Forensics Monitoring Is Blockchain’s New Sheriff

Blockchain technology is becoming a lot more than just a buzzword. Every day, companies worldwide are beginning to look to and integrate these networks into everything from their financial systems to supply chain management. However, adoption hasn’t been as fast as it could be, and this is due to teething problems that come along with these new platforms. 

From essential compliance to fundamental security assurances, blockchains, in their current state, lack many of the requisites for widespread enterprise adoption. The industry is in desperate need of policing, but this can't come from the regulators or third parties. Fortunately, forensics monitoring presents the perfect blockchain-based solution. 

Modern blockchain technology has come a long way in a reasonably short time. In the beginning, there was Bitcoin, dubbed blockchain 1.0, which provided a revolutionary and permissionless means of transferring value. Then came blockchain 2.0, Ethereum, and the introduction of smart contract platforms, allowing for the development of entirely new decentralized applications. Blockchain 3.0 evolved this system further by introducing scalable solutions for these networks, boasting such evolutions as Delegated Proof of Stake (DPoS). The benefits for speed, security, and energy consumption were notable over the competing Proof-of-Work (PoS) architecture. This has led to a world where enterprise businesses are beginning to take note and seek to implement blockchain into their own working models. 

However, as this adoption is occurring, many are finding stumbling blocks along the way. If there were such a thing as natural selection for blockchain, security would undoubtedly be the next step in the evolutionary chain. This is where blockchain 4.0 comes into play. 

Major organizations can’t afford any mistakes if they are going to adopt this technology as the backbone of their financial network. Some enterprises may be more willing to take risks than others, but most simply need solutions that are proven to work. Though protocols such as the popular HotStuff consensus industry-standard are significant steps in the right direction, they still come with some problems. HotStuff is a powerful Byzantine Fault Tolerance (BFT) system that provides fast finality of blocks and has even been adopted for the upcoming Diem stablecoin. However, it still has the issue of risk should more than ⅓ of nodes on the network begin acting maliciously. 

The odds of this are small but not irrelevant — especially for smaller private networks. Suppose a major institution should want to adopt this technology, issues like this need to be mitigated. Certain blockchains such as Ethereum 2.0 are attempting to deal with problematic actors through a process known as “slashing.” This is where nodes that are identified as malicious are cut off from the network and lose their stake. The theory is sound; however, current implementations are crude enough that sometimes simple glitches can cause honest validators to be slashed and see their staked funds disappear. Once again, this is unacceptable for professional business purposes. Moreover, Slashing places the onus on network nodes to root out the bad actors. This means that some will inevitably slip the net, and others may be falsely accused. 

The harsh reality is that problems such as these keep many companies from adopting blockchain. ​​In fact, according to a recent analysis, security concerns and an unstable regulatory environment are two of the main issues stymying blockchain market growth. Furthermore, if central banks are ever going to roll out their own digital currencies, these problems are going to be all the more pressing and could stand in the way if not solved. What’s optimistic is that it doesn’t have to stay this way. A new open-source and on-chain forensics monitoring system may be just what blockchains need to clean up their act. 

The system could be analogized to an automated judiciary system that tracks down and removes malicious nodes — enhancing blockchain security, accountability, and attributability. 

The protocol builds on the Slashing mechanism, but rather than relying on adjacent nodes to hunt down malicious nodes; the forensics system eliminates wrongdoers autonomously. In the low probability event that more than ⅓ of the system displays a Byzantine fault, afflicted nodes would get shut down before they can cause any network instability, allowing the system to operate as it should.  

The evolution of this revolutionary forensics system could be equated to a “new sheriff in town"  maintaining an orderly ecosystem through systemic checks and balances. This protocol can reign in the wild west of decentralized finance (DeFi) and reduce the time institutions and enterprises spend in limbo between indecision and adoption of blockchain and crypto. 

Forensics monitoring stands to overcome the security and accountability issues plaguing blockchain adoption for so long. The novel tech has already seen interest from several prominent projects, including Facebook’s Diem. 

This means that blockchains may just be getting ready for primetime. 

Whether an institution wants to run a public or private chain, they’ll want all the benefits of these systems but without the headaches. Implementing forensic monitoring of the network at the protocol level means there is effective ‘policing’ for decentralized ledgers. Even the most organized attacker will be unsuccessful in changing blocks, and there will be no risk of a simple code issue causing a significant loss of funds. This is what enterprise business has been waiting for. The hope — as well as belief — is that once companies begin catching on to the power being offered here, they will start falling in line with the new technology. The final roadblocks to adoption seem to be getting torn down, and soon blockchain-powered companies may be the norm in the business landscape, not the exception.