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How Blockchain Can be Used to Secure Sensitive Data Storage

By   /  November 7, 2017  /  No Comments

Click to learn more about author Mary Ann Callahan.

Data Security is no longer a luxury or an afterthought. With so much of our private, personal, and sensitive information being stored and transmitted online, tight security and privacy are now necessities for everyone.

But, just as more of our lives are going online, we are hearing about more data breaches and hacks than ever. Here we’re going to take a look at how Blockchain technology can improve on current, centralized data security solutions, and help keep us safe and in control.

Data Security – A Global Crisis

Data is quickly becoming one of the most valuable resources in the world. The list of the top 10 companies by market capitalization is now dominated by data-centric companies like Facebook, Alphabet, Microsoft, Apple, and Amazon. That value means your data, especially your sensitive data, is now a prime target for cyber criminals, and you probably aren’t as protected as you think.

Even giant companies like Anthem, Target Corp, and Home Depot have had major data breaches over the last few years affecting hundreds of millions of people. Clearly, current solutions aren’t good enough to keep us safe.

Cloud services often aren’t the solution either. As hugely centralized systems, they are more valuable targets still. You also need to trust a 3rd party to store your sensitive data for you, which for many companies often isn’t desirable or even legal. A new solution is needed.

Blockchain as an Alternative

Blockchain technology has been one of the major technological breakthroughs of this century. Bitcoin, the first Blockchain application, allows a network of users to perform transactions without requiring the trust of anyone on the network, or a third party. Everything is encrypted, and nobody can tamper with the Blockchain without everyone else noticing immediately.

Bitcoin has deeply penetrated into our daily lives and proven to be remarkably effective as an investment, means of payment and earning asset. Today the cryptocurrency ecosystem is advanced enough to let practically everybody get into Bitcoin at the click of a button. There are cryptocurrency exchanges like CEX.IO that provide users with a wide range of tools for trading, buying and selling, as well as simply storing Bitcoins and altcoins securely on their platforms.

Blockchain for Data Storage

There are a few ways that a Blockchain can be used in distributed storage software. One of the most common is to:

  1. Break up data into chunks.
  2. Encrypt the data so that you are the only one with access to it.
  3. Distribute files across a network in a way that means all your files are available, even if part of the network is down.

Essentially, instead of handing your files to a company like Amazon or Microsoft, you distribute it across a network of people all over the world. The cloud is shared by the community, and nobody can read or tamper with anyone else’s sensitive data. In other words, you stay in control. This could also be useful in public services to keep public records safe, available, and decentralized.

Another model is to just save a cryptographic signature of a document or file on a Blockchain. This would give users a way to ensure a file is untampered, without needing to save the entire file on the Blockchain. When you look at a file, you can guarantee that it is the same version of the document that existed at another time.

Smart contracts can also be used with Blockchains. These ensure that certain transactions happen when certain conditions are met, meaning records can be programmed to be changed or updated automatically.

Advantages and Benefits

There are some awesome benefits to using a Cloud storage model. Including:

  • Peer to peer networks can make download speeds lightning fast (similar to torrenting).
  • Your data is distributed all over the world, so it is highly available when you need it.
  • You don’t have to worry about anyone else having access to any of your data.
  • It can be extremely cheap – as low as $2 per TB per month.
  • If you have some extra space lying around, you could ‘rent out’ your free space and actually earn money.
  • With a large network with many reliable participants, clever techniques could mean a very low level of redundancy factor, even as low as 1.5.
  • The immutable nature of Blockchain records means you can know if a file is accurate and unaltered.

Possible Problems and Limitations

There aren’t many Blockchain storage products available yet because there are some challenges that need to be solved first:

  • Security is limited by the size of the network. If a Blockchain network isn’t large or well distributed, it becomes vulnerable to attacks.
  • More redundancy may be needed than other storage models if the network isn’t big or reliable enough.
  • Network communication overhead can be huge. This is a problem for engineers and will largely determine how viable this technology will be. A balance between usability, speed, and security needs to be found.
  • Network bandwidth could be a problem as we can see this with Bitcoin. With a maximum of seven transactions per second, Bitcoin is getting slower and more expensive to use.

Current Blockchain Storage Products Available

Blockchain technology is still in its infancy. However, there are a few organizations developing some great ideas.

Storj.io and Sia.tech are two Blockchain storage products available right now. These are early examples of this kind of technology, and there will be more to come. Filecoin is another product (although this one doesn’t quite exist yet) allows individuals to mine Filecoin by sharing storage space (similar to mining Bitcoin by helping secure the network). Filecoins can then be traded for storage space on the Filecoin network or converted to Bitcoin, altcoins, or cash.

Other Possible Blockchain Storage Applications

Healthcare data could be a great fit for Blockchain technology. Organizations struggle with keeping patient data secure, up-to-date, auditable, and accessible to all parties. These are all things Blockchain technologies are perfect for. It’s still early days, but this could revolutionize how health records are handled.

Exciting Times Ahead

Blockchain technology is expected to disrupt many different industries. The secure data storage market is currently dominated by huge third-party providers, and now it is one of the key targets for Blockchain developers.

Soon, everyone could all have access to cheap, secure ways of handling even the most sensitive data, without needing to trust in any third parties.

About the author

Mary Ann Callahan was born in Madrid, Spain. She is an expert in Bitcoin and Blockchain-related topics. Her experience has spanned across the high technology world as well as many other industries, from her current work as a Journalist and Blockchain authority at Cex.io, a cryptocurrency exchange, to work at Social Media Marketing Manager at Boston Globe Media, and within the Morrison & Foerster LLP. She holds a B.S in Economics from Yale University, and a M.S. in Journalism from Columbia University. She has writte on many technical topics, especially related to Blockchain security, Bitcoin regulations for many different countries, and related purchase and help guides.

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