Is Your Enterprise Ready For The Blockchain Leap?
Here are five key areas that need to be addressed to make this a
reality
2018 might well be
the year of Blockchain, given its rising popularity as one of today’s most
disruptive emerging technologies. It’s one of the most discussed technologies
in the board rooms of Corporate India, and for good reason. Blockchain is
fundamentally transforming how business is done with its ability to make B2B
transactions more secure, transparent, and efficient.
Blockchain’s impact is predicted to deliver $176 billion of additional value by 2025, and it is forecast that 10% of the Global GDP will be stored in blockchain technology by 2027. While blockchain was one of the hottest topics in 2017, the discussion was predominantly focused on its potential. For rapid adoption to occur, what needs to happen for there to be a significant shift from experimentation to production deployments of enterprise blockchains?
The challenges
The primary hurdles boil down to five areas: performance at scale, operational resilience, security and confidentiality, supportability and management, and enterprise integration.
Performance at Scale
Today’s corporate systems typically handle huge numbers of transactions. Similarly new blockchain networks could contain hundreds or thousands of members and requiring the handling of massive transaction volumes, with sub-second transaction latency and a robust and efficient on-boarding process. This is necessary where all the members involved need verifying, as is the case with permissioned blockchains.
While today’s blockchain applications may not yet require these throughput levels, most real-world examples don’t even approach 100 transations per second (tps) – Bitcoin averages 7 tps and Ethereum is about twice that. Additionally, current transaction wait times (latency) can run into minutes or hours, and most current proof of concepts only cater for a dozen participants on a single blockchain, and have onboarding processes that make assumptions and take short cuts and so are unlikely to stand up to real-world scrutiny.
Before blockchain can become common place in the corporate world, these limitations must be met. The challenge is that this requires a complex architectural approach, and while these architectural principles are becoming more established through bodies like the Hyperledger Fabric, a Linux Foundation project, more needs to be done to ensure new systems become enterprises class.
Resilience
Business systems are built to avoid downtime and to recover rapidly when (not if) some components fail. Traditional enterprise software uses replication of services and redundancy to ensure that the system survives an outage of any single and even multiple components, as well as increasingly tools like autonomous monitoring and recoverability of failed components.
Blockchain solutions need to replicate this approach, especially around minimizing intervention. Research shows that around 70 percent of outages are due to human errors introduced while correcting other issues or adjusting configuration.
Security and Confidentiality
Given that blockchain allows organizations who might not fully trust each other to conduct secure, trusted transactions, security and confidentiality are key.
As a foundation, digital signatures are required to verify the sender and validate message integrity, as is transport security to authenticate the communications end points and encrypt the message traffic. Automatically applied encryption for data both in-transit and at-rest is also a best practice to maintain the integrity and security of the blockchain network, and prevent most hacking attacks.
Strong identity and key-management capabilities are essential for blockchain certificate authorities to authenticate identity and verify access privileges. Moreover, since even in secure environments credentials can be stolen via spearfishing or social engineering attacks, a certificate revocation mechanism must be available as an integral part of the solution to prevent the use of compromised certificates.
Systems need to be in place to secure ongoing access to blockchain operations interfaces, or REST APIs, from external client applications, ideally coupled with adaptive or behavioral authentication – comparing users’ behavior to historical patterns and generating alerts for any significant deviations in typical usage.
Enterprise blockchains must have the ability to conduct confidential transactions, and offer capabilities like fine-grained authorizations for enforcement of access control within a smart contract and private peer-to-peer interactions that limit visibility of transaction information from other peers. Selective encryption of the sensitive data for restricted access by authorized peers is necessary to further enhance data and transaction privacy.
Supportability
Another challenge is that once an organization has built a blockchain application against a particular use case, it needs to put it into production to achieve the promised results. Being an emerging technology, few companies have the staff to assemble, harden, and support the blockchain network components, and all its supporting infrastructure.
