Blockchain technology is revolutionary for data management. While often associated with Bitcoin and other cryptocurrencies, blockchains offer many more benefits to other aspects of business.
Choosing the right blockchain allows you to integrate the technology into your existing business. Doing this can help you optimize your data management, saving money and boosting your business’ growth.
In this article, we’ll discuss why blockchain is secure, and how you can use it within your business.
What is Blockchain Technology?
Blockchain technology is essentially a type of database. These are electronic stores of data, often in server centers, designed to be accessed with ease by anyone that needs that data. However, unlike regular databases, blockchains hold sets of information in discrete blocks.
These blocks are chained together, hence “blockchain.” These blocks all have their own timestamp associated with them, making tracking the data very easy. The most famous example of this technology is Bitcoin.
For Bitcoin, and indeed all other cryptocurrencies that use blockchain technology, the blocks are made up of different transactions. These blocks are maintained using servers all over the world, and by distinct users. This makes Bitcoin decentralized, versus if one entity owned all of the servers.
Why is Blockchain so Secure?
What makes this extremely useful from a security standpoint is the way that the servers interact with each other. Each server in this decentralized network is called a node. Each node contains a full record of all of the data in the blockchain from the day it started.
This means that if there’s a mistake on one of the nodes – or if someone tries to tamper with the data stored in that node’s blockchain – the thousands of other nodes in the system would correct it. This means no single node can alter the history of that specific blockchain.
This makes transparency one of the vital components of blockchain technology. But there are more levels of security associated with blockchain that make it attractive for businesses with sensitive data.
Using Security Keys
One important aspect is the use of security keys in the encryption process of blockchains. All transactions in the blockchain, be it financial in the case of cryptocurrency or simply the exchange of other forms of data, have security keys attached to them.
If someone tries to change any of the recorded data, the entire network will know immediately. The larger any blockchain network is, the more the nodes that need to be tampered at the same time to have the majority of them change their records and stay that way.
While this might sound like a foolproof method of storing and transferring data, it’s vital you know what kind of blockchain is right for you.
How to Fully Harness the Intrinsic Features of the Blockchain
There are two main categories of blockchain: public and private. Public blockchains use computers connected to public internet to act as nodes. Private blockchains only allow specific organizations to join the network. Both have their own advantages and disadvantages.
If your business is handling sensitive data that you don’t want your competitors to get their hands on, it’s clear that having public computers acting as your nodes is not a good idea. In this case, a private blockchain is the obvious choice.
However, if your need for a blockchain leverages the anonymity enjoyed by a decentralized network, a public blockchain network is your best bet. This is how Bitcoin operates, and it also makes use of the next key difference between public and private networks.
Verifying Transactions
Transaction verification, in this case financial, involves all of the nodes to agree that the transaction is the only version of the truth. This agreement for Bitcoin involves mining, which means solving complex cryptographic problems.
However, on a private network, the process of agreeing on the transactions simply involves the known users verifying them. There is no need for mining, which is energy-intensive, but it can present the issues of insiders trying to tamper with the records.
For this reason, you need to ensure you have secure infrastructure behind your blockchain network. If you have extremely sensitive information on your hands, you should ensure that nobody within the network that doesn’t need to know about it can access it.
Examples of Blockchain in Industry
Blockchain technology isn’t just for cryptocurrency and sensitive data. Food distributors can use it to track their food’s journey from start to finish, so that if there is a safety breach or contamination, they can pinpoint exactly where the problem started.
The banking sector can benefit from blockchain’s constant uptime. Instead of payments taking days to transfer, the blockchain can process payments in just 10 minutes. So, aside from a massive amount of security, blockchains can speed things up as well. However, they are limited in how many transactions they can perform per second.
Healthcare systems can keep patients’ data safe from breaches, with each patient’s records having their own security key. This key could only be used by the patient’s doctor for example.
But blockchain technology can optimize and streamline almost any kind of data transfer and management. From optimizing property records to eliminating voter fraud, the blockchain can and will revolutionize the world of data management.
Why Blockchain is Important for the Future
Blockchain lets users who don’t particularly trust one another share sensitive data across highly secure networks. As more of the world continues to move online, having a secure digital presence is key.
While hackers out there will never stop hunting for ways to cheat the blockchain system, and the question of who gives the security keys out in the first place may be a tough one to answer, businesses handling sensitive data can clearly benefit from the technology.
As more businesses use blockchain in their own digital transformation, it will only become more secure. In the future, people will not simply associate blockchain with Bitcoin and other cryptocurrencies. It may eventually end up a part of all of our lives in several important ways, even if we don’t realize it.
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