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(window.webpackJsonp=window.webpackJsonp||[]).push([[53],{158:function(e,t,n){"use strict";n.r(t),n.d(t,"frontMatter",(function(){return a})),n.d(t,"rightToc",(function(){return r})),n.d(t,"default",(function(){return l}));n(0);var o=n(186);function i(){return(i=Object.assign||function(e){for(var t=1;t<arguments.length;t++){var n=arguments[t];for(var o in n)Object.prototype.hasOwnProperty.call(n,o)&&(e[o]=n[o])}return e}).apply(this,arguments)}const a={id:"understanding-and-mitigating-practical-blockchain-risks",date:new Date("2020-03-12T10:37:58.000Z"),title:"Understanding & Mitigating Practical Blockchain Risks",subtitle:"Find out about the key practical Blockchain risk factors to consider before implementation.",tags:["blockchains","enterprise blockchain","practical blockchain"],keywords:["practical blockchain","blockchain","enterprise blockchain","enterprise blockchain adoption","blockchain adoption","consensus","blockchain in enterprise","blockchain enterprise adoption","Bitcoin","Ethereum","hyperledger","hyperledger fabric","hyperledger besu","corda","r3 corda","blockchain data pipeline","data pipeline","blockchain integration","blockchain analytics","practical blockchain risks","blockchain risks"],description:"Find out about the key practical Blockchain risk factors to consider before implementation. Learn more about mitigating Blockchain risk at Ocyan.",hero:"/images/posts/ocyan-blockchain-12032020.png",author:"Anton Christoff",authorTitle:"CSO of Ocyan",authorURL:"https://www.linkedin.com/in/antonhristoff/",authorImageURL:"/images/posts/anton.jpg",authorTwitter:"antonhristoff"},r=[{value:"Types of Blockchain Risk",id:"types-of-blockchain-risk",children:[{value:"1) Standard Risk",id:"1-standard-risk",children:[]},{value:"2) Value Transfer Risks",id:"2-value-transfer-risks",children:[]},{value:"3) Smart Contract Risks",id:"3-smart-contract-risks",children:[]}]},{value:"Some of the Key Risks of Blockchain",id:"some-of-the-key-risks-of-blockchain",children:[{value:"Inefficient consensus mechanisms",id:"inefficient-consensus-mechanisms",children:[]},{value:"The 51% attack",id:"the-51-attack",children:[]}]},{value:"How to Mitigate Blockchain Risks",id:"how-to-mitigate-blockchain-risks",children:[{value:"Open Source",id:"open-source",children:[]},{value:"On-prem or BaaS Options",id:"on-prem-or-baas-options",children:[]},{value:"Production SLA",id:"production-sla",children:[]},{value:"Blockchain Integrations, Analytics, Monitoring and Alerts",id:"blockchain-integrations-analytics-monitoring-and-alerts",children:[]},{value:"Infrastructure, Automation and Cloud Native",id:"infrastructure-automation-and-cloud-native",children:[]}]},{value:"The Future of Blockchain",id:"the-future-of-blockchain",children:[]},{value:"Discover the Ultimate Blockchain Solution at Ocyan",id:"discover-the-ultimate-blockchain-solution-at-ocyan",children:[]}],s={rightToc:r},c="wrapper";function l({components:e,...t}){return Object(o.b)(c,i({},s,t,{components:e,mdxType:"MDXLayout"}),Object(o.b)("p",null,"While Blockchain certainly holds exciting potential, it\u2019s also a relatively new technology which creates room for some inherent risks. Before implementing an appropriate Blockchain solution, it\u2019s essential to understand the key practical Blockchain risk factors and how to minimise your exposure."),Object(o.b)("h2",{id:"types-of-blockchain-risk"},"Types of Blockchain Risk"),Object(o.b)("p",null,Object(o.b)("a",i({parentName:"p"},{href:"https://www2.deloitte.com/us/en/pages/risk/articles/blockchain-security-risks.html",title:"blockchain security risks"}),"Deloitte")," breaks Blockchain risks into three primary categories:"),Object(o.b)("h3",{id:"1-standard-risk"},"1) Standard Risk"),Object(o.b)("p",null,"Standard risks are similar to the risks already encountered within your organisation as part of your current business processes. Blockchain, as a different, more sophisticated technology, slightly alters these risks and it is important to bear these changes in mind during implementation."),Object(o.b)("h3",{id:"2-value-transfer-risks"},"2) Value Transfer Risks"),Object(o.b)("p",null,"Blockchain exists outside of any centralised governing body by allowing peer-to-peer value transfers. Decentralisation gives rise to new risks and vulnerabilities, which