It is often easy to lose sight of the potential weaknesses and strengths of new technology, especially when the hype reaches its peak. According to research by Transparency market, it has been predicted that the global blockchain technology will reach $20 billion by 2024. Financial institutions can adopt this technology to reduce costs. Besides this, there are several other advantages that can be derived from using the blockchain, including data security.
Even though it is not a panacea, blockchain technology has proven transformative. However, it is important to understand how it works first before thinking of applying the technology to your business. There are several ways Blockchain offers data security. Unlike other traditional approaches, blockchain technology encourages many companies to reformulate all security concerns. There is an actual sense of encouraging trust factors in data.
Rather than uploading data to a single location, blockchain ensures that every piece of information is broken into smaller chunks and shares them among all users in the entire network. In the process, no single person holds decision-making authority. This digital ledger has no central control point. Every node holds an entire copy of the ledger. This ensures that there is no data loss even if one or two nodes go down. What this does is that it eliminates the need for a middle man while engaging in a transaction. Users do not need to place their trust in any service provider when there is an immutable, dependable decentralized public ledger.
In addition, everything on the blockchain network is encrypted. This makes it difficult to alter any set of data on the network. Due to this decentralized nature, it is possible to check file signatures across the ledgers on each node and verify that nothing has been tampered with. Anytime there is an alteration in a record, then the signature will be invalidated. What this does is that it enables users to adopt the blockchain ledger to verify the fact that has been backed up has been unchanged after a long time. Blockchain has undeniably offered dependable data verification since it was first launched.
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Furthermore, it is impossible to hack into the blockchain network. Even though it is entirely possible to hack traditional networks and access the data in a single repository, this is impossible in the blockchain network. Since data is decentralized and encrypted, it is impossible to corrupt or alter anything on the network without invalidating the signature. The proof of work is a mechanism that promotes trust among users. There is a need for every legitimate transaction to be verified by various nodes in the network. For this reason, hacking the blockchain implies that hackers must successfully break into most of the nodes at once. While this is technically possible, the computing power and time to achieve this is beyond the ability of any cybercriminals.
The public blockchain might have gathered all the plaudits, in recent times, for encouraging anonymity, yet it is possible to create a private blockchain network that limits access to particular users. This will still involve a decentralized peer-to-peer network. However, for anyone to access private blockchains, there is a need to verify their identity to be granted access privileges, which can be limited to certain transactions.
There are a plethora of transactions that are taking place daily and there is a need for security measures that will protect people from the illicit intentions of cybercriminals. This is what blockchain offers. This is an immutable ledger that ensures that it is impossible for any hacker to attack the data in the network without attacking all the nodes simultaneously. This high level of security has made blockchain technology gather recognition in various industries.