TL;DR – Blockchain has became one of the major topics that revolves around entrepreneur’s conversation today. Fortinet explains blockchain technology and how to stay safe.
Blockchain is a critical component of the digitalisation of the economy. When adopted, it will revolutionise a variety of businesses. But the success of blockchain will greatly depend on how robust cyber-security is to ward off threats. Blockchain is a shared and continuously reconciled database used to maintain a list of digital records called blocks. It is quickly becoming an important tool not just for financial information, but also for managing and recording virtually all types of data, such as medical and other records, identity management and transaction processing.
Fortinet Network & Security Strategist Gavin Chow explained that blockchain is a vast global database spread out over millions of computers all over the world; it stores transactions of value (money, information or any asset). It is an important tool not just for financial information, but also for managing and recording virtually all types of data such as medical and other records, identity management, and transaction processing.
“Blockchain is a technology that basically distributes a ledger. A ledger is the most trusted source of transactions or facts. It is the same with blockchain. But instead of existing in a large leather-bound title or in a fi nancial management application, blockchains are managed by a distributed set of computing resources working together to maintain that ledger,” he said.
He says every invention has some purpose and fills some gap in the existing system. “The printing press fi lled the knowledge gap, the engine filled the power gap, and the internet fi lled up distance gap. The blockchain fills up the gap of trust, it changes the way we trust, not just the way we trust each other but more specifically the trust with entities like private companies or government agencies.”
“In order to transact with any party, we must trust each other and blockchain provides the necessary tools and framework in order to establish trust with these transacting party.”
Each transaction, or block within it, is linked together in an indisputable manner using public or private key encryption and internal validation algorithms. Hence the term ‘blockchain’. These links are created in such a manner as to be irrefutable, allowing the community to establish and maintain trust instantly, and can be linked all the way back to the original block (or transaction). The distributed community manages transactions, thus maintaining the ledger. For example, while buying a property or house you would make inquiries at a government agency taking care of property titles. But what if certain records are tampered and modified by fraud? You might end up paying a higher price for the house. The blockchain framework covers this gap of trust with its immutable and cryptographic property of trust with verification.
Blockchain and digital currency is quickly becoming a critical component of digitalisation of Malaysia’s economy, and it is here to stay. They are rapidly expanding in both acceptance and usage. Financial institutions in Malaysia
are actively exploring initiatives to apply new blockchain technology to reduce costs and fraud risks as well as enhance transparency of transactions.
According to the Malaysian Industry-Government Group for High Technology (MIGHT), Malaysia will be adopting blockchain by 2025. In fact, leading local banks CIMB and Maybank are already working with fintech companies to hasten its development locally. While much of the frenzy in blockchain has centred on its vasttransformative potential, with many organisations in Malaysia focusing on “how” they can harness it, the success of blockchain will greatly depend on how robust cyber security is to fend off cyber threats in order to ensure data is properly secured and protected.
Chow explained there were many levels of security involved in blockchain technology. Blockchain technology by its nature establishes assurance and significantly reduces the need for processes and controls for reconciliations, confirmations and identity.
As a result, a blockchain infrastructureis a permanent time-stamping engine for computer records. He said, “Blockchain runs on traditional IT systems. If I can compromise the system, I can compromise the blockchain security system.”
“Online security starts with something as basic as two factor authentication on all your digital accounts. The whole idea around security is make it difficult for cyber criminals. The harder it is to compromise
the account, the less likely it’ll be breached,” Chow added.
If a private blockchain technology is being used, there is a finite number of servers supporting the transaction within the system. “If a certain number of those servers are compromised, there is a high degree of certainty control of the currency is lost. In other words, if you have 100 servers maintaining your digital currency, and I take over 51 of them, I win.”
Next, with regards to digital currency, there is usually centralised oversight. If that is compromised in any way, the currency is also compromised. Individuals responsible for oversight, typically a consortium, have the power to undo blocks or otherwise make a major decisions about discrepancies in the blockchain.
As always, security technologies will have to adapt to the security needs of a blockchain technology. The inherent operation may be relatively secure through the use of encryption and strong algorithms, but cyber criminals will inevitable find the weak links of the blockchain system and attack them.
Fortinet adopts a forward thinking view of cybersecurity, and stands ready to protect private blockchain processes and implementation today, Chow adds. “Fortinet provides end to end protection solutions. Fortinet’s secure fabric provides the powerful tools needed to integrate security capabilities and communicate threat information across that secure fabric in order to rapidly identify and negate cybercriminals. Fortinet’s position is to secure the security outside the blockchain technology.”
Chow says ultimately it comes down to awareness. “Malaysia is moving towards digital economy. Online security is something that must be taught from the school level. People have to take care of their online presence just like they would take care of a home.”