Fortifying Data with Blockchain

Fortifying Data with Blockchain

Capital Markets CIO Outlook | Friday, November 30, 2018

A few decades back, computer data was stored and shared in a simple way wherein one would copy data to a computer from a CD, USB drive, floppy disk, or an external hard drive. With the advent of the internet, this process became even simpler. People started sharing data over the network or over the cloud. However, an important question that people started thinking about at this point is whether the information shared over the internet was accessible by one person or if there are multiple copies of it. Fast forward a few years, around 2009 blockchain technology rose to prominence and revolutionized the way data is stored, recorded, and shared.

Cryptography, the area of knowledge focused on securing data in a hidden and encrypted way is the bedrock of blockchain. With its roots in military communications that date back to hundreds of years, cryptography was used for the sole purpose of transmitting information securely to the desired recipient. At the fundamental level, blockchain leverages Public-Private Key cryptography that locks the data down so that it is accessible to only those who have the private keys. Anyone on the blockchain network can see the existence of the data blocks, but only the intended recipient with the private keys can unlock them. The data stored in the blocks are connected to each new block added to the chain over a period of time. While the blocks can be shared with anyone in the network, a cryptographic function ensures that each block is identical in the network. All in all, blockchain serves as a means to prove that each block of data is unique, unalterable, and can be used by only the by intended recipients.

Bitcoin implemented this technology to create not only the most secure and powerful computer network in the world but also the most fortified financial system that holds billions of US dollars. The accounts on the Bitcoin network are presumably the most secure accounts, which nobody has ever been able to break into.

We have entered an era of sharing data freely and also securing important data with people we want over a distributed network. Behind the scenes, blockchain and cryptocurrency are at work to maintain the impenetrability of this network.

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