The blockchain facing its limits

While the size of the global blockchain market is expected to increase 140 times by 2030, the technology still suffers, directly or indirectly, from certain weaknesses.

Born with Bitcoin in 2008, the blockchain is a decentralized system for carrying out data exchanges and financial transactions in a secure manner. Apart from cryptocurrencies, it is attracting a growing number of sectors of activity and finds multiple applications in the supply chain, health, digital identity, transfer of assets (real estate title deeds, shares, bonds, etc.), the Internet of Things…

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According to a study by Grand View Research, the global blockchain technology market size is estimated to be $10.02 billion in 2022. It is expected to reach $1,431.54 billion in 2030, growing at an average annual growth rate of 85.9% between 2022 and 2030. But this technology with many benefits, deemed inviolable, nevertheless has certain weaknesses.

A complexity of implementation

The Nabu company, a platform for accelerating the processing of documents related to the transport of goods, highlights the importance of the blockchain as being a great innovation in the world of international trade since the invention of the maritime container. But not everything is 100% positive.

“Lately, 12 European banks withdrew from the we.trade platform; a very strong signal. This news shows how imposing the blockchain in this industry is particularly complex. We also note that another startup in the sector abandoned the blockchain the same week, citing fears about the ability of its model to gain momentum,” explains Arnaud Doly, CEO of Nabu.

What Arnaud Doly points out is the difficulty in deploying this technology in a sector where “paper” documents are still very present and where, for each international trade transaction, multiple stakeholders are involved.

“The format used has a very strong impact on the players concerned. If I buy goods in China, dozens of stakeholders are involved. And if I offer a French blockchain to my Chinese interlocutors, they will tell me that it is not compatible with their software solutions. There is a real challenge of interoperability and, in some countries, acceptance of foreign technology,” adds Arnaud Doly.

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The issue of blockchain network security

For Michel Vujicic, Technical Director of I-Tracing, a French specialist in cybersecurity services, the blockchain represents an opportunity to accelerate and better secure transactions: “With the fundamental promise of restoring trust, blockchain technology has won over about ten years in the world of finance, energy, health or even industry”.

But, according to the CTO of I-Tracing, even though this technology produces a tamper-proof record of transactions, blockchain networks are not immune to cyberattacks and fraud. “When building a blockchain application, it is paramount to consider all business, governance, technology, and process risks to limit the risks stemming primarily from the decentralized nature of blockchains. “, he says.

In a nutshell, Michel Vujicic emphasizes the fact that the “blockchain component”, deployed as part of an IT service, is not enough to ensure the overall security of this service. “It is necessary to verify that, at the periphery of this technology, the means of access to the node, the identities and the permissions are correctly managed. If there is a vulnerability at this level, it is possible that the blockchain service has failed,” he notes.

Another point of vigilance: the smart contracts developed on certain blockchain platforms. These smart contracts are real computer programs executing a set of predefined instructions. “From a cybersecurity perspective, these are specific applications that can be subject to code auditing or parameter verification and I/O management. In a fairly classic way, we find issues of secure development,” comments Michel Vujicic.

Legal limits too

If we look now from a legal point of view, the blockchain has many advantages, but also certain limits. “NFTs make it possible to certify the ownership of a work, exclusively to a person. But the problem that arises more and more often is that of the origin of the work. Currently, it’s a bit of a rat race. The rules of intellectual property, because it is digital, are not always respected”, notes Ludovic de La Monneraye, Lawyer at Vaughan Avocats.

Another limit: the law applicable in the event of a dispute. “As the blockchain appeals to users from all over the world, the legal rules that apply today are still very vague. Some researchers suggest that the applicable law could be that of the country in which the servers are located. But for the moment, there are no specific regulations,” concludes Ludovic de La Monneraye.

The blockchain, despite the immense development potential that characterizes it, still suffers from certain limitations specific to any emerging technology. In the coming years, its entire ecosystem will have to tackle a number of weaknesses related to the interoperability of the various existing blockchains, the security of deployment environments and legal guarantees relating to content.

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