The role of blockchain tech in data hacks prevention
The increasing threat of data hacks, a variety of methods and ingenuity of hackers have encouraged the development of updates in mechanisms for data protection. While no man-made thing or tech is 100% unhackable and tamper-proof, the blockchain tech has proven to be the one that has gotten closest to that rank.
Here are the reasons why:
- Blockchain is decentralized
- Blockchain provides data encryption and validation
- Blockchain permanently keeps transaction records
- Blockchain offers time stamping
To better understand these features in the context of data protection, let’s dive in one by one.
1. Decentralization
In its essence, a blockchain is a decentralized network of nodes or a peer-to-peer network in which any node (computer) with access to the network can confirm the validity of a transaction. This means that there is no single central point of authority or failure, which makes it basically unhackable from a single computer.
The lack of a single central authority increases the fairness of the system, as it distributes the authority across the network and amongst the participating nodes. This network of nodes validates records of data and their transactions through innovative and incorruptible consensus protocols.
Even if one, two or several nodes experience malfunctions, this doesn’t affect the high-level security and performance of blockchain-based transactions since all the other computers continue running without interruption. Obviously, hacking such a system is unimaginably hard as the hackers would not only have to attack the majority of the nodes in the network but also do so simultaneously if they were to compromise a sufficient number of nodes and falsify records on the blockchain.
Without the consensus of all the nodes, the block of data or transaction gets instantly rejected before it could be linked as a new block onto the chain.
In centralized data management systems, it’s the controller who determines the processing of data. In blockchain networks, on the other hand, it’s difficult to define data ownership, since all the participating nodes have the same role and level of authority so as to diminish the possibility of hacks in a single point of access.
2. Encryption of data and data immutability
A blockchain serves as an append-only and immutable ledger of accurate and verified information. The data stored on the blockchain is sealed as final and immutable, once it gets confirmed as a new block added onto the chain of blocks. Data blocks can only be added but not edited or modified.
Through mechanisms of cryptography, as well as private and public keys that act as digital signatures protecting the data, the blockchain tech secures, verifies, and authenticates the data and their transactional history. This makes blockchain records a straightforward and reliable source for independent verification of who owns what and at what time.
Serving as an additional layer of data protection, the SignTag digital signature API integrates the powerful ERC-721 standard for unique or non-fungible tokens (NFTs) with the strengths of the blockchain. Both combined, they provide a solid and verifiable:
- proof of existence of a data file
- proof of its ownership, authorship, and editorship
- proof of its integrity and non-modified history
- proof of its authenticity and origin
The verifiability of the data is especially useful and valuable in cases where ownership, authenticity, and integrity of data are of paramount importance, such as in finance, public records, intellectual property, law, etc.
The data and its digital signatures recorded on the blockchain are immutable and algorithmically protected from editing or tampering, which makes them extremely hard to modify or hack. Combined with the ERC-721 standard for non-fungible tokens, the data sealed through the SignTag API becomes tokenized as unique, which makes its validity and transactional history verifiable and confirmable at any time and independently from any central data management.
3. Records of transactions
Not only does the chain of blocks record the data stored on the blockchain, but it also contains records of data transactions.
Together with the data and the digital signature of the encrypted file, each block contains meta information about the time of each transaction, its details, and previous blocks or transactions. Once a transaction is cryptographically verified and recorded on the blockchain, it gets added to the previous block in chronological order, without the chance of having its transactional metadata manipulated.
This adds to the powerful tracking mechanism of the blockchain that enables easy yet reliable verification of the complete history of a recorded block — where it came from, at what time, and what preceded it. Since such metadata is inscribed automatically, hackers cannot replicate or duplicate a certain transaction record.
Especially in the fields like trading assets, management of digital rights, personal data, supply chain, etc., a transactional record significantly facilitates the digital tracking of important data paths and sources.
4. Time stamping
Since data blocks can only be added to the blockchain in a linear chronological fashion, each block gets time-stamped in order to record its confirmation time and addition to the chain.
Through time-stamping, blockchain is being continuously updated and all the recorded data becomes synchronized across the network of nodes.
Time-stamping provides an additional layer to the safety and unhackability of the blockchain-stored data. As it occurs automatically, it doesn’t rely on manual input and therefore reduces the chance of hacking.
The time record is not only valid for sequencing blocks but more importantly to verify and prove the exact day and hour of when certain data was encrypted within a blockchain-kept document. Digital contracts and other sensitive data records in fields like medicine, research, law, supply chain, etc., can thus leverage even higher transparency for legal, business, and compliance purposes.
The card to bet on
Despite having confidence in the blockchain technology to deliver on its promises, businesses and organizations that are getting ready to jump onto the fast-moving blockchain tech train, also need to take into consideration some challenges that come with it.
The size of the network and poor data distribution could loosen the unhackability of the blockchain, and network bandwidth and potentially large communication overhead should be taken into account.
Still, considering the potential that it brings and the cost reduction that comes with operation optimization, the blockchain tech — combined with the digital signature tech — is still the best you could provide for the security of your valuable data, files, and organization.
And you can ascend to the level of blockchain-based data management today with the SignTag API.
