Ensuring Safety and Security in Blockchains: A Private Capital Markets Example

Abstract

The defining and a critical characteristic of blockchains powering the token economy is their potential to forge a strong ecosystem of disparate and widespread partners in a loosely coupled matrix of trusting relationships and dependencies. As blockchains increase their footprint in the business world, their ability to provide credible assurance of the safety and security of transactions will play an increasingly important decision factor for adoption and trust. In this chapter, we illustrate several risk mitigation principles involved in developing a safe and secure system with a live blockchain-enabled digital ecosystem called KoreConX designed to serve the needs of private capital market participants. We begin by describing the characteristics and challenges of modern digital ecosystems. Next, we explore the main components of safety and security, ranging from the purely technical security to the broader issues of safety through validations, governance, and distribution of control. We address the need of the various participants to maintain their individuality, value proposition, brand, and privacy, while also sharing data on a need-to-know basis and power on a need-to-act basis.