Keeping Data Private & Reliable using Blockchain
With a spate of data breaches in recent times data privacy has been a hot topic. The recent event involving Cambridge Analytica and Facebook exposed the data of about 3 million users. Such data breaches are then used to lend credibility to fake information, news or data by using seemingly real identity attributes. As a result, there is a global push both through regulation and operations to enhance controls on data privacy, security and most importantly, verifiability.
The Web of Data Storage
Storing and sharing data on the internet is a complex task. The structure of the internet, users’ keenness to share data and their desire to retain privacy are almost incompatible. Furthermore, it isn’t a secret that corporations and governments store our personal information, putting it at the risk of hacks and breaches.
When at corporate giants like Anthem and Target Corp data is breached, it not only leads to the compromise of years of records but also seriously tarnishes their reputation. Corporations often find themselves tackling privacy issues despite spending huge sums of money on security. The fear of payment details and passwords being out in the open is bound to scare customers, and any data breach as will result in customer attrition. The point here is, when there is a concentration of personal or business-critical data, there is a higher risk of various data breaches — intentional or unintentional with various levels of mala fide intent.
Blockchain: A Secure Solution?
At core, the world today is presented with two core problems — Data Security and Data Reliability. This is all the more pertinent today as people and businesses are taking cognizance of the value of their private information, given that data is fast turning into a new age currency. Sample this, the internet generates 2.5 quintillion bytes of data every day. Of all the data in the world, 90% was created in the last two years alone!
So how do we solve this problem? Is data only as secure as the repository that holds it? Despite everyone and everything is connected, can we not solve the data exchange and reliability question?
Blockchain technology has emerged as one innovation that potentially puts the power of data security and reliability back into the hands of the owners. Touted as one of the most significant technological breakthroughs in recent times, Blockchain scores over other modes of data management due to the fact that tampering with it is impossible since information is distributed and encrypted. In case you want a refresher, we have already published blogs introducing Blockchain that you can read here.
As opposed to how the internet transfers information — by making copies — blockchain allows for a controlled transfer of ownership of the original information for limited time and/or purpose. It creates counterfeit-proof information on a trustworthy network. In this system, public information such as financial statements of listed companies and government records can remain public while citizens and corporations can have their private data remain private and secure. It is this approach that turns our current digital economy on its head. Blockchain potentially gives owners complete control of their data.
How Blockchain Secures Data & Makes it Reliable
Blockchain’s biggest advantage is the security it confers in record-keeping. It is not a database or data-store in the traditional sense, so data must still be stored securely in silos or the cloud. That said, data security is more than just storage. Generally, data stored in banks or in educational institutions can be kept rather secure. In reality, security is compromised when data leaves its secure silos and is not handled properly. Multiple copies are made. Purpose, why copies are made, is unclear. There is no limit on utilization and/or circulation of data. Furthermore, data, when transacted, is modifiable in ways that authenticity cannot be verified by the recipient.
Given below is the ‘Data Quality Matrix’ that we have created to illustrate the 2 dimensions of data quality & reliability.
For more and more data to be in the right top quadrant, Blockchain can be an effective tool in the following ways:
Firstly, an ecosystem solution like ChainTrail creates a single network where every individual and institution have an immutable identity. Any data they create or endorse (using tools like eSignatures) can be traced back to them and provenance can be instantly established
Secondly, the data that is created in interactions and transactions is “digitally fingerprinted” and distributed on the ecosystem Blockchain (say ChianTrail) keeping the identity of involved parties and underlying nature of data completely private. That way data can be verified by any recipient and full compliance with privacy laws is guaranteed. The underlying transaction confirmation and distribution mechanism of Blockchain makes this process water-tight.
Thirdly, and most importantly, the residency of data is not a compulsion in such a solution. The Blockchain is meant for recording transaction and data fingerprint. Solutions like ChainTrail or data silos (Banking Systems, Healthcare Systems, Education Repositories and the like) can continue to hold the data safely while taking advantage of the making it immutable and verifiable using the Blockchain.
Lastly, the transaction mechanism of the Blockchain and the concept of Smart Contracts can ensure control and enforcement of rules for distribution of data to intended parties, access only for intended purpose & time and automatic validation of rules’ execution when pre-defined conditions are met. For example, a Degree Certificate can automatically be issued to a Student with the Vice-Chancellor’s verifiable signature if all fulfilling conditions are met.
In Summary
With a distributed ledger-based system Blockchain technology makes it difficult to alter logged data and ensures that data is secure since a tampering event is bound to be noticed. Blockchain can and is being used in distributing data by breaking data into chunks, encrypting it, and spreading across a network such that all data are available even if part of the network is down. This means that instead of handing over information to a technology company, it is distributed across a network that in total acts as custodian. Shared by the community, a cloud-based ecosystem is a safe space where sensitive data can’t be read or tampered with, keeping the owner in control. The mechanism that is used; is to save a cryptographic signature of a document on a Blockchain, ensuring it is untampered without needing to save it. Thus, it can be guaranteed that a file is original and untampered.
When complex supply chains are involved in the trading of products, companies may often find it difficult to trace the origin of an item. In Blockchain, the records are maintained in such a way that the exchange of goods creates an audit trail, which charts the inception of every asset, including all the stops made in between. This history of data transaction aids in the verification of an asset’s authenticity and also helps prevent fraud.
To Conclude
The promise of Blockchain is based on its ability to facilitate transparency of data, to ensure that it remains tamper-proof, to mitigate counterparty risk in transactions, and to manage digital identities. Third-party providers are currently dominating the market for secure data storage, but with the growing popularity of the Blockchain technology, it looks like that scenario is changing for good. With billions of dollars being invested in this technology, it might just be the bright future of data reliability we’re all looking forward to. In a digital era, the distributed ledger technology can give back individuals and institutions their sovereignty.
