Blockchain technology has been heralded as a disruptor for countless industries, bringing about much change and opportunity for any sector from finance to journalism to insurance among others. Unlike anything that preceded it, blockchain technology is an enabler of trusted digital relationships—even without a centralized administration.
As an emerging technology that’s still in its developing stages, countless organisations have struggled to understand and utilise the applications of blockchain in solving real-world problems. In particular, several factors hinder broad consumer adoption and blockchain enablement when it comes to the world of banking and transactions.
Due to the fact that blockchain systems are unable to interact with off-chain applications, users find that leveraging blockchain the way they usually do in moving and sharing money now poses a challenge. This disconnect between the off-chain and on-chain processes is also a cause for concern security-wise. In the hands of fraudsters, a user’s private key could be used to approve transactions under the assumed identity of the owner—or to steal away cryptocurrency from a digital wallet.
Further issues crop up when users look to give authorization to a trustworthy third party to carry out a transfer of funds via power of attorney or put more security measures in place. In order to solve these challenges, Singapore IT security companies must find a solution that integrates blockchain systems together with off-chain applications, all while maintaining solid security and the range of features users are accustomed to. A way this can be done is by making use of smart contracts to gain access to existing solutions grounded in reality.
Much like Singapore’s Singpass 2FA setup, the smart contract accesses a third-party authentication service provider through the internet. Once the user sends out a request to validate a one-time passcode, the smart contract issues the hash—which contains the OTP transmitted via the application program interface for the off-chain 2FA. The smart contract validates the one-time passcode, confirming the user’s identity and thereby allowing the transaction to carry through.
The introduction of multi-factor authentication in blockchain technology brings the security and functionality of blockchain transactions to the next level. How so? Simply with its ability to prevent malicious identity thieves from utilising stolen private keys while simultaneously permitting users to provide verification for transactions even in a situation where their keys may be compromised.
In order for any secure blockchain platform to work in the mainstream, security systems require mechanisms that provide alternative methods in the verification process. As blockchain solutions evolve, the possibilities of what can be done with it are endless. Businesses in complex supply chains can track the flow of goods and carry through with payments once conditions are met. Insurance companies could integrate underwriting systems with block-chain to track the ownership records of highly valued property.
Most importantly, at the end of the day, crypto bank customers can rest assured that their digital funds will always be usable and accessible—even if their private key were to be leaked—a promise that no other IAM technology is able to make.