Blockchain Technology: Security and Risk Management

This report focuses on blockchain technology, its working, applications, achieving CIA in blockchain, hashing support, capabilities and limitations of blockchain, and future of this technology.

IS SECURITY AND RISK
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Blockchain technology Introduction............................................................................................1
Working mechanism of blockchain.............................................................................................1
Application the blockchain can support......................................................................................3
Ways in which confidentiality, integrity and availability (CIA) can be achieved using the
blockchain....................................................................................................................................4
Discussion of support hashing technique provides in the implementation of the blocks in the
blockchain....................................................................................................................................5
Capabilities and limitations of blockchain technology................................................................6
Future of blockchain technology in business and particularly in banking industry....................7
CONCLUSION................................................................................................................................7
REREFENCES................................................................................................................................8

INTRODUCTION
Information system is a kind of technological system which is mostly designed for
collection of data, store, process and distribute information. Due to advancement in technology it
has become extremely important to focus on security of the such system as risk associated with it
are increasing continuously (Kamble, Gunasekaran and Arha, 2019). Due to advancement in
technology, risk for organizations and their data has increased exponentially. It has become
extremely important for organization to focus on their security and risk management. This report
will focus on blockchain technology, its working, applications, achieving CIA in blockchain,
hashing support, capabilities and limitations of blockchain, and future of this technology.
MAIN BODY
Blockchain technology Introduction
Blockchain is a kind of distributed database of records of all digital events, transactions
that have been executed and shared with other participants or parties involved in digital event.
Each transaction that have been done. It contains each and every record of transaction done.
Blockchain technology records most of the digital transaction or records in Digital which helps
in making it incorruptible (Wang and et. al., 2019). It can be used for any kind of assets Land
Assets, Cars and many more which is required to be recorded on Blockchain as a Transaction.
Working mechanism of blockchain
Blockchain is a chain of blocks that contain various kinds of information. All the block
has hash code of previous block, transaction data and time stamp. It has a simple design because
of which it becomes invulnerable to data tempering.
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Figure 1 Working of Blockchain
It does not have any kind of central system or a server which keeps Blockchain data. Its
information is distributed over billions of computers globally that are connected with Blockchain
(Al-Saqaf and Seidler, 2017). This system allows Notarization of data as it is present on each and
every node, not only this it is even verified publicly.
This decentralized system makes Blockchain an open digital distributed ledger than can
record transaction records of two or more than two persons efficiently and securely. As it is
distributed, it is typically managed by network which is peer to peer that works together
simultaneously in order to resolve problems for block validation. In peer to peer network node
gets connected with Blockchain using the client. Client helps in propagating and validating
transaction or save data on to the Blockchain. When a copy is connected to Blockchain, a copy
of Blockchain gets downloaded into the system which helps the new node to come into
synchronisation with the new block of data within Blockchain. All the nodes connected to
blockchain helps in transaction execution in return for an incentive which is called Miners. Once
the data recorded in any block or node cannot be updated retroactively without bringing changes
in all the other subsequent blocks which majorly requires conformation of majority present in the
network. This main functionality of Blockchain technology makes it secure and difficult to hack.
This working of Blockchain technology makes it trustworthy and usable for Business
organizations (Bai and Sarkis, 2020). it also helps the organizations to ensure that no
transactional or financial fraud would happen as this technology and working makes it
impossible for fraud to occur with any kind of digital data or transactional data.
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Application the blockchain can support
Blockchain is one of the most exciting and secure alternatives to centralized banking,
traditional currency and transaction methods that are not fit to handle financial transactions
safely and securely. It is a kind of alternative that can change the world. This technology is
growing continuously that helps in listing transactions on all the computers within the network
because of which hacking becomes impossible (Dubey and et. al., 2020). There are various kinds
of applications for Blockchain that can be used by organizations for various kinds of purposes.
Some of the most commonly used applications are:
 Smart contract: This term was first introduced in 1993 and in 2013 by introduction of
Ethereum project this term again came into lime light. These application runs exactly in the
way it is programmed without any possibility of downtime, fraud, censorship or interference
of third party. Smart contracts are self- automated computer programs that can carry out any
kinds of terms of any contract. It is kind of financial security system held in contractual
agreement by a network which is routed to receipts that based on computer codes and future
events. These smart contracts help business to bypass regulations and decrease cost for subset
of financial transactions.
 Cloud storage: It is another kind of application that can be used by business in order to take
advantage of Blockchain technology. It has been analysed that overall world spend more than
$21 billion alone on cloud storage, this cloud opens a revenue stream for average users by
reducing stage cost for data.
