While there has been a significant increase in the amount of attention that has been given in recent months to the rise and interest in Artificial Intelligence, it’s important to continue to evolve and incorporate other emerging technologies into IT strategies. The industry’s focus on blockchain and distributed ledge has been relegated to the back burner due to the rise in the conversion on AI and Generative AI (How Blockchain And AI Are Set To Transform Small Businesses) and a number of negative headlines in the crypto space (Case Study: FTX and Sam Bankman-Fried).
The adoption of blockchain and cryptocurrency for the financial, regulatory, and FinTech industries, as well as B2B and B2C applications is still a reality in today’s world. Speed of adoption may vary among sectors, but one thing is for sure –all businesses should be planning for blockchain readiness. This includes modifying digital platforms and core systems for use of blockchain technologies underpinning IT systems, as well as the adoption and use of crypto in financial systems.
QA Consultants has already been engaged by public and private sector organizations to implement quality engineering solutions for the roll-out of crypto platforms and the conversion of existing platforms to integrate crypto commerce. In fact, QAC has enabled financial processes to support payments from and to partners via crypto as well. However, QAC’s experience with customers has been eye-opening, and it is important to share initial observations, challenges, and considerations that technology and commercial officers need to be thinking about now. QAC has already seen early adopters like Vast Bank, which became the first nationally chartered, FDIC-insured bank to offer crypto banking by allowing customers to transact in cryptocurrencies through a user interface. (ABA Banking Journal Podcast, Community Banking Technology, September 2021).
Functionality – Does it Work?
The amount of innovation that affects core systems and digital platforms requires even more sophisticated quality solutions and pragmatic approaches to managing and improving quality. Primarily, it will no longer be optional to exclude application quality and security processes from every aspect and stage of the software development lifecycle. There is a focus on user interfaces in a wide range of devices including mobile, wearables, and even smart TVs. On the back end, core systems (e.g., banking and retail ERP) will need to be re-staged to accept crypto transactions and likely re-tooled for a plethora of new compliance and regulatory reporting requirements (Cryptocurrency, Digital or Virtual Currency and Digital Assets 2024 Legislation).
The addition of cryptocurrency to traditional fiat systems (fiat currency is government-controlled money such as the U.S. dollar, Nerd Wallet, 2024) requires the adoption of new physical hardware, such as point-of-sale equipment (Cryptocurrencies as an Alternative to Fiat Monetary Systems). More APIs and interfaces need to be tested as they integrate into the blockchain-based networks and supporting infrastructure. Further, the quality of the customer experience often leaves a lot to be desired for novice consumers.
Performance – Does it Scale?
So much is talked about with regard to the transaction speed of the numerous cryptocurrency networks that are out there (Average transaction speed of 74 cryptocurrencies with the highest market cap). There is much conversation about how slow transactions on the Bitcoin network are, why the Lighting network was created, and similar issues with all the other major cryptocurrencies and their continued design changes to support improved transaction speeds and lower costs.
However, there are so many other parts of a complete transaction that can benefit from higher performance or contribute to poor transactional performance and customer experience. Software beyond the blockchain is a critical party of the digital ecosystem that companies should optimize. Digital wallets and exchange platforms can benefit significantly from one-second and sub-second response time increases. As the price of cryptocurrencies continues to be very volatile, milliseconds matter.
There have been many decentralized and traditional platforms suffer from significant outages and delays due to overwhelming demand (Understanding the crypto-asset phenomenon, its risks and measurement issues). These outages are preventable, as well as the ensuing customer abandonment and lost revenue. As observed on eCommerce platforms, speed plays a significant role in end-user satisfaction. Slow sites, where a customer wants to continue before the site is “ready,” suffer from very high abandonment. With many exchanges available and moderate switching costs, the fastest provider will win the largest customer share.
Vulnerability – Is it Safe and Secure?
While blockchains and cryptocurrencies are immutable, the systems managing digital wallets and exchanges are running on traditional web 2.0 systems with significant vulnerabilities in the architecture. They are run by humans who are the weakest link in system security. For example, the Robinhood voice phishing or “vishing” event in 2021 (Bloomberg, November 2021), where one representative accidentally gave a hacker access to the personal information of nearly 7 million customers, is an alarming incident. Everyone must be hypervigilant in continuous application vulnerability assessments on these platforms, as they are constantly changing and consistently under attack internally and externally.
Vulnerabilities in point-of-sale systems are also of great concern. Any physical hardware with embedded software and firmware will be at risk of more and more sophisticated entry points. A more robust approach is being seen to bad actors and susceptibility to vulnerability and failure of these devices as they are adopted for crypto. Businesses must know all details of all vendors being used for physical connection to their digital networks and thoroughly vet and test these systems for performance, security, and functionality.
Crypto Application Case Examples
QA Consultants has witnessed an increased demand for our crypto and distributed ledger quality engineering services. In fact, QAC has been conducting engagements across all three of our core service pillars (Functional, Performance, and Security). Teams are supporting the latest challenges presented by modern architecture, crypto-asset networks, and complicated teams distributed globally. For a digital wallet application, QAC successfully tuned a system from supporting less than 10k concurrent users at 2-minute response times to one million concurrent users with .002 second response times. In other products, QAC successfully identified major security vulnerabilities at both the hardware and software layers in one day that could have led to millions in lost revenue. For a digital bank, QAC supported the migration to a core banking and crypto custody system through robust integration testing. In these engagements, teams partnered with development and business counterparts to bring these products to market with higher quality than originally expected.
At the end of the day, technology, operations, compliance, and marketing leaders have entered a new learning curve to identify how cryptocurrency will reshape their businesses and how blockchain solutions will underpin their tech stack. If they haven’t yet started these conversations, they will soon – everything from core applications, customer digital platforms, hardware and devices, and the business processes that support virtually every industry sector will require a transformative eye and inclusion in strategic plans to sustain a competitive position in the crypto era. As you think about your systems and platforms and impending change, QAC recommends aligning your development considerations and planning for these questions… Does it work?… Will it Scale?… Is it secure?
QA Consultants — now part of ALTEN Group and its global scale and capabilities — provides quality engineering solutions to enterprise blockchain and crypto programs, including building and deploying digital wallets, assessing embedded software quality and security/vulnerability for cryptocurrency POS, and performance engineering for crypto eCommerce platforms and monetary exchanges.
Brian Bernknopf
Managing Director, U.S.
