Summary and conclusions

• Author: Bellia, M.; Kounelis, I.; Anderberg, A.; Calès, L.; Andonova, E.; Pólvora, A.; Petracco Giudici, M.; Nascimento, S.; Inamorato dos Santos, A.; Rossetti, F.; Papanagiotou, E.; Nai Fovino, I.; Spirito, L.; Sobolewski, M.
• Pages: 101-108

Summary and conclusions

101 101

SUMMARY AND

CONCLUSIONS

Key insights

This report underlines a series of opportunities

and challenges across sectors brought by

blockchain technology, which may introduce

signif‌icant changes in our industry, economy

and society. We of‌fer a summary of key insights

collected from our analysis of blockchain

technology and its applications across sectors.

How blockchain works

Blockchain is a tamper-resistant and time-

stamped database (ledger) operating through

a distributed network of multiple nodes

or users. It is, however, a particular type of

database. Transactions between users do not

require intermediaries or trusted third parties.

Instead, trust is based on the rules that everyone

follows to verify, validate and add transactions

to the blockchain – a ‘consensus mechanism’.

Blockchain is based on a particular combination

of key features: decentralisation, tamper-resistant,

transparency, security and smart contracts.

The lack of a central entity controlling the system

creates strong resilience against single point-

of-failure f‌laws. Since it is extremely dif‌f‌icult

to change or delete the record of transactions,

in this sense the records on a blockchain are

tamper-resistant. In public or open blockchains

all transactions are transparent and visible.

All transactions are time-stamped – that is,

data such as details about a payment, a contract,

transfer of ownership, etc. are linked publicly to

a certain date and time. And smart contracts

enable the terms of agreement between parties

to be executed and enforced without the need

for human coordination or intervention.

However, a number of challenges remain

unresolved, such as the limited scalability

and performance of public blockchains, mainly

related to the low volume of transactions, or

the high energy consumption when deploying

current PoW consensus mechanisms. Other

threats can arise from potential collusion from

a majority of participants which could overrun

the network (51 % attacks), or from the high

dependency of running the network on a limited

number of participants. A major source of security

vulnerability also lies in the added responsibility

for key management, which can be as simple

and serious as losing a phone or a back-up of

the credentials.

Another key issue that needs further research

is how to safeguard personal, sensitive

or conf‌idential data. Transparent data on

a blockchain might be a problem when specif‌ic

data sets are not meant to be publicly available,

or need to be changed due to errors, inaccuracies

or other problems in the original data entry.

Potential conf‌licts between specif‌ic blockchain

architectures and the EU’s GDPR warrant

a wider debate.

Scanning blockchain ecosystems

To a certain degree, the hype around blockchain

technology has been inf‌luenced or shaped by

a spike in interest from f‌inancial institutions

since 2014. However, while more well-known