In an Enterprise Security article, Guidehouse has recommendations and precautions for the energy industry's blockchain use
Blockchain is a source of hope for many in the energy industry seeking market innovation and transformation. However, the technology and its uses are still in their infancy, leaving many in the energy sector wondering how successful this technology will be.
In an article for Enterprise Security, Richard Shandross, associate director at Guidehouse, discussed the current and future state of blockchain, identifying hurdles companies will face as the technology is used more frequently in the industry.
Shandross explained that the majority of the sector’s current blockchain efforts are pilots and proof-of-concept projects and are typically used when multiple parties need to coordinate in an environment of no or limited trust. He noted that one barrier to blockchain’s further success is that many energy applications will largely involve assets that exist independently of the blockchain.
“The provenance, validity, and value of external assets cannot be determined or protected using only a blockchain, no matter how immutable its data,” Shandross said. “To reach blockchain’s full potential, solutions need to ensure the integrity of both the input and output data streams in addition to the protection of the blockchain itself.”
External and internal vulnerabilities are also a concern. According to the article, external hacker attacks and internal design flaws have caused blockchain systems to fail in other companies. Additionally, some energy blockchains will have monitoring and/or control of power-grid or other equipment, which need to be carefully designed in order to avoid breaches.
“…Engaging with blockchain should be accompanied by a sound due diligence approach," Shandross said. "Be sure that it covers benefits, system and business process compatibility, verification that the solution will behave as advertised, and a vulnerability assessment.”