were previously managed by the central governing body."),Object(o.b)("h3",{id:"3-smart-contract-risks"},"3) Smart Contract Risks"),Object(o.b)("p",null,"Smart contracts represent one of the most exciting and promises use of Blockchain. However, transferring or one-to-one mapping physical contracts to the digital landscape could bring about new risks."),Object(o.b)("h2",{id:"some-of-the-key-risks-of-blockchain"},"Some of the Key Risks of Blockchain"),Object(o.b)("p",null,"Within the three types of Blockchain risk categories, there are some specific system weaknesses to keep in mind throughout the implementation process."),Object(o.b)("h3",{id:"inefficient-consensus-mechanisms"},"Inefficient consensus mechanisms"),Object(o.b)("p",null,"As a decentralised technology, Blockchain technology relies on consensus mechanisms to verify transactions. Some experts claim that the commonly used Proof of Work consensus mechanism is rather inefficient. These experts call for a more advanced and efficient consensus mechanism that combines Proof of Work and Proof of Stake."),Object(o.b)("h3",{id:"the-51-attack"},"The 51% attack"),Object(o.b)("p",null,"While the 51% attack primarily refers to POW-based Blockchains, Blockchain depends on mutual trust. If a miner or group of miners control more than 50% of the network\u2019s mining hash rate or computing power, they seize control of the Blockchain initiating a 51% attack."),Object(o.b)("p",null,"A 51% attack allows the controlling miners to prevent other users from adding new transactions to the chain and freezes transactions between users. While in control of the Blockchain, the controlling miners can also reverse transactions and double-spend coins."),Object(o.b)("h2",{id:"how-to-mitigate-blockchain-risks"},"How to Mitigate Blockchain Risks"),Object(o.b)("p",null,"We truly believe that the potential of Blockchain outweighs the risks and using the following methods can reduce your vulnerability."),Object(o.b)("h3",{id:"open-source"},"Open Source"),Object(o.b)("p",null,"Open Enterprise Software allows enterprises to run open-source software along with their legacy and critical applications. Open-source software is re-distributed by trusted partners that guarantee their uptime, integrations, automation and interoperability between systems."),Object(o.b)("h4",{id:"trusted-version-distribution"},"Trusted version distribution"),Object(o.b)("p",null,"Open-source providers can also host copies of images and repositories in a trusted architecture that interoperates with your current architecture set-up. Data backups via a trusted architecture are handled by on-premises Docker registries or via the BaaS Ocyan platform."),Object(o.b)("h4",{id:"faster-reseal-cycles"},"Faster reseal cycles"),Object(o.b)("p",null,"With the right operating Blockchain software distribution partner or provider, ad-hoc patches can be done and deployed on case-by-case scenarios. This approach gives you complete control of your uptime and release cycle."),Object(o.b)("h3",{id:"on-prem-or-baas-options"},"On-prem or BaaS Options"),Object(o.b)("p",null,"Blockchain solutions are typically available as either Accessible Cloud service (GA) or On-Premise automation. These solutions provide the same SLA but inherit the firewall and security rules of the organisation."),Object(o.b)("p",null,"This mitigates the risk of vendor lock-in as you can use any platform. If your provider is a cloud and protocol agnostic, you can also set-up a hybrid infrastructure or execute complicated platform migrations."),Object(o.b)("h3",{id:"production-sla"},"Production SLA"),Object(o.b)("p",null,"Your Blockchain provider should handle the SLA, quality, automation support and maintenance. They should also provide analytics ingestion and ensure the stability of your installed software."),Object(o.b)("p",null,"To maintain end-to-end stability, the provider\u2019s server hosts the \u201cverified\u201d versions of Docker images to guarantee a smooth runtime. You can take advantage of fixed versioning for releases, which increases your control and gives you the option to install versions directly from the community hubs."),Object(o.b)("h3",{id:"blockchain-integrations-analytics-monitoring-and-alerts"},"Blockchain Integrations, Analytics, Monitoring and Alerts"),Object(o.b)("p",null,"Blockchain operations must be compatible