Effect of block chain technology on trade finance and network security
The “digital first” in the ecosystem of companies are being forced to continue to innovate, to keep in the forefront of the industry, keep the competitiveness of the industry, particularly in the financial services and technology. Block chain technology has begun to change the global financial infrastructure (any help money flow without friction.).
However, block chain technology often with Ponzi fraud and fraud associated. Block chain technology based on distributed consensus driven ledgers, to promote and preserve all historical transactions, without the participation of the third party. This concept will revolutionize the global trade, and to the intermediary including commercial banks and brokers, the existence of challenge.
To the center, encryption and security
The blockchain success depends largely on the research of encryption and security. Review the history of distributed system and automation, BitTorrent and Napster to the center of the Internet application for the effective application of bitcoin blockchain paved the way.
We are now in a distributed network, point-to-point encryption technology and automation intelligent consensus and contracts, trade financing tools and data sharing combining stage.
Global banks and financial institutions are working to develop public and private blockchain case standards and protocols. With the daily business, contract and intelligent data sharing is embedded into the block chain technology in financial institutions, financial institutions will be distributed to the security system integration ledgers together is a pressing matter of the moment, and it is a key.
For example, Interpol said recently, there may be malicious software block chain or other illegal export data to all other computers on the network.
What’s the meaning of this? Network security experts Interpol confirmed that there is a fixed open space block chain, which means that it may become illegal malicious software or data storage target, and this space is difficult to erase data. For data sharing networks in block chain, the virus can be uploaded to the fixed open space, and other network block in the chain of infection, but it is difficult to remove.
Many experts also will subvert the block chain technology as the field of trade finance, but there are still some inherent problems. Trade financing refers to financing of overseas goods and services. Usually, investors in the trade between the buyer and the party, in order to confirm the transaction and provide payment guarantee for the seller, and the nearest block chain is regarded as a potential investor who subvert the trade. However, due to the impact of trade financing by many fraudulent financing activities, from trade finance security perspective, block chain technology bearer characteristics is challenging, that is always the need for due diligence and compliance inspection.
In addition, in view of nature, the floating currency transactions across multiple jurisdictions and shipping documents / confirmation of the complicated process and many other factors, trade finance fraud is also extremely common.
Block chain technology is helpful in trade financing, and can reduce the risk of network security?
On the contrary, there are some potential applications can use block chain technology to enhance safety and reduce risk. For example, a security solution of KSI Guardtime (keyless signature infrastructure) can replace the RSA digital signature, and can run in the private block chain. In this way, the authentication information will not be tampered with, and the timestamp is stored in the cloud. As a result, such as application components, log files and firmware, the system can for any damage (for example: hackers or malicious software) to provide real-time alerts, “allowing real-time identification of organization and management irregularities”.
This means that the dual authentication problems no longer exist. This solution can be used in various fields of trade financing, from the confirmation in the credit goods status, to allow access to the data in the supply chain. The Guardtime block chain privatization may mean that in a matter of seconds can be authenticated at the same time provide large-scale RSA verification does not have scalability.
Guardtime is superior to the traditional database is unable to change, delete or change / update records, from a regulatory perspective, these advantages are very suitable for tracking audit and record keeping. In this case, the block chain can attest the integrity of records, and with all the changes in time-lapse data.
The second is the MIT Enigma project. When a reputable educational institution dedicated to the study of block chain project great, it means that there will be events. Enigma bitcoin blockchain based on can securely share data and code in the block chain, because users can only access a specific part of the code.
The project team wrote in the paper:
“The data to distinguish between the different nodes, and together they shall be calculated variables without leaked information to other nodes.” According to the project’s founder said: “specifically, no one is able to obtain all the data; on the contrary, part of the data acquisition of each party does not have any significance (i.e., seemingly random).”
In this way, Enigma can help improve underwriting and automatically execute the function, in order to achieve complete and accurate decision-making of user privacy.
What is the next?
Although the blockchain may reduce the risk of BAU and maintenance costs as well as the background of artificial processing, but the global financial services are still facing the challenges from the block chain. According to CyNation’s founding team member ShadiRazak said, it is important to network security as a revenue center rather than a cost center, will build security products as the core to solve customer needs, rather than after, and prevent the occurrence of the problem.
Block chain technology can significantly improve the safety of trade finance, and if appropriate implementation cost is reduced, but before the blockchain technology has become the mainstream, still faces inherent challenges and risks.