Future Blockchain challenges: What strategies should be used?

Blockchain is in the process of industrialization and is used extensively in a wide range of business activities, particularly in the finance and banking sectors. In contrast, there have been instances recently where a significant number of people lost a lot of money when hackers attacked the trading system.

Modern Blockchain applications are increasingly being developed in the Asia-Pacific area recently. Numerous initiatives created on the basis of Blockchain technology have been implemented in governmental organizations, banking & finance institutions, or supply chain-related enterprises.

Blockchain is anticipated to have the power to change current economic paradigms, and even reshape new ones in the future. The recent string of incidents involving digital asset management on well-known platforms, however, has raised concerns in the tech community about the viability of this technology in the future.

The recent incidents have raised concerns about the future of this technology

Beginning in 2022, a lot of bad news started to spread about the bitcoin industry. $500 billion was lost from the cryptocurrency market in May due to Terra Luna's incident. Nearly $400 billion had already departed the cryptocurrency market as of June 2022.

Early in August 2022, the cryptocurrency industry was hit hard by a number of unfavorable incidents, such as the enormous withdrawal of Solana cryptocurrency which had a market worth of several million USD and then at the time became a popular search phrase on Twitter.

A well-known US newspaper - The New York Times, also had to say that the world of cryptocurrency is falling into a full-blown crisis, which shows the truth that digital currencies are still in an early stage of the complete process and have not been controlled completely. 

So what is Blockchain? How safe is it? What are the available options and expectations? Let's find out in the explanation that follows.

What are the fundamentals of Blockchain?

A Blockchain is essentially a decentralized database storing data in blocks that are connected together by encryption and are scalable over time. Each block is connected to the previous block and contains data about initialization time and transactions. Purposefully, Blockchain is designed to withstand data changes that are not feasible once the network has accepted the data.

Historically, Satoshi Nakamoto is the one who created the initial version of Blockchain in 2008. As a crucial component of Bitcoin in 2009, Blockchain served as a ledger of all transactions, in which Bitcoin has been automatically handled without the interference of a third party by using a peer-to-peer network and a decentralized data system.  

Blockchain is designed to withstand data changes

Then, Bitcoin became the first digital currency to tackle the issue of double spending - the possibility that a cryptocurrency can be spent twice or more - after the Blockchain was developed for it.

With open features, accurate transactions, and high security, Blockchain is not only well-known in the finance and banking industries, but this technology has inspired a wide range of other uses as well, such as tracking proof of origin in agriculture, healthcare, and government-level information management. 

This technology has inspired a wide range of other uses

Theoretically, the more decentralized a Blockchain system is, the more secure it is. Blockchain applications in particular frequently have open features so that everyone can simply and confidently verify the information on that platform. The safety and integrity of the ledger are 100% assured because of the mathematical guarantee and the difficulty of the algorithms.

Due to these benefits, Blockchain is regarded as the only technology in use today that can guarantee data reliability and is a useful tool for automating various phases of digital transformation.

What understanding should be given to recent Blockchain-related issues?

Blockchain technology is being used more frequently, and as a result, its influence is growing across a wide range of global companies and economic sectors.

The risks associated with any newly developed technology happen all the time, and blockchain technology is no different. While the implementation of peer-to-peer transactions without the use of a third party has the advantage of helping to resolve the issue of trust in transactions, the proliferation of applications on a decentralized technology platform also makes it easier for security attacks to exploit vulnerabilities.

The risks associated with any newly developed technology happen all the time

Besides, the Blockchain system normally requires a connectivity platform, comprising hardware and software tools, especially the internet. The risk to one's safety, therefore, exists at all times. In addition, more people are participating in the cryptocurrency market but many of them seriously lack the necessary understanding in the field, which encourages the emergence of a variety of fraud.

Terra Luna’s occurrence in May 2022 is an example for consideration. A number of cryptocurrency accounts went into default or were hacked after the incident, which led to a decline in the value of cryptocurrencies. The incident is a turning point in the cryptocurrency industry because it increases people's awareness of the importance of security when designing any new systems.

Creating a legal framework for management and administration is necessary

Some analysts believe that circumstances like this demonstrate how early the crypto ecosystem is. And from a different angle, such occasions are valuable lessons as they help eliminate bad initiatives and bring sustainability to the crypto environment in the long run. 

In addition, as completing legislation in this sector requires extensive time and the cooperation of many stakeholders, it is challenging for enterprises to develop and put into effect this new technology since it lacks a legal framework for management and administration.

What to prepare when deploying Blockchain application solutions?

Regardless of what transpired with Blockchain, cybersecurity experts view the technology as a valuable corporate asset that needs to be safeguarded.

Blockchain is still developing and has a long way to go before it is widely used in all fields. Nearly all Blockchain projects are brand-new, making it easy to start creating a security architecture from scratch. Security may be monitored and assessed if it is understood to be a primary goal of the Blockchain project from the start. This opens the door to ongoing risk management, monitoring, and data collection in the future.

Blockchain is still developing and has a long way to go

Additionally, long-term investments in people skills in business and education are necessary. In order to secure the assets of the firm and its clients, financial specialists and professional accountants in businesses need to adapt to rapid change and maintain up-to-date knowledge.

Despite the many advantages of blockchain technology, there are a lot of potential drawbacks as well. If businesses want to function with confidence in the blockchain era, they must be fully aware of the hazards it brings. And with the help of reliable blockchain solution providers, these challenges can be overcome in an effective way. 

To conclude

Cybersecurity for blockchain applications is an increasing concern for all enterprises. Organizations need security solutions and expert assistance to safeguard themselves against various risks on blockchain application projects due to the inherent complexity of blockchain technology.

The full support of a reliable blockchain solutions provider is very important

Without a shadow of a doubt, blockchain technology has a promising future. Along with the technology's many advantages, we will gain much from entering the Blockchain era with a stronger understanding of cybersecurity risk concerns.

Quan Dinh Writer