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Technology Experts Question Blockchain Promises

Last Updated March 4, 2021 4:56 PM
Justin OConnell
Last Updated March 4, 2021 4:56 PM

One of the many promises of blockchain is its ability to fight against fraud and secure our globally connected systems. But not everyone is buying it. Two prominent security minds recently put their skepticism about the power of blockchain to digital print.

“For a transaction to be trusted – whether the person is accessing the blockchain to make a transaction in the ledger, or going online to Overstock.com to buy a new TV using Bitcoins –there needs to be a strong understanding that the person involved in the transaction is the person authorised to perform it,” writes Michael Lynch, CSO of InAuth. “There also must be validation that the device itself is “clean” and doesn’t contain malware or crimeware, and it isn’t being spoofed or potentially used as part of a velocity attack.” Mr. Lynch argues  that blockchain alone cannot solve authentication problems.

The CEO says this requires additionally “sophisticated device technology”, which is not inherent to blockchain technology. “Without multi-factor authentication in place, blockchain may not necessarily prevent someone from gaining access through fraudulent means to the ledger, fooling the system into believing they are someone else,” writes the expert. “Therefore, for any digital transaction, the access point at which a person is using a device (mobile phone, PC, tablet, etc) to enter into the blockchain to conduct legitimate business – or to try and commit a nefarious act – still remains pivotal to the fraud-prevention, cybersecurity equation.”

He concludes: “…In the meantime, organisations should be looking to implement advanced device intelligence and authentication solutions to better protect their customers and their organisations right now, so they are positioned as leaders in their space when and if blockchain becomes the new global financial paradigm.”

Mr. Lynch isn’t the only executive to recently put a damper on the blockchain euphoria. “… I looked in­to blockchain tech­nolo­gies care­ful­ly and I’ve end­ed up think­ing it’s an over­pro­mot­ed niche sideshow,” writes Tim Bray, the Canadian software developer behind XML specification.

While he does like the blockchain conceptually, he doesn’t “think the world needs it.” He elaborated on his opinion.

“I’m not stuck on the tech­ni­cal ob­jec­tion­s, for ex­am­ple the laugh­ably slow transactions-per-second of most real-world blockchain im­ple­men­ta­tion­s. Where I work, scal­ing out hor­i­zon­tal­ly to sup­port a mil­lion TPS is ta­ble stakes,” he writes. “I could maybe get past the socio-political is­sues, the mis­guid­ed no­tion that in civ­i­lized coun­tries, you can route around the le­gal sys­tem with “smart contracts” (in ad-hoc pro­ce­du­ral lan­guages) and al­go­rith­mic cryp­tog­ra­phy.” He is not impressed by big business investment in blockchain.

“Some­thing on the or­der of a bil­lion dol­lars of venture-capital mon­ey has flowed in­to the blockchain start­up scene,” he writes. “And, what’s come out? I’m not talk­ing about plat­forms that are “ready for business” or “proven enterprise-grade” or “approved by reg­u­la­to­ry authorities”, I’m talk­ing about blockchain in pro­duc­tion with jobs de­pend­ing on it.” He notes his age means he has some perspective.

“I’ve seen wave af­ter wave of landscape-shifting tech­nol­o­gy sweep through the IT space: Per­sonal com­put­er­s, Unix, C, the In­ter­net and We­b, Java, REST, mo­bile, pub­lic cloud,” he writes. “And with­out ex­cep­tion, I ob­served that they were ini­tial­ly load­ed in the back door by geek­s, with­out ask­ing per­mis­sion, be­cause they got shit done and helped peo­ple with their job­s.”

He adds : “That’s not hap­pen­ing with blockchain. Not in the slight­est. Which is why I don’t be­lieve in it.”