Blockchain technology has demonstrated its applicability in promoting security across industries and sectors. Blockchain forms an ecosystem for transparent and efficient interactions with minimal cost. Among other things, blockchain offers solutions for privacy and cybersecurity.
The main benefits of blockchain are transparency of transactions and openness. It’s useful in contracting and transacting. Everyone involved in the process knows what steps their partners are taking. An indelible history of transactions in blockchain allows lawyers to organize registries, vendors to calculate and track the flow of goods, and law enforcement to catch cybercriminals.
But total transparency is not always necessary. Privacy is an inalienable human right. In many countries, this right is written into law. For example, the
General Data Protection Regulation (GDPR) in Europe states that every person at any time has the right to withdraw their consent and permanently delete any personal data they have previously shared. Given the rising flood of cybersecurity scandals and leaks of personal information, more and more people are concerned about how their data is being used and stored. Some people and companies are giving up their social media accounts and using additional privacy services because they don’t trust the companies that process their data.
Blockchain can be a data privacy solution. Confidentiality is an essential element of blockchain, thanks to its roots in cryptography. In a blockchain, transactions are cryptographically verified by other nodes in the network and then added to the blockchain.
Blockchain technology can be a solution to the privacy challenges posed by traditional data storage systems by, for example, distributing access to data based on
smart contracts or storing data securely in private blockchains.
However, some aspects of the technology contradict the rules, such as the right to delete. Blockchain is immutable, decentralized, and persistent, which means that it’s almost impossible to delete data such as the personal information of data subjects.
One solution to this is one-way encryption. In this case, personal data is not stored in the blockchain in plain text, but in the form of a data hash, or digital signature. With access to the blockchain, you cannot see the data itself or decrypt it, but with the same data outside the blockchain, you can recognize it in the blockchain through a hash match.
Essentially, due to the physical properties of data storage devices,
the real deletion of data on servers only happens when there is a full memory overwrite. Deleting data normally means deleting the path to the stored data. This is also true: when the original data becomes inaccessible, the blockchain leaves only a hash that cannot be turned back into data.
Some blockchain projects are aiming to improve this technology. For example,
Guardtime is the developer of Keyless Signature Infrastructure (KSI) technology that validates
digital signatures without disclosing keys.
Blockchain also has the potential to ensure
fraud, and manipulation are impossible because of blockchain’s immutability and decentralization. To make any change, the entire network must be shut down because each node in the network stores a copy of the blockchain.
When data is stored in a centralized system, it’s much easier for criminals to access large amounts of information because it’ is available in one place. With a decentralized structure, there is no single point of entry to the entire data repository, which greatly reduces the impact of breaches.
Blockchain also offers the ability to defend against increasingly common distributed denial-of-service attacks. In a DDoS attack, hackers break into a website offline and send a flood of traffic to the site to the point where the site collapses. However, this vulnerability can be reduced by decentralizing DNS. Distributing this infrastructure across a network of nodes means that potential hackers, again, will have to target all the nodes to take it offline.
Blockchain has many inherent
advantages that make it ideal when it comes to privacy. It’ is decentralized and changes the way data is processed and stored.
However, blockchain is not a one-size-fits-all solution for data security and privacy. It’s a powerful tool for protecting data, but users must use it in conjunction with a variety of other cybersecurity measures and methods to ensure privacy.