Who will provide troubleshooting, day-to-day administration and monitoring, and deal with patching or upgrades to new versions? With a production blockchain, operations and supportability become critical, including blockchain operations and dynamic configuration, ability to monitor SLAs, troubleshoot anomalies, and manage a patching/upgrade lifecycle with backward compatibility.
Integration
Many of the multi-party processes and business-to-business interactions would benefit from using blockchain touch, and therefore need to integrate with a number of enterprise systems of record (SORs) – for example blockchain can extend core banking systems, enterprise resource planning, supply chain management, human capital management.
Building the necessary integrations one by one is very complex and costly. Businesses need pre-built on-ramps for enterprise systems and modern event and API-driven integration methods to invoke transactions, share data, and capture blockchain events and ledger updates into systems of record (SORs)
For example, a shipping transaction initiated in a supply chain management system can trigger a blockchain transaction to update the order information and related metadata stored in a distributed ledger. In an outbound integration example, an account transfer associated with an invoice settlement in a blockchain system may trigger an event to update an internal general ledger account.
Help From The Cloud
One way to help alleviate this process is to adopt blockchain as a pre-assembled managed service (BaaS), which leverages a service provider’s ready-to-deploy infrastructure and operations capabilities to manage, monitor, patch, and maintain the infrastructure, while enterprises focus on the application-delivered value of using the blockchain.
The service provider would integrate and maintain the foundational technologies required to run the blockchain, monitor and troubleshoot the blockchain network, and provide an operations interface for the members to perform dynamic configuration, monitor service-level agreements, and manage policies as well as tools to manage smart contract lifecycle – deploy initial chaincode, upgrade to a new version, etc.
Last year saw a lot of blockchain experimentation across financial services, supply chain and a number of other industries as well as Government operations. For this to move toward production deployments in 2018, the technology needs to mature in these key areas outlined above. It will also require cloud companies and open source consortia like Hyperledger to step up to the challenge and deliver on these requirements. Together they will help enterprises fully adopt the blockchain as a part of their business–critical IT systems.
Blockchain’s impact is predicted to deliver $176 billion of additional value by 2025, and it is forecast that 10% of the Global GDP will be stored in blockchain technology by 2027. While blockchain was one of the hottest topics in 2017, the discussion was predominantly focused on its potential. For rapid adoption to occur, what needs to happen for there to be a significant shift from experimentation to production deployments of enterprise blockchains?
The challenges
The primary hurdles boil down to five areas: performance at scale, operational resilience, security and confidentiality, supportability and management, and enterprise integration.
Performance at Scale
Today’s corporate systems typically handle huge numbers of transactions. Similarly new blockchain networks could contain hundreds or thousands of members and requiring the handling of massive transaction volumes, with sub-second transaction latency and a robust and efficient on-boarding process. This is necessary where all the members involved need verifying, as is the case with permissioned blockchains.
While today’s blockchain applications may not yet require these throughput levels, most real-world examples don’t even approach 100 transations per second (tps) – Bitcoin averages 7 tps and Ethereum is about twice that. Additionally, current transaction wait times (latency) can run into minutes or hours, and most current proof of concepts only cater for a dozen participants on a single blockchain, and have onboarding processes that make assumptions and take short cuts and so are unlikely to stand up to real-world scrutiny.
Before blockchain can become common place in the corporate world, these limitations must be met. The challenge is that this requires a complex architectural approach, and while these architectural principles are becoming more established through bodies like the Hyperledger Fabric, a Linux Foundation project, more needs to be done to ensure new systems become enterprises class.
Resilience
Business systems are built to avoid downtime and to recover rapidly when (not if) some components fail. Traditional enterprise software uses replication of services and redundancy to ensure that the system survives an outage of any single and even multiple components, as well as increasingly tools like autonomous monitoring and recoverability of failed components.
Blockchain solutions need to replicate this approach, especially around minimizing intervention. Research shows that around 70 percent of outages are due to human errors introduced while correcting other issues or adjusting configuration.
