Despite the fact that Blockchain technology is widely associated with cryptocurrency and is primarily known as the innovation pushing Bitcoin and Bitcoin price up, experts have been predicting a much longer list of industries that it will disrupt due to its features. Blockchain can provide transparency, decentralization, efficiency, security, and other benefits, revolutionizing multiple industries. In addition to predictions that Blockchain will improve the world of data security, experts have listed well over a dozen other industries it will transform, including:
Supply Chain Management
The list goes on and on, with some even referring to Blockchain as “the most disruptive technology in decades.” With Blockchain’s potential to add to data security along with other industries, the question becomes whether the technology behind cryptocurrency is as disruptive as experts claim.
When you examine specific ways that Blockchain has changed this sector, it becomes clear that yes, it is indeed disruptive, although there are still some problems it must overcome to truly revolutionize data security.
The inherent structure of blockchain provides added security
Just the basic structure of Blockchain, without any applications or platforms built on top of it, provides added data security. In terms of security as a whole, the trustless nature of Blockchain means that users do not need to rely on a third party to complete a transaction. Most importantly from a data perspective, everything that happens on Blockchain is encrypted. There is no way for a hacker to tamper with the information stored on Blockchain and hide this action from others.
By its very concept as a highly decentralized system, Blockchain is inherently more secure than a traditional data security system. While most current data security systems are easy to find in a single location, the distributed nature of Blockchain means that it is much harder to hack. The lack of control by a single group means there is not a single point of failure.
Blockchain revolutionizes data storage via distribution
The security of data closely relates to its storage, another area that Blockchain revolutionizes. Instead of storing data in a cloud, Blockchain can take advantage of distributed storage. In this way, the system:
Breaks the data into smaller chunks,
Encrypts it so hackers cannot access the information,
And then distributes the files.
This process secures the data in two ways.
Your data receives protection from network outages as it is stored at multiple locations across the network instead of a single point. This means users can access data even if some of the network goes down.
Additionally, the encryption process provides security from those looking to access data they should not be able to. In this way, it can ensure privacy and keep sensitive or personal information out of the reach of hackers. As soon as someone alters a record, the signature becomes invalid.
With a traditional storage model, hackers must only breach a single server. By contrast, with Blockchain, you must compromise the majority of its network to make fraudulent transactions or falsify balances. Even hacking one server is challenging for experienced cybercriminals, so hacking enough to represent the majority is a nearly impossible feat. To provide even more security against this type of data risk, consider that the hackers would have to breach every node at the same time.
Blockchain can prove data is untampered
Instead of opting for distributed data storage with Blockchain, it is also possible to save a specific document’s cryptographic signature. As long as a file has this signature, users will have the assurance that no one tampered with the document. This method allows you to store the file on whatever system you typically use, whether that is cloud-based, but still receive the security of the blockchain by confirming you view the same version of the document.
Ability to store currencies offline
Data related to currency and a user’s balance becomes more secure with Blockchain due to the ability to store cryptocurrency in offline wallets. As these wallets are offline, they are nearly impossible to hack, as an attack would instead need to focus on the decentralized blockchain.
Blockchains can be public and private
When discussing Blockchain and data security, it is important to distinguish between public and private blockchains. Both have the inherent advantages of a distributed network, encrypted ledger, and other factors mentioned above. However, public blockchains allow anyone with a computer and internet to join, while private blockchains only allow specific users to join. By nature, this makes private blockchains more secure than public ones, meaning they provide a larger disruption to data security.
There are also considerations as to the type of data stored. Those who set up public blockchains typically do so to provide anonymity, while private blockchains rely on a user’s identity to confirm access privileges, meaning that information must be disclosed. In this way, the anonymity of public blockchains can provide additional data security for some.
Examples of platforms that change data security
Descriptions of how Blockchain disrupts data security are not as effective as examples in some cases. Forbes recently compiled a list of blockchains that specifically target and revolutionize data security in different ways. The blockchains listed allow their users to benefit from:
- a keyless signature infrastructure with a certificate authority that maintains a cache with public keys and asymmetric encryption
- elimination of passwords to mitigate the risk of breaches due to human factors and reliance on SSL certificates instead to authenticate devices, using blockchain to disrupt the way information is stored and accounts are accessed
- messenger services that scatter communication metadata across the distributed ledger and limit the amount of information that users must provide to use the service
This are just a handful of the current blockchain platforms and applications disrupting data security, and many more are sure to arrive in the future.
About the author: Mary Callahan is an expert on Bitcoin-related topics. She has published articles on blockchain security, bitcoin purchase guides, and bitcoin regulations in different countries.