Click to learn more about co-authors Harsh Arora and Archi Bhatia.
The increase in the financial needs of the current generation has brought blockchain and cloud computing into the limelight, even though both have been in the technological arena for many years.
The desire for transacting without any third-party involvement is the reason for the development and increase in attention toward blockchain, bitcoin, and cloud computing as next-generation financial technologies.
If big businesses want accountability, they need to update their ledgers on the blockchain. The main question is, are they willing and aware of the new technology?
Let us discuss what both blockchain and cloud computing are before explaining their differences and the relationship between them.
What Is Blockchain?
Blockchain technology is an online ledger technology that provides information to a company and helps them record their transactions easily. The ledger is encrypted, so the communication in this sector can be done between the company and peer-to-peer network only when it is verified.
Blockchain is the best way of transferring information from A to B without worrying about false information being stored in the ledger, as that would falsify the entire chain of millions of instances. The technology offers accountability, as the transactions that are recorded are only through multiple-party verification, and no transaction in the ledger can be altered by the parties at a later stage.
Note: Bitcoin uses this model for logging in the monetary transaction, as the record developed is unique and with a unique history.
How Blockchain Works
Each transaction that is made is verified by the parties involved in the transaction. These transactions are also known as “blocks.” Once the transaction is verified by each party, the transaction involved is solved through a mathematical puzzle and is entered in the ledger chain.
Once any entry of the transaction is made, no other person can make an alteration to the entry. This makes the transaction safe and authentic. Blockchain was originally devised for digital currency such as Bitcoin, but it is now used for distributing digital information (not for copying the technology).
What Is Cloud Computing?
Cloud computing provides delivery of computing services such as storage, databases, networking, and data processing over the internet instead of a local server or a personal computer. It is also referred to as “the cloud.”The cloud here acts as a metaphor for the internet.
The cloud services you use are cost-effective, and major banks around the world are using the cloud computing system to solve their Data Management issues.
How Cloud Computing Works
Cloud computing services provide a browser-based dashboard that makes it easier for IT professionals and developers to organize their resources and manage their accounts effectively.
Cloud services are also designed to work with REST APIs and command line interfaces. Cloud computing works on a traditional database architecture where the data is stored on the machines of all the participants involved.
Blockchain’s Best Features for Corporations
Blockchain is an incorruptible online ledger of economic transactions that can be programmed only through validation from every party involved. The data is managed through a cluster of computers that is not owned by any single party, so the data submitted is not corruptible.
Moreover, since blockchain has broker-free characteristics, there are no unnecessary fees that are incurred by the parties involved in the transaction. Corporations bear no transaction cost – other than paying for the architecture of the technology – when managing their transaction on blockchain, so it can be a more cost-effective method for corporations than cloud computing.
Blockchain has the capability of disrupting many industries, as it can be used not only for storing financial transactions but also for managing the intellectual property of the company and producing “smart IP.”
In a technology-heavy environment, blockchain is attracting many industries for its potential uses, as many types of information can be added to the blockchain, ranging from bitcoin transactions to any type of contractual information.
With blockchain, it is possible to store information about any or all of the registered intellectual property, as well as any trademarks, designs, or patents that are still in the registry stage or if the party is fighting the case.
As the stored information cannot be altered, it can be used in any of the trademark infringement or patent infringement cases that the proprietor faces after registration.
If the registries start using the system, the IP registry will also facilitate and crate immutable record of events for the entire life of that intellectual property. This can be extremely helpful in managing patent registration and while evaluating the patent.
The Switch from Cloud Computing to Blockchain
There is a lot of interest in the blockchain technology all over the world, and in every industry; it is not just limited to finance. The bubble of cryptocurrency burst and brought in a huge increase in the investment of bitcoin and other cryptocurrencies.
Furthermore, many start-ups have started thinking about using blockchain technology not just for financial transactions but for storing sensitive information, as massive leaks in the cloud computing sector are not unheard of – as was seen in the case of Deep Roots Analytics,where the sensitive information of 198 million Americans was accidentally leaked. This showed that cloud computing’s centralized approach is no longer secure.
This brings us back to the hybrid cloud approach, where companies incorporate blockchain into cloud computing and store data on both public and private cloud. There are many start-ups that are now selling their surplus storage capacity for uploading files on the companies and corporations.
The blockchain technology is a very complex process that needs to be explained through the following structure.
Is Blockchain Going to Take Over Cloud Computing?
Well, blockchain can definitely ensure the security of the information. The data stored in blockchain is fully centralized, as it is stored in multiple nodes all over the globe instead of in just one place. This solves the issue of protection of data in case there is an error in storing information.
The files that are uploaded on the blockchain are not controlled by or accessible to any single party. Moreover, every party holding the information has a key that can be used to access the encrypted files.
And even if someone is able to access your file, it is a partial file, which is useless to the person accessing it. The possibility of blockchain technology taking over is highly probable.