As a secure and transparent distributed ledger technology that underpins the growing use of digital assets, blockchain has an increasingly important role to play in business processes. However, as with any emerging technology, risks are inevitable, making it essential for companies to proactively identify and manage them.
From end-to-end tracking of goods in the supply chain, facilitating real-time cross-border payments to automating insurance claims, blockchain is the foundational technology that offers opportunities to improve business efficiency. Given its public and open nature, blockchain transactions enjoy a high level of transparency. Not only can the life cycle of a transaction be traced, but once data is stored, it is not likely to be modified.
Challenges to verifying data
For blockchain to work effectively, it needs ‘block explorers’, which are defined as websites that allow you to browse all the transactions on a blockchain in a simple and visual way, with account balances and transaction histories visible to everyone. While some block explorers specialise in single blockchains, others support multiple blockchains, with well-known providers including Etherscan, Blockstream and Solscan. What these blocks explorers have in common is that, in effect, they are black boxes, meaning it is uncertain how the data is retrieved or how it is processed before being displayed.
This reliance on unaudited and unverified block explorer websites, whose design and operation are unclear, carries risks. It is therefore important that organisations assess these risks and examine alternative solutions.
Assess the different solutions
An alternative to using block explorers is to run a blockchain node. Blockchain nodes are computer programmes that enable data to be shared with others in real time so that the accuracy of the data received can be constantly verified. There are several types of blockchain nodes including: light nodes, full nodes and archive nodes. These different nodes store varying amounts of information and therefore require different levels of storage and initial synchronisation time.
By default, a blockchain node will expose an entry point, called a remote procedure call (RPC) which allows access to certain data. The RPC gives access to smart contract data, allows to retrieve the balance of an address or a transaction receipt. While these functions differ from one blockchain to another, the parameters vary and RPCs allow users to browse and retrieve a fairly large data set.
For ease of implementation, it is not necessary to run your own node. Indeed, some specialised companies provide public RPCs for querying data. Public RPCs are shared entry points, managed by service providers like Infura or Alchemy, which let users access blockchain data without running their own infrastructure. However, these systems come with certain constraints such as pricing, limitations on the number of calls per day/per minute and the fact that calls are tracked and the caller's identity is recorded.
In addition, the functions available via RPC remain quite limited because the data available varies depending on the different node clients, such as Geth, Erigon or Bitcoin Core. Moreover, there is no function that allows you to retrieve all transactions for a specific address, which is one of the main features of block explorers.
It is up to the end user, therefore, to decide whether these constraints are acceptable in exchange for the ease of use offered by a public RPC.
Browse transactions without third parties
It is possible to browse transactions without a third party by using an indexer. The role of the indexer is to retrieve all transactions as soon as they become available on the node, then to reorganise them into a database indexed by address. The ability to access a database directly in this way offers the same features as a block explorer.
However, several issues remain:
Synchronising the indexer requires an ’archive node’, which requires a lot of computer storage and power.
The costs of database storage and computation for the indexer can also be very high, requiring as much as twice the resources of the archive node.
Implementing an indexer can be complicated as it requires knowledge of programming languages and a clear understanding of the specific features of the blockchain being indexed.
A basic understanding of databases to optimise data storage and retrieval speed, as searching through a database of millions of transactions can be time consuming.
Identify key risks
Data accuracy, transparency and integrity directly underpin an organisation’s decision-making, operational efficiency, regulatory compliance and stakeholder trust. This applies to both internal and external data users. For example, auditors are responsible for assessing the compliance and reliability of an organisation's financial processes by examining financial statements and identifying risks.
Other risks include the potential for hackers positioning themselves between a company computer and the blockchain explorer, intercepting and sending back false data while pretending to be the legitimate site. There are also questions about the desired level of interoperability, both within the broader blockchain ecosystem and with any mission-critical legacy systems currently in use. These conditions extend to understand the strategic risks that may arise during deployment of a blockchain solution, including potential challenges related to governance, scalability or integration with existing processes. It is important to assess whether weaknesses in the blockchain system’s design could result in non-compliance with regulatory requirements or breaches of confidentiality agreements governing data.
In addition, as most block explorers are hosted on cloud giants including Amazon, Google or Azure, there is the risk of censorship that could disrupt, restrict or even shut down access to those explorers. With a relatively small pool of block explorers to choose from, market monopoly presents a real risk. Any monopoly on data exploration can also influence the use of the blockchain itself. Taken together, these risks mean that many users may turn away, at least temporarily, from using blockchain technologies as a precautionary measure in the event of a failure of the largest block explorers.
Take a forward-looking approach
While the world of blockchain is often perceived as a black box technology offering a limited and potentially misleading view of transactions, the ability to access data through RPCs or to create custom indexers opens the door to greater transparency. Users could then explore and analyse transactions associated with a specific address independently.
This forward-looking approach promotes the democratisation of information on blockchains, thereby strengthening trust and understanding within this innovative technology. Ultimately, the ability to explore and understand blockchain data in a personalised way offers a more open and participatory perspective on this ecosystem.
Finally, while to date no blockchain explorer has deliberately exposed false data, these risks still warrant careful consideration. Understanding what blockchain system suits your business model and clarifying how cyber security, compliance and strategy are addressed will put your company in the best position to reap the benefits blockchain can offer.
Frequently asked questions
How does assured access to blockchain data support strategic decision making?
Reliable access to accurate on chain data strengthens enterprise governance, improves transparency, supports regulatory compliance and ensures leaders can make informed decisions rooted in verifiable operational and financial information.
What strategic exposures arise when organisations depend on third-party blockchain explorers?
Reliance on external explorers introduces uncertainty around data integrity, creates vulnerabilities linked to cyber security and availability and may compromise an organisation’s ability to validate critical information independently.
How can establishing proprietary blockchain infrastructure enhance organisational resilience?
Operating internal nodes or indexers provides controlled access to verified data, reduces dependence on external providers, improves audit assurance and strengthens long term compliance and operational continuity.
