Is the BlockChain technology good for security?
Blockchain technology is now becoming touted as the solution to all ineffective information processing systems.
What is BlockChain and What does it mean to Cyber Security?
Cyber Security has been a highly charged issue in 2016 and hacking dominated the information security news this year. With everything from the United States Presidential Elections and Yahoo email accounts being hacked by hackers; it makes sense the world has become more sensitive in terms of protecting its data. To that end, Walmart recently decided to test BlockChain Technology in its systems.
So, What BlockChain Exactly is?
Let’s consider the concept of ledger. Transactions are recorded, allowing for transparency and the indication that no shady dealings are occurring. After all, proper recording of transactions in a ledger would mean everything balances out in the end. It also doesn’t need any oversight, since the ledger would balance out itself with appropriate transactions. This is what lies in the heart of BlockChain Technology.
BlockChain is a digital ledger, shared within the network, using encryption. Once a block of data is recorded in the BlockChain ledger, it is extremely difficult to manipulate and remove. BlockChain offers a technique to verify each transaction without any authentication from a central authority.
For example, a landlord might put an IOT door lock on your rental apartment. The door lock might check BlockChain to see if your rent is paid. If it isn’t paid, the door lock will not let you enter into the apartment.
How BlockChain Technology Keeps Data Secure?
Since first appearing in 2009, bitcoin has flashed many assumptions about the future of finance. But while interest in the currency itself has fluctuated widely as its value continues to soar and crash, the database technology underlying Bitcoin has steadily been reaping interest from the world’s leading banks and investment firms.
BlockChain records and indexes each movement of Bitcoin, creating a searchable database for every transaction in the process. However unlike traditional digital ledgers that record information on a central server, the BlockChain stores transaction records across vast networks of computers that constantly check and validate information with each other.
Distributed ledger systems that scatter information in this way overcome a key challenge for financial firms- how data can be critically stored? Stringent regulations exist to ensure companies that handle financial data are doing so in accordance with the highest cyber security standards.
Harder to Hack
As information through a network of computers, the task of conceding data becomes much harder for hackers. Instead of having to breach just one server, falsifying a balance or making a fraudulent transaction on blockchain can only be achieved, if the majority of the network is compromised. Hacking a single server can be extremely difficult, even for the most proficient cybercriminals. Being able to compromise enough servers to falsify records on the blockchain is possibly impossible, especially as hackers would need to break each node simultaneously.
Benefits of Blockchain in the Banking Sector
The high level of security used by the distributed ledger system makes it attractive to financial institutions, but Bitcoin itself offers few benefits to banking systems. However, the same technology that reinforces the blockchain can be used to establish secure networks for any type of financial organization, not just Bitcoin.
Conclusion
The financial sector is dominated by a mish-mash of legacy computer systems that are inefficient and hard to maintain. The blockchain has opened the floodgates to disrupt existing financial services and involve new financial solutions for customers. Research into this technology may still be in its infancy. But it’s already robust that those who master it first will emerge as a leading technology in the evolving global financial service sector.
The distributed ledger is very elegant way to solve financial problems– Julio Faura
