Let’s be honest… blockchain is a confusing concept. Even for people who understand exactly how blockchain technology works, providing an easy to understand explanation is challenging.
There are a couple of reasons for this. First, blockchain is relatively new tech, and new tech always takes a little while to sink into the public consciousness. We didn’t really know what the internet was for, or how transformative of a force it could be, back in the 90s. Mostly, because we didn’t understand how it could be applied.
Secondly, the technology itself – blockchain – is closely associated with its application – a cryptocurrency called Bitcoin. But they are not the same thing. The sometimes-negative association with Bitcoin specifically, or cryptocurrencies generally, tends to muddy the waters for many.
Before we confuse you further and tell you more about what blockchain isn’t, let’s outline what it actually is. There are three important elements of blockchain technology:
- large, peer-to-peer network of computers dedicated to processing and recording digital activity
- decentralized database of all recorded activity called a Distributed Ledger (there are several key aspects to this, including “decentralized” and “all recorded activity”)
It’s definitely more complicated than that. There’s a lot that’s packed into the application of these three concepts. But, boiled down, blockchain combines these elements to provide a secure platform that allows any two parties to engage on the web without the need for a third-party authenticator. Blockchain cuts out the need for a middleman in any digital interaction (including financial transactions) by providing a peer-to-peer network that’s safe, trusted and transparent.
The first intended application of blockchain technology – Bitcoin – was financial in nature. The creator/creators set out to develop an entirely new currency – one that is not reliant on or backed by any government. But, it’s the system that was developed to enable a digitally-based currency that may be end up being much more transformative.
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value,” say Don and Alex Tapscott, authors of the 2016 book Blockchain Revolution.
If it sounds like there could be thousands of applications for blockchain technology, you (and a few dozen million people) are probably on to something.
Blockchain Application in IT & Data Security
So, can blockchain disrupt the IT and data security industries? It sure seems to have the potential to do so. In fact, it may already be doing so.
The following attributes and capabilities make the blockchain particularly appealing to data security professionals:
- Decentralized and unhackable
- Encryption and validation
- Public or private
The data that’s stored on a blockchain doesn’t reside on any one computer (or, node) – it is distributed across all the nodes on a blockchain network. Once a record is added to a blockchain database, it is encrypted and cannot be accessed or altered unless the user provides the correct access key. This makes a blockchain pretty much impervious to hacking.
Because there’s no centralized location for the data, hackers would need to gain access to more than 50% of the network nodes in order to access or overwrite a saved record. Depending on the size of the network, that proposition falls somewhere between extremely unlikely to darn-near impossible.
Further, while blockchain was initially created to enable anonymity in a very public setting, a private blockchain network that restricts access to just a few users can easily be created.
All of this means that blockchain technology is highly amenable to the data security needs of businesses, large and small.
Beacon Knows Data Security
Not sure if you’re doing enough to protect your sensitive business data? BITS can help. A free audit of your network by our security experts can help put your mind at ease. Request one today.