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Making A Shift to Cloud-Hosted Security for Blockchain and Cloud Data

Written by Ahmet Tuncay, chief executive officer of Sepior

Enterprise Shift to Cloud Drives Shift Toward Virtualized Hardware Security Models (HSMs)

Cloud economics and the expanding availability of cloud-based productivity, infrastructure, and platform services is accelerating the transition of enterprise applications to the cloud.

The increasing adoption of public/private hybrid multi-cloud environments present new challenges for traditional enterprise security solutions, including encryption key management schemes that depend on on-prem or hosted hardware security modules (HSMs). While appliance based HSMs are very effective for protecting cryptographic materials within a single trust boundary, they can become expensive, require complicated management, and lack agility against new types of malicious attacks in fast changing multi-cloud environments. As a result, there will be accelerated adoption of pure-cloud virtualized HSMs and key management as a service (KMaaS) solutions designed specifically to support business applications running on hybrid multi-cloud environments.

Cloud-based virtualized HSMs and KMaaS offerings are proving to be highly attractive to increasingly strained IT budgets, and the ability of these systems to secure content in private data centers, public and private clouds, and across multiple cloud providers serves as the catalyst for their adoption.

Blockchain's Transition from PoCs to Production Increases Emphasis on Privacy and Interoperability

Permissioned blockchain projects picked up a lot of steam in the past twelve months, with many large-scale enterprise consortiums announcing one or multiple projects. Many are transitioning from proof of concept (PoC) to real world pilots and initial production. While the indelible distributed trust benefits of blockchain are compelling for an array of enterprise applications, the practical realities of scalable performance, privacy control, interoperability between systems, and maintaining compatibility with rapidly evolving platform technologies raised big yellow warning flags for many projects.

The industry is now better able to understand and incorporate more flexible off-chain technologies available to remedy the limitations of enterprise blockchain applications, including flexible key management and zero knowledge (ZK) proofs. Off-chain solutions tend to be interoperable across a wider range of existing systems and provide the agility to adopt to new business requirements while maintaining compatibility with emerging platform technologies.

A Shift to More Effective Cryptocurrency Wallet and Exchange Security

The past six months have been a tough road for cryptocurrencies, both in terms of plummeting valuations and losses due to coin thefts. Nearly 96% of all thefts in 2018 were from attacks on exchanges as opposed to individual wallets. Approximately half of all cryptocurrency exchange thefts to date occurred in 2018. The market shift to larger scale institutional investors will mandate better security and compelling security assurances to enable these new customers to participate in any emerging cryptocurrency economy.

 

Expect to see exchanges migrate wallet services from single signature transaction approvals to multiple party approvals and the adoption of threshold signatures to mitigate custodial wallet security concerns while reducing transaction fees and lowering operational costs associated with trades.

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About the Author

Ahmet Tuncay

Ahmet Tuncay, chief executive officer of Sepior

Ahmet is the Chairman and CEO of Sepior, a company dedicated to protecting the confidentiality of business information and integrity of transactions through advanced cryptography. Before Sepior, Ahmet was CEO of Soonr, a secure content management SaaS provider to over 150,000 businesses that was acquired by Autotask. Before Soonr, Ahmet held executive roles at SpiderCloud and Trapeze Networks, an enterprise wireless company acquired by Juniper. Ahmet was the founding CEO of SolarFlare, a fabless semiconductor company, and held management and engineering roles at PairGain Technologies, SynOptics Communications, and Electronic Data Systems.

Published Monday, February 25, 2019 8:29 AM by David Marshall
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