Blockchain could be an unknown term in any era, but in the present, it has sparked global hype. According to Transparency Market Research, blockchain’s value is expected to reach $20 billion by the year 2024. This technology has an extraordinary potential to cut costs, especially for financial organizations.
While many technologies face security challenges, blockchain is somewhat different. So far, it has not confronted potential data security threats, but it isn’t a panacea. It can provide benefits to business, but before adopting any new technology, it’s important to have thorough understanding of it.
Blockchain has some critical points that necessitate a clear strategy and strong cause to adopt it. Let’s look at some of the distinct data security benefits of blockchain technology.
Data storage in a single location does not occur with blockchain. Rather, this technology distributes the data across the network of computers after breaking it into small pieces. Because of this decentralized management, blockchain prevents data loss in a way that every node or computer reserves a complete copy of the digital ledger for the transaction.
This mitigates the need for third-party assistance during the transaction process. The risk of the middleman is not there with blockchain, and you don’t have to rely on a vendor or service provider.
Verification and Encryption
Blockchain uses encryption for everything that is retained into it. That makes it also possible to prove that the data has not been changed. The data is available across all the ledgers on all the computers or nodes and one can check the file signatures as well. This way anyone could check if there has been alteration and if something is changed, the signature is rendered invalid.
The validation and encryption process helps you to maintain unaltered data with the third-party cloud vendors even for years. Using blockchain ledger, anyone can get reliable and independent data verification.
Option to Maintain Private or Public
There are two types of blockchain: public and private. This option creates a striking difference and a variety of options for individuals; for detailed knowledge, you can visit a blockchain lab.
Public blockchain has the anonymity factor too, but the private blockchain only gives access to a specific user. Private blockchain users can avail the benefits of a peer-to-peer network, but the privileged access is only given after the identity authentication. Also, this type of blockchain could be limited to certain transactions.
Nearly Impossible to Hack
Conventional networks and data repositories are always at risk of cyberattack. Hackers could easily access, alter and corrupt the network, which has all the data stored at a single location.
Blockchain technology, however, can be nearly impossible to hack. With the encryption, decentralization and validation across the entire network, blockchain mitigates the risk of alteration or complete removal. Any change could easily be noticed, and the signature is invalidated.
Is All Good?
These perks and InfoSec enhancements are beneficial, but there exist some limitations and issues with blockchain. One basic thing to bear in mind is the network coverage—you could be a victim of a cyberattack if your data isn’t well-dispersed.
For blockchain to work, it is important to consider the bandwidth requirements and large network communication expense.
It is still early to deem blockchain completely safe, as hacking and cyberattack methods are changing constantly. But, blockchain has potentially incited a positive impact on data security world.