with your enterprise\u2019s existing digital operations. You also need to choose a solution that delivers detailed transaction monitoring and informative analysis."),Object(o.b)("p",null,"Therefore, you need to consider selecting a Blockchain Analytics Platform that provides a single source of truth for customers\u2019 Blockchain data. Along with continuous full-stack monitoring and custom-defined alerts, customers can programmatically define alerts to trigger incident reports or programmatic trigger events."),Object(o.b)("h3",{id:"infrastructure-automation-and-cloud-native"},"Infrastructure, Automation and Cloud Native"),Object(o.b)("p",null,"The best Blockchain providers offer a serverless (on-prem cloud-managed) platform, which allows you to connect to any blockchain network as well as create models of and analyse Blockchain-based traffic. The serverless platform also creates correlations based on your company\u2019s dataset, for example connecting identities to wallets, and integrates the connected networks to cloud-based enterprise services."),Object(o.b)("h2",{id:"the-future-of-blockchain"},"The Future of Blockchain"),Object(o.b)("p",null,"We\u2019re currently experiencing a technological revolution that\u2019ll allow enterprises to bypass previous boundaries and discover new horizons."),Object(o.b)("p",null,"Blockchain-based solutions are quickly becoming more advanced and are already disrupting many industries like energy, finance, logistics, mobility, healthcare, pharma, etc."),Object(o.b)("p",null,"Ten to fifteen years ago, we couldn\u2019t imagine the concept of e-governments or data user-centric concepts (e.g. GDPR). Now, we can\u2019t imagine a world without access to automation and the Internet."),Object(o.b)("p",null,"P2P technologies are the next step in the digital revolution as they\u2019ll move us towards a more decentralised state and give users more control. To continue our digital evolution, we\u2019ll need a bridging solution to take new concepts from a plan to action, concept to execution, or idea to ideal."),Object(o.b)("p",null,"Platform providers of the future will connect the dots and help companies to automate their enterprise environments. All companies need to embrace these changes to future-proof their business and operating models."),Object(o.b)("h2",{id:"discover-the-ultimate-blockchain-solution-at-ocyan"},"Discover the Ultimate Blockchain Solution at Ocyan"),Object(o.b)("p",null,"Here at Ocyan, we\u2019re powering enterprises with multi-cloud Blockchain infrastructure. ",Object(o.b)("a",i({parentName:"p"},{href:"https://ocyan.com/contact/",title:"Contact Ocyan"}),"Send us a message")," to find out more about end-to-end cloud-operating solutions for enterprise Blockchain and P2P networks."),Object(o.b)("p",null,Object(o.b)("a",i({parentName:"p"},{href:"/docs/solutions",title:"Deploy, Manage and Integrate Blockchains"}),Object(o.b)("img",i({parentName:"a"},{src:"/images/posts/ocyan-deploy-blockchains.png",alt:"ocyan",title:"Deploy, Manage and Integrate Blockchains"})))))}l.isMDXComponent=!0},186:function(e,t,n){"use strict";n.d(t,"a",(function(){return s})),n.d(t,"b",(function(){return u}));var o=n(0),i=n.n(o),a=i.a.createContext({}),r=function(e){var t=i.a.useContext(a),n=t;return e&&(n="function"==typeof e?e(t):Object.assign({},t,e)),n},s=function(e){var t=r(e.components);return i.a.createElement(a.Provider,{value:t},e.children)};var c="mdxType",l={inlineCode:"code",wrapper:function(e){var t=e.children;return i.a.createElement(i.a.Fragment,{},t)}},h=Object(o.forwardRef)((function(e,t){var n=e.components,o=e.mdxType,a=e.originalType,s=e.parentName,c=function(e,t){var n={};for(var o in e)Object.prototype.hasOwnProperty.call(e,o)&&-1===t.indexOf(o)&&(n[o]=e[o]);return n}(e,["components","mdxType","originalType","parentName"]),h=r(n),u=o,d=h[s+"."+u]||h[u]||l[u]||a;return n?i.a.createElement(d,Object.assign({},{ref:t},c,{components:n})):i.a.createElement(d,Object.assign({},{ref:t},c))}));function u(e,t){var n=arguments,o=t&&t.mdxType;if("string"==typeof e||o){var a=n.length,r=new Array(a);r[0]=h;var s={};for(var l in t)hasOwnProperty.call(t,l)&&(s[l]=t[l]);s.originalType=e,s[c]="string"==typeof e?e:o,r[1]=s;for(var u=2;u<a;u++)r[u]=n[u];return i.a.createElement.apply(null,r)}return i.a.createElement.apply(null,n)}h.displayName="MDXCreateElement"}}]);