We live in a digital era, surrounded by technology, where pretty much everything is powered by some sort of software, be it a phone, a TV, a car, or even a fridge.
Granted, while hackers aren’t out to steal your grocery list, businesses and data centers that store sensitive information are often a target of cyber-attacks like ransomware, malware, and phishing attacks, to name a few.
Not to worry, though—technologies like blockchain can revolutionize cybersecurity by decentralizing assets, applications, and security infrastructure.
But what exactly is a blockchain and how does it work?
To answer that, and more, we’ve prepared everything you need to know about blockchain, how it can strengthen online security, and a few use cases.
Understanding Blockchain Technology
Blockchain is defined as a distributed ledger of information. Unlike traditional data centers that store all the information on one or a few servers, all the information available on a blockchain is spread across the entire network of users.
The available information is stored in so-called blocks of data. These blocks are “chained” together and protected by cryptography.
Most blockchains are decentralized, which means no single entity has full control over a blockchain, and the control is shared across all users. Because of that, decentralized blockchains are immutable.
Take a look at Bitcoin transactions, for example. Every transaction is irreversible and permanently recorded on a public blockchain, which is viewable by anyone. Not only does this make blockchain transparent, but it also prevents hackers from tampering with the information available on the blockchain.
To change the information recorded on a blockchain, hackers would need to control the majority of the network, which is known as the 51% attack. However, an attack like this is virtually impossible and unfeasible—it requires an enormous amount of computing power, especially when it comes to large and decentralized networks.
Since there is no way to change a block without having control over most of the network, the only trust needed is at a point where the user or software enter data onto the network. In other words, blockchain technology can significantly reduce the need for trusted third parties, lowering the cost of operation and reducing, if not eliminating, the risk of human error.
Cybersecurity and the Need for Enhanced Protection
Cybersecurity is one of the most important factors to consider before starting a modern-day business or a service where any money or sensitive data is involved. Based on the latest findings by the World Economic Forum, cybercrime is expected to cost the world around $10.5 trillion by the end of 2025.
While the latest advancements in technology are making the internet and devices that rely on it more accessible than ever, global connectivity also increases the risk of cyber-attacks. To make matters worse, our society is more technologically reliant than ever before, especially if you consider we have a number of potential security vulnerabilities that didn’t exist just a few years ago.
Hackers are also stepping up their game and continuously looking for ways to circumvent standard security measures, so traditional methods like antivirus software and firewalls simply don’t cut it anymore. Instead, businesses should rely on multiple layers of security or use technologies like blockchain that can revolutionize cybersecurity.
How Blockchain Technology Can Enhance Online Security
Blockchains vary in size, role, transparency, and even in the way transactions are processed. However, regardless of its structure, a decentralized blockchain eliminates a single point of failure, making it significantly more secure than a standard method of storing data.
Blockchain technology uses several built-in features, such as cryptography, public and private keys, smart contracts, and more. By using these security qualities, verifying access, and ownership of data, blockchain networks can ensure the integrity of data and its safety.
Another benefit of blockchain technology is in the structure of the blockchain itself. Whenever a data block is full, it is assigned a previous block’s hash. If a hacker changed data in one block, it would also change the data in the following blocks and the network would simply reject the altered block since the hashes would not match.
With all that in mind, blockchain technology excels in securing sensitive data, and it can also be used to protect against data breaches, prevent fraud, and much more. In fact, many businesses around the world are already using blockchain technology to their advantage.
For example, JPMorgan Chase uses smart contracts to process private transactions, while Barclays relies on blockchain technology to improve its security when it comes to fund transfers. On the other hand, Philips, which uses AI to analyze all aspects of the healthcare system, also relies on blockchain technology to secure all the data AI has collected.
In addition to financial institutions and the healthcare industry, blockchain is also used by governments, for securing military and defense data, IoT, and it also plays a massive role in the online gambling industry.
Blockchain Technology in Online Gambling
Financial transactions are the backbone of every online casino, and with crypto casinos surging in popularity, blockchain quickly became an essential part of online gambling. However, did you know that blockchain in the online gambling industry is used for much more than just processing transactions?
Websites like CasinosBlockchain are major proponents of fair and transparent gambling, which is precisely the area where blockchain technology comes in handy. Many crypto casinos feature provably fair games, allowing users to verify the outcome of each result.
Before the game even starts, the algorithm generates an encrypted key with the result of the game. Every participant is also sent a key which players can use at the end of the game to verify the fairness of the result at the end of the session.
Advantages and Challenges of Using Blockchain Technology for Cybersecurity
Blockchain technology has revolutionized many industries across various sectors. It is important for businesses, small or big, to consider the use of blockchain in cybersecurity.
In addition to improved transparency, decentralization, immutability, and enhanced security, blockchain increases the trust and traceability of data shared across a blockchain network. Moreover, blockchain can also make any existing security much more efficient while simultaneously reducing the amount businesses spend on cybersecurity.
Of course, before taking the plunge, there are several downsides any business owner should consider.
For example, scalability is one of the main disadvantages of blockchain. Since all the information is stored across all the nodes, validation time can take significantly longer as the network grows, which can cause small and medium-sized businesses to struggle with an increasing number of transactions on the network.
Regulation is yet another downside to using blockchain for data security. For example, certain laws around the globe allow individuals to request their data to be deleted. However, since all the data on a blockchain is immutable, using blockchain technology may risk violating certain laws and government rules.
Wrapping Up
An updated cybersecurity strategy is essential for any modern-day business, especially those that process a massive number of transactions on a daily basis.
The good news is that blockchain technology comes with a slew of built-in security qualities that can revolutionize cybersecurity and help protect businesses from new threats.
Granted, while there are some downsides to completely relying on the blockchain, no individual can deny the advantages blockchain brings, which is why it is only a matter of time before technologies like blockchain become standard in cybersecurity.