 Logistics and Supply chain: most of the purchases that are done by an individual are not
made up of a single entity but is mostly made by a chain of suppliers who sell their products
or services to a particular company who assemble and market their products for selling. But
there is one problem associated with this system i.e. if one of the components fails then
company has to suffer various kinds of issues or loses. Blockchain technology can provide
proactive and permanent audit-able records, digitally permanent that helps in showing
stakeholders that state of products at each and every value- added steps.
 Paying Employees: Blockchain can be for paying salaries to employees as it has its roots in
cryptocurrency. If an organization operate internationally and has to pay wedges to their
international workers then in such cases, they can incorporate Bitcoin within their payroll
process as it can help the organizations in saving lots their payroll expenditure and cost
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associated with it (Scott, Loonam and Kumar, 2017). World’s first bitcoin- based payroll
service will be used for transferring funds moving from bank to bank or for making payments
via bitcoin in order to save both money and time of both employees and employers. It can
also be used for paying remote employees or contractors as well. It is one of the major and
biggest part of personal businesses and big banks and for many more organizations.
 Electronic voting: DPOS is one of the fastest, most effective and most decentralized as well
as flexible consensus model available. DPOS helps in leveraging stakeholder’s power
approval voting in order to resolve consensus in a democratic and a fair manner. All the
parameters of network from free schedule to block intervals can be tuned to electronic
delegates. It can also be used to allow transaction to be confirmed at a speed of 1 sec. it also
helps in protecting participants against unwanted regulatory interference. It is assumed that
Blockchain in future will be growing and can be used for voting electronically.
Ways in which CIA can be achieved using the blockchain
Blockchain is one of the most effective protocol behind Bitcoin. It has received
tremendous amount of attention in last five years. From a perspective a system security is
majorly categorised into three categories: confidentiality, integrity and availability. Whenever
security of a system comes into picture confidentiality and availability are uniform but integrity
is many times quite uncertain. Due to this uncertainty many times integrity breeches are faced or
suffered by organizations such as: abrupt shutdown of the system, suddenly system stops
working and many more (Lin, Shen and Miao, 2017). Blockchain is a kind of technology which
helps in in enhancing overall security of a system by achieving CIA which further helps in
reducing vulnerabilities associated with the system. As Blockchain is a distributed database and
maintained by numerous parties it helps in achieving CIA. In fact, Blockchain is a form of CIA
security triad model. Transactions done on blockchain are grouped and stored in chain of blocks
that links every block chronologically with hash of predicting block. Information security
practise enforced implements principles of confidentiality, integrity and availability. It helps in
achieving all the three categories of security but however, it’s confidentiality aspect is not
enforced as strong as integrity and availability aspects that helps in string information securely
inside it. Due to its decentralized system all the data elements in it are transparent to all the
individuals who share their data elements with one another within a single blockchain. As a
result of which confidentiality element is not enforced (Daniel and et. al., 2017). But availability
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of data and link of all the block with each other helps in achieving availability of the data. All the
data which is stored within blockchain cannot be edited easily which helps in achieving integrity
of data elements easily. However, various kinds of research are being carried out in order to
available all the three elements of security together i.e. Confidentiality, Integrity, and
Availability so that transactions can be kept private within the blockchain.
Discussion of support hashing technique provides in the implementation of the blocks in the
blockchain
Hashing is a technique which is used got generation of values from a text using
mathematical function. It is one of the best ways through which security during process of
message transaction can be ensured. It helps in protecting security of transmission against
tampering. Blockchain also uses hashing technique. Hashing takes input string of any length and
givens a fixed length output. In Bitcoin transactions are taken as input and is run with the help of
hashing technique which helps in providing a fixed length output. Output generated of first block
is taken as input for second block which also helps in maintaining chain of blocks and maintain a
secure transaction process (Clauson and et. al., 2018). So instead of remembering large amount
of input data, Blockchain simple remember the hash and keeps a track of it. It not only helps
increasing overall security of the system but it also helps in reducing changes of collision and
enhances overall integrity and availability of the data.
Figure 2 hashing technique in Blockchain
limitations and capabilities of blockchain technology
There are various kinds of capabilities as well as limitations of blockchain technology.
Some of the capabilities of blockchain technology are:
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 Decentralized system of Blockchain allows the users to keep control of their transaction and
information.
 This decentralized system cannot fail accidently as they rely on separate components.
 It does not have a central point of control because of it becomes difficult for attackers to try
any malicious attack which further makes it more durable and attack resistance (He and et.
al., 2017).
 It further helps in reducing third part risk as users can exchange information without any
intermediation of a third party.
