The introduction of new technology carries with it a certain amount of risk, which needs to be successfully managed by any company using to carry out business. This fact is especially true for Blockchain because its distributed ledger technology comprises not only an application but part of the core infrastructure of the operation.

As a decentralised system, Blockchain promises to make businesses more transparent, secure and efficient. But so far it is unregulated, and there are likely to be risks for the companies and the market as a whole. First of all, there are two kinds of blockchain: the permissioned and the permissionless.

Permissioned blockchains are those which are set up by an administrative entity, single or collective, which is empowered to evaluate any other entity’s participation in the network. Permissionless blockchains, on the other hand, allow any entity to participate in the blockchain network without any prior vetting. Both types use smart contracts to execute code on the blockchain which enables peer-to-peer transactions.

The P2P framework will transform business practice, with its unchangeable, transparent transaction histories, improving efficiency and getting rid of middlemen. This, in turn, reduces costs and settlement times and makes supply chains less complicated and time-consuming. Algorithms will replace human trustworthiness and inefficiency but may have other hard or software-related risks which are yet to be discovered.