The technology behind Bitcoin and other cryptocurrencies, named blockchain, is only just beginning to be applied outside of currencies and DApps, or decentralized apps. The use cases for this tech are wide-reaching and revolutionary. Now that more institutions are taking the crypto space seriously, the value of crypto assets will soon leave the speculative markets and be judged on their tech merits.
Improved security is one of the many use cases for blockchain technology. It isn’t an exaggeration to say that the world of digital security is about to be flipped on its head – and that’s probably a good thing.
Before we dig into how blockchain will revolutionize the digital security industry, it would help us understand what the technology does. The following may be confusing, and if it is, that means that the cryptography involved is working as intended!
Block + Chain = Blockchain
A brief and functional definition for our purposes is that blockchain tech stores blocks of information in connected chains. The access to this ledger of information is decentralized, meaning that there isn’t one place or one computer system that keeps these records secure.
Anyone has access to the entire history of the block sequence, and every time a new block is verified, the previous blocks become practically unalterable. To change the information on previously verified blocks would require every participating node in the network to comply with and verify the changes.
For our purposes, nodes are active participants in the network. They are computer systems located worldwide that anyone with the means and know-how can operate. These nodes are what engage in the advanced cryptographic calculations used to create and store the data within each block and control its verification.
What does this mean for digital security?
Now we have to define digital security to see how these two tech fields are merging.
Essentially, digital security describes all the various defenses developed to protect a user’s personal data and files. Digital security, as a loose umbrella term, covers the protection of government data, communications data, transactional and financial data, medical data, and internet browsing data.
The giant breaches of digital security that often plague governments and financial institutions not only threaten national security but affect everyday peoples’ physical and financial wellbeing by risking their social security or banking information. One of the biggest criticisms of these massive institutional security systems is that they are too centralized. All the data is stored in one place or one small network of systems. Often the control of that system is in the hands of one centralized authority.
This means that not only is your data susceptible to hackers from the outside, but your data is also vulnerable to exploitation, monetization, and manipulation by the centralized administrators that control it.
Let’s examine firsthand the shortcomings of traditional, centralized digital security.
Centralized Social Media, Data-Breaches and the Unauthorized Monetization of User Data
Social media functions through the centralized collection and monetization of user’s data. Some of the biggest hacks in internet history have occurred on social media platforms like LinkedIn (2012, 2016) and Dubsmash (2018). These hacks exposed millions of passwords, social security numbers, home addresses, and contact information.
Also, the centralized control of users’ data storage has led to social media companies exploiting users’ data for profit. In 2014, Facebook sold the private data of 87 million Facebook users to the British consulting firm Cambridge Analytica without their knowledge or consent.
The inevitable move toward decentralized social media platforms will keep user data in the hands of the user. All data will be completely encrypted and stored in the blockchain, making the transaction of that data completely traceable and transparent. Due to blockchain’s unique data encryption method and its decentralized verification of the blocks, user data will also be more resilient to the ill-intentions of nefarious actors who hold too much power in the platform’s administration.
Beyond Social Media
The security advances blockchain offers can protect against data breaches and administrative exploitation in nearly every industry that has a digital presence. Think of the recent Wells Fargo scandal where Wells Fargo fraudulently created checking and savings accounts in their clients’ names without their knowledge or permission.
What about the data breach at Equifax in 2017? Hackers were able to exploit weaknesses in the security system and obtain the personal information of 147 million clients and the credit card information of 209,000 users. The scope of the attacks was determined to be the result of negligence from Equifax’s security team.
Both of these incidents may have been prevented entirely if each financial system was fully decentralized and operating on blockchain technology. Though the technology existed during all of the mentioned scandals and breaches, comprehensive implementation of the technology was less realized even a few years ago.
So, let’s revisit our opening question.
How Secure is Blockchain Technology?
Whether or not people are aware of it, blockchain tech is already here and changing how we protect our data, keep records, conduct transactions and communicate. As it applies to digital security, Blockchain is as revolutionary as penicillin was to the medical industry.
Not only can blockchain tech protect our data from external threats, but its decentralized nature also protects it from the exploitation and corruption of a centralized administrative authority.