Blockchain has been considered as one of the disruptive technologies across all industries. It is particularly essential in the financial services sector and the field of supply chain and logistics. The technology has garnered a lot of interest from large industry players as it is effective in storing data they glean over the years. In the modern data realm, blockchain has a crucial role to play, offering crucial potential advantages to businesses.
As a distributed ledger technology, blockchain typically breaks vast amounts of data into small parts and distributed them across the entire network of computers, instead of transferring them to a cloud server or storing it in a single location. This means the technology is lacking a central control point that is beneficial for securing data. It significantly cuts down the need of middlemen or a third-party engagement to process a transaction.
Heightened Threats of Data Privacy and Security
The threat around data privacy and their security is rising day by day, with the continuing progress of digitization in the modern digital world. This data security concern is also threatening cybersecurity practices of traditional businesses as cybercriminals or hackers are leveraging more sophisticated methods.
The last couple of years have seen major user data breaches and hacks that have led companies to reconsider their data security practices using advanced modern technologies. For instance, the Bangladesh Bank’s server breach by anonymous hackers with stealing US$100 million, and cyberattack in Tesco Bank in the UK which resulted in money being siphoned out of some 20,000 accounts, all these are the result of inadequate cybersecurity practices in some way.
Leveraging blockchain solutions can provide companies with a robust way of ensuring security to private and confidential user data while delivering valuable benefits in a simplified and automated way. Most businesses in consumer products and services are already capitalizing on this technology to secure consumers’ data.
While blockchain is often associated with cryptocurrencies, such as the well-recognized bitcoin, it records and indexes each movement of bitcoin, creating a searchable database of every transaction in the process. Unlike conventional digital ledger solutions that record information on a central server, blockchain stores transaction data across vast networks of computers that check and validate the information with each other constantly.
As blockchain offers a decentralized network of database and hinges on transparency, it also provides encryption and validation methods to safeguard user data. For example, if an organization implemented blockchain solutions enters user or transaction data into its systems, validation of the data is done through a quick consensus between the servers of the network stakeholders. This data after validation is immutable unless authorized changes are granted by the stakeholders. Afterward, the data is encrypted with the highest level of encryption protocols to further ensure data security and stored on the blockchain network used by the stakeholders.
The technology could also be used in the public services sector in order to keep public records decentralized and safe. By storing individuals’ personal information across a network of computers, authorities can make sure their people’s data are secured as the task of compromising data becomes much more intricate for cybercriminals.
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