Keep Risk Concerns in Mind with New Uses for Blockchain Technology
January 25, 2018
Blockchain and digital currencies continue to gain more attention and traction in the market. As this happens, the uses and applications of blockchain are becoming more varied as companies and people think innovatively about how to use this technology to enhance their businesses and lives. While this is happening, it’s important to consider the risks of blockchain and be intentional in decision-making.
We recently discussed some ways in which blockchain technology could change the way consumers and companies conduct business, making it easier and more efficient for both. This trend is evident in the Eastman Kodak Company’s recent announcement that they will be offering KODAKCoin which will help photographers address a long-time pain point, tracking unlicensed use of their work.
With all this attention, it is easy to forget that the broad use of blockchain technology is still new. While blockchain is supposed to be more secure because of its shared record of transactions, questions still remain about its security.
Bloomberg recently highlighted this question in an article that reports hackers have compromised more than 14% of Bitcoin and Ether (another digital currency) supplies in less than a decade. This equates to about $1.2B. Security experts note in the article that blockchain’s vulnerability is similar to that of software in some cases, especially as there are thousands of entrants, each with its own concerns.
The “so what” for credit unions is no different than when evaluating any new technology or software. Start by understanding the technology as much as possible. While blockchain is more secure in some ways, it is still vulnerable. On the other side, organizations are just beginning to recognize the amazing uses and applications of blockchain technology, and how they can benefit consumers and businesses.
The risks of blockchain should be weighed against the opportunities to provide additional member benefits and enhance relevancy. Being aware of this, and keeping the organization’s strategy in mind, can help decision-makers make conscious choices about how they want to enter the market and better position the credit union with this technology.