Blockchain technology is nowadays snatching the attention of every digital and print media. With the increasing popularity of cryptocurrencies, the technology behind them is also attracting the tech-savvy world. Though blockchain was initially invented to develop bitcoin, its immense usability in other aspects is now attracting several industries, from healthcare to fintech.
Nowadays, data is the most valuable asset. Technology experts and data scientists have observed that one of the most viable usages of blockchain is in the data management sector. And the most exciting aspect is how blockchain helps make data management more secure and efficient. Let’s have a look.
What is blockchain?
Blockchain is not as easy as it sounds. But in a simplified form, we can explain blockchain as a distributed and decentralized ledger or register where all the transactional records are stored in a structured format in a database. Blockchain is an amalgamation of two words, “Block” and “Chain.” “Block” represents the transactional records or data, and “Chain”- which is a combination of database networks connected through peer-to-peer nodes. It is a highly secured “digital ledger,” unalterable, and can be shared within the network like we use Google Docs. Anybody in the network can see and modify it, but all the activities are tracked in real-time.
In the blockchain, it is vital to understand that you cannot transfer the data but rather distribute the information among all the interconnected devices, also known as nodes. That’s why blockchain has a permanent record of every transaction and information, making it the most secure data management platform.
Why use blockchain for data storage?
The current problem:
The traditional data storing concept is mainly concentrated on cloud storage. There are some advantages to using the cloud for storing massive amounts of data. But it also brings several problems for users in the data management which are:
Low security: The major disadvantage of the current data management system is that all the information is located on a centralized platform. This increases the risk of data vulnerability.
Mutability: Another drawback is during the transaction, the data is not encrypted, which makes it easier for hackers to tamper with the data.
Unclear Traceability and Authenticity: The current cloud system cannot offer any robust process to trace the source of the breach. It always raises the question of the authenticity of the data.
With the use of blockchain:
The data is stored in a decentralized manner where every involved party can control the data.
Blockchain offers transparency of the data, which is visible to everybody.
Blockchain provides tamper-evidence of the data. When a datasheet or information is changed, the blockchain captures each and every transaction, which you cannot delete.
How is data stored in a blockchain?
Data storing in the blockchain system takes place by using decentralization and cryptographic hashing. Blocks are the units or primary building components of a blockchain. Putting one block upon another generates a chain of blocks containing a data link system. Let’s have a step-by-step look.
Step-1: let’s assume that the blockchain is a wall of bricks and the starting brick on the base is the initial block for the blockchain.
Step-2: The next block stores the information about the unique hash of the previous block.
Step-3: The block stores the data and information inside it, and a hash is generated for the unique data.
Step-4: Likewise, every block preserves unique data, and therefore, a different hash is generated for every block.
Step-5: Now, if any change occurs in any data, it triggers a change in the hash key of that block. This changed hash key now cannot be fitted with the next block of the chain, and therefore, consecutive change in the data of the next block is required.
Step-6: This function triggers a simultaneous change in every block of the chain, which ultimately restricts the overall tampering of the information in the blockchain.
Benefits of blockchain for data management:
Protection of critical data:
With the advent of digital revolution, the number of cybercrimes has also drastically increased across the globe. And there is a good reason for everyone to be worried about the exploitation of their personal data. According to the Cybercrime Magazine, by 2025, cybercrime will cost $10.5 trillion per year worldwide. Hackers are not only targeting the giant organizations, but also MSMEs are getting affected by cyber-attacks.
Stringent security measures like implementing blockchain technology can provide considerable security to the data at every level. Though it is not full proof, the chances of data breach can be reduced significantly.
As we are moving into a data-driven world, which is more important is the quality of data. Every organization analyzes a giant pile of data for their business growth. And if the study is done on poor quality data, it may lead to destruction.
In the blockchain network, every piece of data is analyzed and cross-checked thoroughly before adding it to the next block. This extra layer of scrutiny ensures that the information must have superior quality or the data get rectified before passing on to the following receiver block. Gartner says that organizations will have 50% more high-quality data in their system through blockchain smart contracts.
Data Traceability and transparency:
Traceability and data transparency are now essential for every industry to grow in the competitive market. In Healthcare, food, manufacturing, pharmaceuticals, and the supply chain, every industry is struggling to get complete visibility of the data and track it on a real-time basis. To meet the high customer expectation of minimum lead time, organizations are now able to improve their efficiency by implementing blockchain in their system. Through blockchain in the supply chain, all the stakeholders can securely access the shared ledger data without any fear of tampering.
Critical data Sharing:
Data sharing without fear of losing or tampering is a tough job. The legacy systems do not provide this facility, and here comes the blockchain application. Through its decentralized nature, blockchain allows to share information to every party involved. Interestingly, by its inherent nature, everybody with a permission can see it but cannot alter it, making it more trustworthy.
The Bottom Line:
Recognizing the exceptional benefit of blockchain technology in data management, organizations are adopting it very fast. With the increase in internet usage, the chances of a data breach will also shoot up. Before it is too late, it is vital for businesses like you to implement this most advanced, highly secured, and efficient technology.