Data is the cornerstone of any modern business. But how can you trust that your data hasn't been tampered with? This is where the benefits of blockchain come in to help increase trust, security, transparency and among others. The global blockchain security market is forecasted to grow at a CAGR of 85.9% from 2022 to 2030. According to the report, factors include the use of contactless blockchain digital ticketing at events along with the growing use of cryptocurrency worldwide. The demand for cryptocurrency is increasing due to benefits, such as the ease of transactions, inflation hedge, and enhanced security.
The Department of Homeland Security (DHS) has provided funding for startups to conduct research and development to explore new approaches to cybersecurity using blockchain technology. “Examples include ensuring the authenticity and integrity of videos and photos from cameras, sensors, and Internet of Things devices; enhancing and facilitating international trade and customs processes; facilitating and securing passenger processing; and mitigating forgery and counterfeiting of official licenses and certificates.”
The benefits of blockchain are already persuading organizations to take a fresh look at how they mitigate cyber risk and combine blockchain and IoT, or the Internet of Things, for added value.
What is blockchain?
In essence, a blockchain is a digital ledger of transactions distributed across multiple "nodes," or computers, each of which has its own continuously updated copy.
These networks can be public, allowing anyone to join and remain anonymous, as per Bitcoin. Or they can be private networks where access is confined to known entities and businesses and identity is strictly authenticated.
The "blocks" themselves are made up of a single transaction or small bundles of transactions, each of which stores a reference to the previous transaction/block via an SHA-256 encrypted hash. These are linked together in an immutable chronological chain of blocks, representing a "single source of the truth."
What are the security benefits of blockchain?
It's not hard to see the security benefits of blockchain technology thus described. There are several key elements:
- Blockchains are decentralized, so there's no single source of data to hack, and there's no need to bring in third-party suppliers—who may also be hacked—to process transactions.
- Blockchains are encrypted to provide an extra layer of security and ensure data doesn't fall into the wrong hands.
- Any changes are made in real time across all nodes, which adds transparency and trust in the ledger and ensures there's no single point of failure.
- Blockchains are virtually tamper-proof because changing a record would invalidate its file signature and raise a massive red flag. Also, as every transaction is checked by multiple nodes, you'd need to compromise all of these at the same time to perform a successful hack—likely a huge and costly undertaking.
How can the security benefits of blockchain help across industries?
The security benefits of blockchain can be seen across industries, including manufacturing, healthcare and finance.
- The benefits of blockchain in manufacturing: With extensive and complex supply chains, manufacturers need to ensure that data on specs sent from upstream partners can be trusted. This is where the tamper-resistant nature of the blockchain comes into its own. The time-stamping of blocks adds an extra element of granularity to further enhance assurance.
- The benefits of blockchain in healthcare: Blockchain can help securely encrypt electronic patient records, protect them from being hacked and preserve the anonymity of individual patients who may be part of the network. That ensures data can be shared seamlessly between patients, healthcare providers, and clinicians with minimal privacy or security concerns.
- The benefits of blockchain in finance: Blockchain can securely encrypt financial transactions whilst making it easier to trace and monitor payments to mitigate fraud. The same principles can be applied to the storage and sharing of sensitive business and personal documents.
How blockchain and IoT work together
The whole point of the IoT is to make data-driven decision-making a reality. But this all falls down if you can't trust the underlying data. Here, again, those tried-and-tested benefits of blockchain come to the fore. Its transparency, immutability and tamper-resistance make it an ideal candidate to provide assurance for IoT data.
Its decentralized nature is also a near perfect fit for the widely distributed IoT endpoints that could be registered as nodes in a blockchain. In a world where IoT devices are often singled out as a potential source of failure or compromise, blockchain and IoT combined can provide the trust organizations need to accelerate digital transformation.
Learn about Verizon Identity and how you can secure your business.
The author of this content is a paid contributor for Verizon.