As cryptocurrency Bitcoin hit a record high price in 2017, those in the technology and finance industries were discussing one term more and more often — blockchain, a data storage technology behind several cryptocurrencies. What is blockchain? How can it help with regards to data storage security? How will it be utilized across different industries? In spite of its benefits for companies and organizations, the technology is still in its early stages of development. What should companies consider if they want to implement blockchain and what are the potential challenges?As cryptocurrency Bitcoin hit a record high price in 2017, those in the technology and finance industries were discussing one term more and more often — blockchain, a data storage technology behind several cryptocurrencies. What is blockchain? How can it help with regards to data storage security? How will it be utilized across different industries? In spite of its benefits for companies and organizations, the technology is still in its early stages of development. What should companies consider if they want to implement blockchain and what are the potential challenges?
What is Blockchain?
Blockchain technology, which first garnered widespread attention from its use with cryptocurrency Bitcoin, is seen as a critical next-generation technology for many industries. What is blockchain exactly and how can it aid the current status quo?
First known from its role as a fundamental technology of cryptocurrency Bitcoin, blockchain has become an oft-discussed emerging technology across industries. Due to the special characteristics of blockchain, the technology has been recognized as the next mainstream method for data storage.
A Blockchain Primer
The term "blockchain" is assembled from "block" and "chain." A "block" is a box to store data, and "blockchain" is the gathering of the data blocks in the form of chains. Each block of data is encrypted and only allows access to authorized users. Each block is bound to each other using cryptographic principles, like chains.
The whole blockchain can also be described as a series of records of data, managed by a cluster of computers that aren't owned by any single entity. In other words, there's no central authority in the data storage system, which keeps it democratized.
The system structure has allowed blockchain to provide the CIA triad of cybersecurity (confidentiality, integrity and availability), said Tanner Johnson, Senior Analyst of Cybersecurity Technology and Internet of Things at IHS Markit.
"Confidentiality prevents unauthorized individuals from viewing information. Integrity prevents unauthorized individuals from altering or modifying information. Availability ensures that authorized individuals always have access to the information in question.”
Besides, added Johnson, the nonrepudiation and attestation of blockchain helps prevent individuals from denying their digital actions by providing accompanying evidence of their activities. Everyone can access and trust the data maintained in blockchain, whether the data is shared on a public or private network. Blockchain has great potential for security applications.
Applications of blockchain
"The applications of blockchain are as limitless as the applications of any technology. If there is an environment in which individuals wish to share information securely, blockchain technology can be implemented to address this requirement," said Johnson. "From large scale cloud data analytics, to the transactional data from financial institutions, the security protections offered through blockchain technology can apply to almost any market imaginable.”
The US Department of Homeland Security (DHS) has used blockchain technology to secure the transmission and storage of information collected from a wide range of sources, from individual security cameras to large data centers. Even data from outdated surveillance devices can be stored and maintained securely.
US officials are also considering implementing blockchain into the systems of the Transportation Security Administration (TSA). Currently, much of the TSA's work at checkpoints at airports is done manually and by visual assessment. With blockchain technology, the TSA looks to accelerate, automate and help secure the credential validation processes at checkpoints.
Other industries, such as hospitals, are also expected to utilize blockchain technology. Medical institutions deal with enormous amounts of personally identifiable information (PII) and personal medical information (PMI), which could easily attract hackers causing identity theft and other data breaches. Storing patient data on the blockchain should help hospitals add another layer of security.
Adopting blockchain still a challenge
Blockchain does benefit companies and organizations when it comes to data security. To adopt a new technology like blockchain, however, isn't easy for them in general. "I see the biggest challenge to organizations adopting blockchain technology is a fundamental lack of knowledge. Even those organizations who are aware of the technology may struggle with developing a comprehensive strategy to transition to this technology without disrupting current operations," said Johnson.
"Unfortunately, security and convenience can be mutually exclusive, as the more secure a system is, the more checkpoints a legitimate user must navigate to use it. Unless an organization is willing to invest fully into understanding how best to implement blockchain technology, while ensuring continuous operation, many companies may be unwilling to adopt the solution.”