Limitations of blockchain technology are:
 Blockchain involves entirely new vocabulary. This has increased complexity of the
technology.
 It requires large network of users. If it does not have a robust network with widely distributed
grid of nodes then it can become more difficulty get full benefits of this technology.
 This does not hold a place for human error i.e. all the data or information in stored with
Blockchain is required to be stored correctly in the first place itself (He and et. al., 2017).
 There is one more flaw within Blockchain i.e. if more than 50 percent of computer network
tells a lie then that lie will become a truth, this is called ’51 percent attack’.
Future of blockchain technology in business and particularly in banking industry
Block chain technology have been considered to be one of the important aspects in the
recent years which have already changes the people lifestyle in some of respective areas. This
have the major level of great influence valuable level of economy along with security issues and
the challenges. On the other hand, there banking industry have the potentiality to have the offers
the changes in relation to development to have the uptalking the new level of tech.
In addition to that’s their risk to the organization have to attack the increased level of
potentiality as the threat have the occurrence so that’s the hacker could not exploit using the
different types of malware. With more level of technological advancement by having the every
spheres in the developing global business as the internet connection in order to have the
energising the towards day to day more level of banking activities , trading and more level of
investment in stick markets by widening more e commerce platforms make the online payments
with the exchanges currency in online. This have the more undertaking funding which is mile
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been benefitting to have the numerous levels of finance app designs in more way to have the
personal and business uses.
Innovation have the more way of resulting there to have the leading to more level of
technological innovations which have more level to be boosted by the way o pumping the proper
level of banking sector. This have to lead in maintaining the development by staying the
relevant in more way of competitive advantages in more digital edge in more level of primary
concerns with existing the respective new business.
As per the survey has been done of the fintech industry that’s more than 77% of the
financial services which have the development of easy plan to more level of adoption by
developing the blockchains as the more than 45 % of banks as more level of global investment
banks embracing the more level of blockchain route. This have turned out to be remedy in term
of inefficacies in more of back office setups which tends to be the most noticeable impacts to
bring their sustainability reducing their case of fraud along with cyber-attacks in the financial
landscape.
CONCLUSION
from the above file, it can be concluded that advancement in technology, risk for
organizations and their data has increased exponentially. Block chain is simply blocks connected
within a chain that contain various kinds of information. All of the block has hashing number of
the previous block, transaction data and time stamp. This main functionality of Blockchain
technology makes it secure and difficult to hack. This working of Blockchain technology makes
it trustworthy and usable for Business organizations. Ethereum project is the application runs
exactly in the way it is programmed without any possibility of downtime, censorship, fraud or
interference of third party. It helps in achieving all the three categories of security but however,
its confidentiality aspect is not enforced as strong as integrity and availability aspects that helps
in string information securely inside it. Their banking industry have the potentiality to have the
offers the changes in relation to development to have the uptalking the new level of tech.
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REREFENCES
Books and Journals
Al-Saqaf, W. and Seidler, N., 2017. Blockchain technology for social impact: opportunities and
challenges ahead. Journal of Cyber Policy. 2(3). pp.338-354.
Bai, C. and Sarkis, J., 2020. A supply chain transparency and sustainability technology appraisal
model for blockchain technology. International Journal of Production Research, pp.1-
21.
Clauson, K.A., and et. al., 2018. Leveraging blockchain technology to enhance supply chain
management in healthcare. Blockchain in healthcare today.
Daniel, J., and et. al., 2017. Blockchain technology, cognitive computing, and healthcare
innovations. Journal of Advances in Information Technology Vol, 8(3).
Dubey, R., and et. al., 2020. Blockchain technology for enhancing swift-trust, collaboration and
resilience within a humanitarian supply chain setting. International Journal of
Production Research, pp.1-18.
He, P., and et. al., 2017. Survey on blockchain technology and its application prospect. Computer
Science. 44(4). pp.1-7.
Kamble, S., Gunasekaran, A. and Arha, H., 2019. Understanding the Blockchain technology
adoption in supply chains-Indian context. International Journal of Production
Research. 57(7). pp.2009-2033.
Lin, J., Shen, Z. and Miao, C., 2017, July. Using blockchain technology to build trust in sharing
LoRaWAN IoT. In Proceedings of the 2nd International Conference on Crowd Science
and Engineering (pp. 38-43).
Scott, B., Loonam, J. and Kumar, V., 2017. Exploring the rise of blockchain technology:
Towards distributed collaborative organizations. Strategic Change. 26(5). pp.423-428.
Wang, Y., and et. al., 2019. Understanding blockchain technology for future supply chains: a
systematic literature review and research agenda. Supply Chain Management: An
International Journal.
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