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Posts Tagged ‘blockchain and security’

Assuming you’ve digested our prior post on blockchain basics and its importance in creating secure transactions, we’ll look now in this second post at some applications that are aimed at proving blockchain’s value to users everywhere

We noted earlier that blockchain provides secure digitally-signed access to transactions to all members of the chain.  The data is distributed across a network of servers rather than just a single server, thus making it transparent, immutable and secure for reasons touted earlier.  So then, what can we do with this new framework that will make a difference in our own lives?  Let’s look at a few examples, as provided in a recent article by Nir Ksahetri, a business professor at the Univ. of North Carolina, in a recent article in The Wall Street Journal.

Let’s start with distribution.  A number of companies including Cisco Systems, Bosch and Bank of New York Mellon have banded together to create a blockchain-based IoT security standard, to bind together weaker IoT identities like serial numbers, barcodes, UPCs and QR codes into stronger crypto-graphic entities.  Widespread use would allow device makers to securely distribute updates and patches, even if a device is moved or sold (since all that information would be part of the blockchain transaction record).  Manufacturers can be sure they’re communicating with the right dev ice.

In health care and banking, providers today store your personal information and we as consumers have little control over who sees it or shares it.  With blockchain, entire medical records or banking records can be stored in encrypted ledgers with the patient’s private-key.  Changes to the record can be communicated via public keys and providers with permission can see the data with patient or customer authorization and permission, but they can’t store it.

In developing countries, land fraud due to administrative corruption is a problem.   Corrupt officials alter property records to benefit themselves in exchange for bribes, creating land fraud.  With blockchain, if a property changes ownership, the transaction record reflects time, location, price and parties involved.  Government agencies can authenticate the title information when entered, and law enforcement agencies can inspect documents to enforce compliance with “know-your-customer” and anti-money laundering policies.  Blockchain of course also protects against unauthorized access to data and the owner controls the ultimate (private-key) record.

All these applications, and many more, are being (or have been) developed utilizing blockchain technology, and we’re only at the beginning.  While challenges loom, like bringing down costs at the IoT and labeling level, creating wider user-community acceptance and providing better communication to decision makers of blockchain’s many benefits, it’s all coming.  Already nearly four in ten companies (of 369) surveyed a year ago by the Journal were deploying or considering deployment of blockchain technology.  It’s only a matter of time.

 

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Among the most promising of new technologies, yet one that most people know virtually nothing about, is blockchain.  And yet, it’s going to be very important – already is, some argue – to commerce around the world.  One key reason is the very thing that most computer users lately have come to fear the most: security.  Security is getting harder these days, not easier, and blockchain may well be the answer.

If you’ve heard about blockchain at all, it probably has something to do with bitcoin or other so-called cryptocurrencies, a new mode of currency that is in fact built on top of a blockchain, but which are at best a distraction from blockchain’s real value and importance.  Ignore all the bitcoin hype and naysayers might still argue that blockchain is just another way of doing computerized accounting.  Fair enough.  But the technology is so much more important than even that.  And its success could revolutionize the world of computer security, one that ultimately affects all of us as users.

Fair to say, blockchain is deserving of your attention if you work in the world of business, information technology, or are just a day to day user of modern technology – which adds up to most of us.

What is blockchain? Simply put, it’s a digital record of transactions that are stored on multiple servers around the world.  It could be hundreds of computers, thousands, or even millions.  Because of blockchain’s method of distributing data over a network, it doesn’t carry the weight and responsibility of trying to store (and secure) all that data on a single server.  That means that it cannot be easily tampered with, hacked or disturbed.  Post a record of a transaction on a blockchain, and it’s there for all the world to see, safely encrypted no less, but visible to all with rights to see it, rendering it virtually impossible to alter or falsify the record.

Blockchains use secure digital signatures to verify a user’s identity.  Users validate transactions through a private key when a user creates an account.  A private key is a very long, random and virtually impossible-to-hack alphanumeric code known only to the person who controls the record.  Other users can then have access to public keys created from those private keys to share selected (allowed) information.  So a common example is a bitcoin ‘wallet’ where others can send bitcoin payments (using a public key) but only the person with the private key can spend the bitcoin.

Notably, this blockchain security has never been hacked.  (Bitcoin exchanges have been hacked, but the underlying blockchain has never been hacked.)

As Nir Kshetri, professor of business at the Univ. of No. Carolina points out, “Blockchain’s key features – decentralizations, immutability and cryptography-based authentication – are what make it such a powerful cybersecurity tool.  A user’s identity cannot be forged because only he or she has the private-key proof of identity.  Third parties can be given limited access to records, while blockchain’s built-in audit trail means there is complete documentation of the creation, modification and deletion of records.”

This has very real and powerful implications to applications ranging from simple barcoding to the Internet of Things in the world’s supply chains, and in realms ranging from the storing of your personal medical records to the elimination of land transaction fraud in Africa.

We’ll take a look at how blockchain can bring secure access to a whole new world of applications like these in our follow-up post.  Stay tuned…

 

 

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