EU security agency ENISA has released a report on blockchain technology that analyzes the potentials of the technology and identifies security benefits, challenges and good practices.

The report titled ‘Distributed Ledger Technology and Cybersecurity: Improving information security in the financial sector’ points out to some principles that are used in the security of the traditional system blockchain, like key management and encryption that are largely the same.

“Cyber security should be considered as a key element in the Blockchain implementation by financial institutions,” Udo Helmbrecht, Executive Director of ENISA, said in the release.

The paper focuses on providing financial professionals in both business and technology roles with an assessment of the various benefits and challenges that their institutions may encounter while implementing a blockchain. The challenges of blockchain identified by the report include traditional challenges that have key management, privacy, and code review and technology-specific challenges that have a significant generation, smart contract management, and scalability.

There are also some good practices that are recognized to overcome identified issues and introduce key concepts that decision-makers must be aware of while approaching blockchain technology. The good practices include using recovery keys, multiple signatures for authorizing and processing transactions and library of standardized smart contracts.

“In this paper, we have also identified that there are challenges that may require further development, such as anti-money and anti-fraud tools, interoperability of blockchain protocols and the legal provisions as well as tools for implementing privacy and the right to be forgotten,” the paper stated.