Security and Confidentiality
Given that blockchain allows organizations who might not fully trust each other to conduct secure, trusted transactions, security and confidentiality are key.
As a foundation, digital signatures are required to verify the sender and validate message integrity, as is transport security to authenticate the communications end points and encrypt the message traffic. Automatically applied encryption for data both in-transit and at-rest is also a best practice to maintain the integrity and security of the blockchain network, and prevent most hacking attacks.
Strong identity and key-management capabilities are essential for blockchain certificate authorities to authenticate identity and verify access privileges. Moreover, since even in secure environments credentials can be stolen via spearfishing or social engineering attacks, a certificate revocation mechanism must be available as an integral part of the solution to prevent the use of compromised certificates.
Systems need to be in place to secure ongoing access to blockchain operations interfaces, or REST APIs, from external client applications, ideally coupled with adaptive or behavioral authentication – comparing users’ behavior to historical patterns and generating alerts for any significant deviations in typical usage.
Enterprise blockchains must have the ability to conduct confidential transactions, and offer capabilities like fine-grained authorizations for enforcement of access control within a smart contract and private peer-to-peer interactions that limit visibility of transaction information from other peers. Selective encryption of the sensitive data for restricted access by authorized peers is necessary to further enhance data and transaction privacy.
Supportability
Another challenge is that once an organization has built a blockchain application against a particular use case, it needs to put it into production to achieve the promised results. Being an emerging technology, few companies have the staff to assemble, harden, and support the blockchain network components, and all its supporting infrastructure.
Who will provide troubleshooting, day-to-day administration and monitoring, and deal with patching or upgrades to new versions? With a production blockchain, operations and supportability become critical, including blockchain operations and dynamic configuration, ability to monitor SLAs, troubleshoot anomalies, and manage a patching/upgrade lifecycle with backward compatibility.
Integration
Many of the multi-party processes and business-to-business interactions would benefit from using blockchain touch, and therefore need to integrate with a number of enterprise systems of record (SORs) – for example blockchain can extend core banking systems, enterprise resource planning, supply chain management, human capital management.
Building the necessary integrations one by one is very complex and costly. Businesses need pre-built on-ramps for enterprise systems and modern event and API-driven integration methods to invoke transactions, share data, and capture blockchain events and ledger updates into systems of record (SORs)
For example, a shipping transaction initiated in a supply chain management system can trigger a blockchain transaction to update the order information and related metadata stored in a distributed ledger. In an outbound integration example, an account transfer associated with an invoice settlement in a blockchain system may trigger an event to update an internal general ledger account.
Help From The Cloud
One way to help alleviate this process is to adopt blockchain as a pre-assembled managed service (BaaS), which leverages a service provider’s ready-to-deploy infrastructure and operations capabilities to manage, monitor, patch, and maintain the infrastructure, while enterprises focus on the application-delivered value of using the blockchain.
The service provider would integrate and maintain the foundational technologies required to run the blockchain, monitor and troubleshoot the blockchain network, and provide an operations interface for the members to perform dynamic configuration, monitor service-level agreements, and manage policies as well as tools to manage smart contract lifecycle – deploy initial chaincode, upgrade to a new version, etc.
Last year saw a lot of blockchain experimentation across financial services, supply chain and a number of other industries as well as Government operations. For this to move toward production deployments in 2018, the technology needs to mature in these key areas outlined above. It will also require cloud companies and open source consortia like Hyperledger to step up to the challenge and deliver on these requirements. Together they will help enterprises fully adopt the blockchain as a part of their business–critical IT systems.
http://www.businessworld.in/article/Is-Your-Enterprise-Ready-For-The-Blockchain-Leap-/26-08-2018-158370/?utm_source=newzmate&utm_medium=email&utm_campaign=2082&tqid=1K_udGs5CEgB7WcgHsKJ106jdbxZpvuMivgQPvHf
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