Blockchain for Data Security, Transparency, and Traceability
Blockchain, the digital distributed ledger technology, has become a prominent game-changer in the world of financial services. Blockchain technology achieves decentralized security and trust in several ways. To begin with, new blocks are always stored linearly and chronologically.
They are always added to the “end” of a blockchain. After a block has been added to the end of the blockchain, it is extremely difficult to go back and alter the contents of the block unless a majority of the network has reached a consensus to do so. That’s because each block contains its own hash, along with the hash of the block before it, as well as the previously mentioned time stamp.
The following are reasons why Data in the blockchain is claimed safe.
Security
Blockchains are secured through a variety of mechanisms that include advanced cryptographic techniques and mathematical models of behavior and decision-making. Blockchain technology is the underlying structure of most cryptocurrency systems and prevents this kind of digital money from being duplicated or destroyed.
The use of blockchain technology is also being explored in other contexts where data immutability and security are highly valuable.
Immutability and Consensus
Although many features play into the security associated with blockchain, two of the most important are the concepts of consensus and immutability.
Consensus refers to the ability of the nodes within a distributed blockchain network to agree on the true state of the network and on the validity of transactions. Typically, the process of achieving consensus is dependent on the so-called consensus algorithms.
Immutability, on the other hand, refers to the ability of blockchains to prevent alteration of transactions that have already been confirmed. Although these transactions are often related to the transfer of cryptocurrencies, they may also refer to the record of other non-monetary forms of digital data.
Combined, consensus and immutability provide the framework for data security in blockchain networks. While consensus algorithms ensure that the rules of the system are being followed and that all parties involved agree on the current state of the network - immutability guarantees the integrity of data and transaction records after each new block of data is confirmed to be valid.
Transparency
One of the major benefits of blockchain technology is its transparency. The advances in cryptography have allowed much more of a verification of the technology behind the blockchain, meaning more users are beginning to trust the network.
Fully Auditable & Valid Ledger Of Transactions
While the technology is exceptionally private, the blockchain network offers unrivaled transparency in the case of its fully auditable and valid ledger of transactions. All transactions on the site are indelible, meaning no one can attempt to manipulate, amend, or remove any of the data which has been stored, once it has been validated by the network.
If the transaction was to be changed on the network, every other block in the system would also need to be amended, which makes the whole process of changing the transactions impossible. This transparency is an automatic feature that is a key part of the blockchain network, and this reduces any need for checks and balances.
No Single Entity Control
Due to the blockchain’s decentralized network, no one single entity is able to control or manipulate the network in any way. Blockchain technology is built around a peer-to-peer network, which means regular users from around the world, known as ‘miners’, are responsible for the validation of each transaction. Through this, the platform can remain exceptionally transparent and trustworthy, leading more users to become adept at integrating blockchain technology as part of their everyday life.
There are numerous features that are a part of blockchain technology that allows users to trust in its transparency. As the technology begins to grow, and more users join the network, new features are likely to be introduced, and this is where its transparency will really begin to matter.
Traceability
In addition to transparency and security, blockchain has shown promising applications in the domain of supply chain management thereby drawing attention to blockchain traceability. The blockchain is basically a decentralized ledger or a digital system recording the transactions between multiple parties in a transparent, verifiable, immutable, and secure manner. The record of transactions could help in monitoring every phase of a business transaction carefully.
Even if the hype around the use of blockchain-based traceability has been gaining fuel, it is also important to know that many such applications are still in the stages of development.
Most of the conversations surrounding traceability in blockchain technology would refer to supply chain management. Blockchain technology introduces promising value to the domain of supply chain management and traceability is one of them. Blockchain technology, when combined with the ability for programming business logic, by leveraging smart contracts could offer better traceability.
Blockchain ensures improved transparency into the details of the provenance of consumer goods. Provenance implies the chain of custody of a product from the point of origin to the point of consumption. In addition, blockchain also improves accuracy in asset tracking throughout its journey in the supply chain.
The applications of blockchain in supply chain management, even in the existing technologically empowered world, could contribute to better efficiency. At the same time, blockchain could also help in ensuring auditable tracking of assets alongside restricting exploitative behaviors.
As a buzzword on the tongue of every investor in the nation, blockchain stands to make business and government operations more accurate, efficient, secure, and cheap, with fewer middlemen.
Article References:
https://www.analyticsinsight.net/transparency-blockchain-helps-improve-data-security/
https://blogs.adb.org/blog/how-secure-blockchain
Disclaimer: The views, thoughts, and opinions expressed in the text above belong solely to the author, and don’t reflect views of the author’s employer, organization, committee, or other group or individual.
Corporate Lawyer, Strategist, Author
2 年Dr. Neil Carruthers Umaima Baqer