Data security is critical for almost all business types these days. The increasing connectedness of all markets has given rise to a combined need for convenient access to vast amounts of data, but also secure protection of that information. Blockchain is a term that has quickly become very popular within this context, and one that is sometimes used in ways that don’t work to its advantage. While it’s true that blockchain is disrupting the data security industry, what that actually means can be confusing. To really understand the impact and the benefits of blockchain, you first need to understand what it is doing within the realm of data security.
Bitcoin is built on blockchain technology for a reason. It’s a decentralized communication system that actively addresses many common cybersecurity problems. While the anonymity of bitcoin is still sometimes abused by hackers and cybercriminals, the blockchain technology can actively provide solutions if implemented strategically with data security in mind.
Three Specific Ways Blockchain Can Improve Data Security
One of the biggest vulnerabilities of cybersecurity technology is that it’s provided by a single point of contact, one that hackers can locate and target pretty effectively. Once the security systems are down, the data protected within is fully exposed. Since blockchain is offline and highly decentralized, it is a far more secure system. It works as a distributed database that is duplicated across a large network of computers. This network regularly updates the database, and isn’t stored in a single location that would otherwise be accessible and easy to overtake by a hacker.
Because of this decentralized structure, blockchain can’t be controlled by any one entity, nor does it have any one single point of failure. If part of the network is damaged in any way, there are many, many other parts to the system that can update and resolve an error as contracts, transactions and records are constantly updated and distributed.
Bypassing Hacker Technology
The key issue of data security often comes down to the trust that is breached when an unauthorized party accesses customer information. Famous security breaches of the last several years saw customer names, addresses, financial information, and other private data accessed and shared on the black market. The ease with which some hackers accessed this information shows a lack of investment in digital security on the vendor’s side. But it also revealed an intrinsic problem with data security systems as they are currently built. Your security is only as good as the hackers who fail to access your data. Hackers are constantly improving their technologies, and if your company isn’t able to keep up with that rapid pace of evolution, you are inevitably risking exposure.
Minimized Customer Exposure
But with blockchain technology and digital currencies built on blockchain such as bitcoin, customers don’t need to store their financial information with every vendor they trade with. Blockchain solutions do not require the exposure of personal information to make a transaction, thus reducing their risk by making a purchase online. Every transaction is done with a bearer instrument that does not give the receiver any information that might be used or stolen to exact future payments, or perform fraud. It’s a digital version of cash that does not link personal data to the holder, thereby protecting customers from identity theft, fraud, and overall reducing the costs held by businesses who are trying hard to protect their customers from these risks.
For more advice on how you can protect your customers in the modern age of data security, connect with the experts at Happy Faces Records Management today.