How Blockchain will ensure the privacy & safety of consumers?
Blockchain development has become a hot topic among startups, the media, and even government corridors, and the financial business is no stranger to it. Not surprisingly, blockchain is a platform that enables the incredibly secure recording of information, making it nearly hard to alter or hack into the system. Blockchain is a digital ledger of data called blocks that are used to track assets and record transactions in a business network. It is recognized to democratize processes while also providing security, transparency, and efficiency, with decentralized ownership being one of the most appealing features of this technology.
Blockchain is a distributed ledger management tool that can be used to track the custody of couriers, for example, or transactions between two persons. Transactions are virtually instantaneously recorded.
Furthermore, each transaction has a solid record, removing the possibility of modifying previous transactions. In other words, blockchain technology can make every transaction completely secure.
The ideal way to think of blockchain according to Blockchain experts is as a decentralized ledger that can save costs by eliminating intermediaries like banks and effectively decentralizing trust. Instead of a central authority, the system appends entries to the ledger that are validated by the larger user community.
The chain connects each block, which represents a transactional record. The blockchain is created when a distributed computer network certifies the record and successively lists the blocks of transactions.
Importantly, the blockchain contains nothing of value, just like printed money or a bank’s database, and the contentious cryptocurrency bitcoin is essentially a blockchain application.
Is the block, then, truly immutable? No, that is not the case.
There is no such thing as perfect immutability; blockchain, like any other network, is theoretically susceptible to change. However, because a blockchain network’s computers, or nodes, are spread, the mathematical complexity and computational power necessary to make modifications make them practically difficult. To change a chain, one would need to gain control of more than 51% of the machines in the same distributed ledger and change all of the transactional records in a short period of time — in the case of Bitcoin, within 10 minutes. This has never happened before.
What about privacy and security?
Although it is difficult to achieve both security and privacy in a traditional information system, blockchain can do so by enabling secrecy through “public key architecture,” which protects against hostile efforts to alter data, and by keeping the size of a ledger constant. The more spread and larger the network, the more secure it is thought to be.
Other stated blockchain concerns include restricted scalability, inadequate data protection, and a lack of industry-wide standards.
To avoid data privacy concerns, a blockchain operator can keep personal data and the references to it off-chain using a “hash” of the data — a one-way transformation of data into an unreadable piece of data.
Personal data must be held by individuals or stored in a more traditional database when data is stored off-chain. Traditional technology, such as a standalone database and application systems, can be used to store know-your-customer documents off-chain, such as a scanned driver’s license or passport.
In a nutshell, blockchain technology has the potential to be reliable, safe, trustworthy, and private. Solid architecture, secure design principles, and effective workflow policies, in the end, provide security.
So, do the blockchain’s potential benefits outweigh the risks? In a nutshell, sure, as long as it’s done correctly.
There are flaws in every system. Supervisory and regulatory frameworks in today’s technology-driven financial sector must permit innovation while also assuring stability, consumer protection, and competitiveness. Blockchain certification India has been on the rise.
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