Blockchain and cyberspace
Cyber security has been a hot-button issue in 2016 and hacking dominated the information security news this year. With everything from the US Presidential Elections to Yahoo email accounts being targeted by hackers, it makes sense the world has become more sensitive about protecting its data. To that end, it’s worth considering Blockchain which Walmart recently decided to test in its systems. Let’s consider what Blockchain is and why it’s being considered for data management security.
So what exactly is Blockchain?
Consider the concept of a ledger. Transactions are recorded, allowing for transparency and an indication that no shady dealings are occurring. After all, proper recording in a ledger would mean everything balances out in the end. It also requires no oversight, since the ledger would balance itself out with proper transactions. This is what lies at the heart of Blockchain. It is a digital ledger, shared within a network, using encryption. The name itself comes from the inherently secure form of transactions that take place, as The Wall Street Journal explains:
“Once a block of data is recorded on the blockchain ledger, it’s extremely difficult to change or remove. When someone wants to add to it, participants in the network — all of whom have copies of the existing blockchain — run algorithms to evaluate and verify the proposed transaction.”
When the majority of nodes agree that the transaction looks valid, the new transaction gets approved and a new block is added to the chain. This has been central to Bitcoin transactions, which we’ve discussed previously.
While any form of encryption and security intervention is important, Blockchain is impressive thanks to it negating the requirement for oversight. This makes transactions faster. As one expert in innovation told TechWorld: “[With Blockchain] it could mean payments that are much faster: today international payments can take days, this could take minutes or even seconds.”
Related: Beginner’s guide to Bitcoin and what it means for ecommerce
Not so fast
Of course, nothing is perfect. Critics have highlighted that with Blockchain, its international distribution means there’s no standard set of rules to follow. After all, there will be different blockchains for different types of transactions, between different networks. As Thomas MacCaulay put it: “The fragmented landscape of competing blockchains has failed to produce international standards for the technology.”
Another problem is transparency, which works in situations like Bitcoin – where anonymity prevails – but won’t work when it involves your bank statements. No one wants to show their bank statement to the world. Further, as the “right to be forgotten” becomes central to digital law, the permanency of the blockchain makes that difficult.
If everything is encrypted, there is a chance that everything could be lost if the “key” is, too. Additionally, as we’ve seen this year, nothing is impenetrable if it’s online. Smart hackers always find away.
Technology will affect everything about the world, from marketing trends to how new machines are built. Clickatell Touch, for example, changes how businesses interact with customers. With Blockchain, there’s a chance to change how people engage in transactions. But as is the case with all forms of technological progress, it must be looked at carefully before you take it further.