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…