Blockchain — A Unique Technological Solution to Privacy Woes
The Internet is perhaps the single greatest invention of our times. It has revolutionized the way we communicate, shop, make travel plans, pay for services, get the latest news updates, enjoy our favourite shows and much more. Unfortunately for the numerous benefits that internet technologies have provided us, it has also brought about a new-age worry — breach of privacy. Scan the headlines over the past few months and you are bound to find examples of major corporations owning up to data breaches whether they are social media companies, shopping websites or banks. In short, your personal data ranging from banking information to healthcare information is no longer safe. Even more worrying, many of us have even had our personal data mined to profile our behaviour. Cambridge Analytica is just the one we know about, there might easily be many more that we don’t know about yet.
The Root of the Privacy Problem
The key cause of our current problem with privacy issues is related to the fact that the basic architecture of public Internet is incompatible with our need for privacy. Any data we provide is transmitted from one system to another and stored on a centralized database. While this transfer of data is often in encrypted format, which is relatively secure through use of SSL encryption and related technologies, the centralized database and the system used to input the information in the first place become points of vulnerability that hackers can potentially exploit.
The Blockchain Solution
Blockchain’s decentralised architecture and encrypted record keeping can resolve your privacy worries by ensuring the following:
· Tamper-proof data records
· Mitigating counterparty transaction risks
· Creation and management of unique digital identities
· Transparency of data
These are achieved primarily through the use of distributed ledger technology (DLT) which is inherent to the basic structure of blockchain. While the current system of transferring data relies on copying your data from one database to another, the decentralized system encrypts your data at a decentralized node and only transfers temporary viewing rights as and when authorized by the owner of the information.
More importantly perhaps, blockchain uses a mix of public-private architecture which clearly defines and helps improve data privacy online. The high-end unbreakable encryption that forms the backbone of blockchain helps ensure counterfeit-proof information that enhances trust of all stakeholder. Furthermore, instead of having to provide our data multiple times to different providers, the unique architecture of blockchain can help ensure a single permanent record that can be periodically shared with providers for limited periods of time for verification purposes.
In fact, some blockchain solutions available today use a process of “computation proof” verification which uses complex mathematical algorithms to verify information without accessing the user data itself. At present these blockchain solutions are still in their infancy, but the potential benefits of these technologies extend to multiple areas including but not limited to healthcare, commodities trading, ERP and finance — all of which deal with potentially private user information.
The Way Forward
An unfortunate truth of our times is that while the underlying technology of bitcoin has multiple possible application areas, a single one related to virtual currencies seems to be hogging all the attention. It is only with increased interest and awareness that blockchain can actually reach its true potential in a multitude of areas ranging from document verification, supply chain to personal privacy. Recent moves by Singapore, Hong Kong, Estonia, Switzerland and the Philippines to introduce mainstream applications of blockchain in diverse areas ranging from supply chain to residency registrations are definitely steps in the right direction towards greater acceptance of blockchain solutions.