Furthermore, by disabling actual malevolent nodes, the network can stay completely operational even if more than a third of nodes become corrupt.
Now, a corporation can implement blockchain into their finances or supply chain management system without concerns over security or reliability, even if their network is private and relatively small. This isn’t merely rhetorical either, enterprise-centric chains like XDC Network’s XDPoS 2.0 protocol have proposed and are set to integrate the open-source forensics monitoring system, and Facebook’s Diem has shown interest in its adoption. Thanks to its open-source nature, the system can be applied to existing or entirely new blockchains, so there isn’t a terribly high barrier for companies to complement their existing blockchain systems. The XDC Network’s Accountability and Forensics in Blockchains: XDC Consensus Engine DPoS 2.0 outlines this technology and its benefits.
Ultimately, these advancements are likely to encourage a new wave of business use cases for digital assets and blockchain technology. As mentioned, most major companies are risk-averse. They have trepidation about working within unaccountable, unmonitored systems. But if these issues can be demonstrably navigated, then there is a new path to embrace this decentralized technology. New philosophies on how to manage these networks are opening the door to the future of a new type of commerce and using the latest on-chain forensics tools is the key to making these products work for big business.
About The Author
Dr. Fisher. Yu is a postdoctoral researcher whose work includes coded distributed computing, distributed machine learning, and blockchain. Dr. Yu co-authored the “XDC Consensus Engine DPoS 2.0” whitepaper for the XDC Network, a delegated proof of stake consensus network (XDPoS), enabling hybrid relay bridges, block finality, and interoperability with ISO 20022 financial messaging standards, making XinFin’s Hybrid architecture enterprise and developer-friendly.
Featured image: ©Jamesteohart