Security a priority for EU’s INATBA blockchain taskforce

The European Commission’s new blockchain initiative, the International Association for Trusted Blockchain Applications (INATBA), should focus on quashing extant security concerns around the technology at a time Ripple’s general counsel Stuart Alderoty calls “pivotal for the industry”.

More than 100 firms have joined the new association, including BBVA, SWIFT, IBM, Iota, Ripple and ConsenSys. The organization has been issued with the objective of promoting “an open, transparent and inclusive global model of governance for blockchain and other distributed ledger technology infrastructures.”

“It is encouraging that the European Commission has created an environment to support blockchain and distributed ledger technology,” said Jerome Nadel, senior vice president and general manager of payments at Rambus, in an email. “As blockchain gathers momentum, however, the cryptocurrency exchange breaches of recent years have made it clear that a new approach to security is required for all blockchain applications.”

The issue of private key ownership, and private access to a blockchain entirely, was raised in February when Canadian exchange Quadriga announced that it owed users CA$190m in currency it could not obtain, as founder Gerald Cotton had died without disclosing the passwords or recovery keys to computers on the network.

A 2017 paper from the European Union Agency for Network and Information Security (ENISA) outlines a selection of security dangers inherent in the use of a blockchain network. Chief among these is the threat of consensus hacking, in which a user or group on the chain controls 51% of voting power on the chain. It can result in a malicious attacker refusing to process transactions and re-use assets already spent.

Mariya Gabriel, European commissioner for digital economy and society, said in a speech delivered at the INATBA launch event: “Europe must make more of technological innovation and blockchain technology is an innovation that Europe cannot afford to miss. At the same time, it is clear that we need strong governance if we want to get the most out of distributed ledger technologies for the general interest, that means for our economy and for our society.

In April 2018 the European Commission launched the European Blockchain Partnership (EBP), with 21 initial member states signing on to “support the delivery of cross-border digital public services.” The following month it created the EU Blockchain Observatory and Forum, designed to track and monitor existing blockchain initiatives in the European Union. According to Commission figures, more than €141m has been allocated by the EU to blockchain-related projects, with a further €340m committed by the end of 2020.

“This is a pivotal time for the distributed ledger technology industry. It is critical that as an industry we unite with other key players and work closely together to engage with regulators and governments across the globe,” said Stuart Alderoty, general counsel at Ripple, in an email. “Industry collaboration to support the wider implementation of distributed ledger technologies can only have a positive impact for greater blockchain adoption in and beyond the EU.

“The work we’re seeing with the European Commission is fundamental as it leads the charge towards greater adoption of blockchain technology. With the introduction of INATBA, there will be more transparency in blockchain as we work with regulators to develop a trust-based framework for the use of distributed ledger technology in the EU.”

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