Blockchain, with its decentralization and smart contract technologies, is fundamentally reshaping the way organizations do business. But its perks don’t stop at automation and enhanced business- once adopted, it significantly improves cybersecurity and grants users better control over how their personal data is shared.
How Does Blockchain Make the Internet More Secure?
The key element making blockchain so secure is its decentralized nature. Centralized networks generally have a few IP addresses at max, which makes it easier for hackers to penetrate the servers and cause real damage through phishing and destructive attacks. For reference, an average ransomware attack cost $4.54M last year, most of which resulted from phishing.
Meanwhile, a decentralized network (aka blockchain) has a complicated structure that’s harder for hackers to enter. Blockchain solutions require proof of work validation, so it becomes super costly and time consuming to try and hack ledger transaction methods. IDNs would also scatter resources across multiple nodes, so hacking the database is nearly impossible.
The Concept of Decentralized Identity
In addition to making your networks more secure, blockchain also improves consumer trust by shielding their personal data through a decentralized online identity. A decentralized identity (DID) allows users to create and manage their digital identity without requiring a specific service provider. This information is stored in identity wallets, which are kept in a single secure location. Users can then let third parties access this data, or block them at will.
As a result, users get the most control over their own saved information that they can choose to share through secure channels.
Here’s how decentralized identity works:
- Users create an identity wallet with details like name, age, financial data, social security, addresses, etc. This is basic knowledge that confirms you’re eligible for authentication.
- The DID has associated public and private keys that are published on a dispersed ledger like a blockchain. The public key is delivered to the blockchain in exchange for an identifier that represents the user.
- This identifier is shared with third-party service providers. Once they find the identifier in the blockchain, the blockchain sends them the corresponding stored data. The final authentication is done by adding a signature with the private key.
- After the authentication is verified, users are allowed to control what they share.
Additional Ways Blockchain Improves Security
While decentralized networks and identity are the major players, there are countless other ways blockchain makes the environment safer:
- Blockchain can record and store hashes from software, so whenever a new update arrives, the file integrity can be compared to the old hashes and verified. This prevents malware infections.
- Blockchain also encrypts data in transmission, so it can’t be accessed by unauthorized parties.
- There are blockchain-based online storage solutions, which help safely store massive amounts of data that legacy systems and traditional data centers fail to support.
- DNS is a directory used by browsers to link IP addresses and domain names. Hackers typically rely on DNS vulnerabilities to exploit links and cause sites to crash. Blockchain can store DNS with immutable security.
In these ways, blockchain is a revolutionizing force that can massively improve cybersecurity- but implementing this new system also comes with radical changes to the organization of your business. Companies that are prepared to adopt them can benefit from improved data safety and customer trust.