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5 Ways Blockchain Impacts Cybersecurity and Protects Data

6 June 2022

Cybersecurity is a serious issue for any business operating on digital platforms. It involves all the processes, controls, and technologies used to safeguard networks, systems, devices, programs, and data.

Cybersecurity is the approach organizations and individuals employ to prevent cyber attacks. Its primary function is to protect devices, data, and services that we access online from theft and loss. It’s a core safeguarding measure that prevents unauthorized access to online data.

Unfortunately, in today’s fast-paced digital world, cyber-attacks evolve as quickly as new security solutions, with hackers continuing to develop more sophisticated techniques to penetrate online systems.

Small businesses aren’t the only victims of cyber attacks and data breaches. Large tech companies such as UCaaS providers also recognize the need for smart security solutions to protect user information.

Why is Cybersecurity Important?

The emergence of digital platforms and mobile devices means people are spending more time online. Computers, smartphones, and the internet play a prominent role in today’s society.

As the world transitions to digital solutions for shopping, banking, and messaging, we must take proactive steps to secure online devices, accounts, and data.

Cyberattacks cost companies millions every year and, as a result, investment in cybersecurity continues to rise. Successful cyberattacks can cripple any business, and a data breach could inflict serious financial damage.

Cybersecurity is particularly important for online platforms that collect user data like banking details. User data can also be personal information to help businesses personalize the customer experience through marketing communications tools.

Your customers require a guarantee that the personal information they share with you is safe. A data breach is the fastest way to lose trust and gain a bad reputation.

Using a blockchain can significantly improve cybersecurity. You can customize a private blockchain or configure a public network for your specific requirements. In both cases, you get to enjoy the benefits of a solid security system.

What is a Blockchain?

A blockchain refers to a decentralized database distributed between several computer network nodes.

Cryptocurrency systems - like Ethereum and Bitcoin - use blockchains to create a decentralized and secure system. This helps prevent fraud and provides accurate transaction records.

Crypto traders often complement blockchain tech with a VPN  as an extra layer of security. VPNs help shield your IP address to ensure hackers can’t pinpoint your location.

Modern applications of blockchain tech are now taking center stage. From blockchain-based phone call transcription to private distributed ledgers for financial services, this technology is here to stay.

The high point of using a blockchain is the transparency it brings to transactions. This generates trust without involving a third party.

The primary difference between blockchains and run-of-the-mill databases is the data structure. A database structures data in tabular form, while a blockchain groups information in blocks. These blocks have storage capacities that can’t be exceeded.

When a block reaches maximum capacity, it closes, and a new block is formed and linked to its predecessor. Multiple information blocks create a data chain called the blockchain.

This structure creates an immutable data timeline of actions within the system. Filled blocks can’t be altered or deleted from the timeline. The blocks that form the blockchain carry a timestamp indicating their entry into the chain.

Blockchain technology is built on three basic elements: confidentiality, data integrity, and availability.

A blockchain is adaptable to a wide range of applications in different industries. Even established tech, like emails, can benefit from a blockchain network.

For example, emails sent and stored by a blockchain are permanently recorded and can’t be altered by a third party. This secures the email marketing incentives marketers rely on to create tailored messages for clients.

Applying its assurance of fidelity to bolster cybersecurity solutions is among blockchain’s primary uses.

How Does Blockchain Improve Cybersecurity and Data Protection?

The ultimate aim of a blockchain is to manage the secure and transparent recording and distribution of data by reducing the likelihood of data leaks. This makes blockchain tech the building block for immutable online activities.

Its application in creating secure transaction records and ledgers has earned it the name “distributed ledger technology” (DLT).

Here are some of the ways a blockchain can bolster data protection and cybersecurity.

1. Reduces the Risk of Data Theft and Fraud

Blockchain tech offers one of the most robust data protection systems out there. This helps reduce the occurrence of fraudulent activities and data theft.

Blockchain gives you confidence in the security of your data and online transactions, so it’s not surprising that global spending on blockchain solutions is projected to rise in the next few years.

For example, a hacker might set out to corrupt the data on a blockchain. To achieve this, the hacker would have to access the personal computers of all the users. Networks could include several million users having all or some of the data.

The hacker would need to simultaneously destroy the entire network to succeed. If any system is left unaffected, it will continue to keep data records and verify network activities.

The more users on the network, the harder it is to corrupt the system. Large blockchain networks face a low risk of cyberattacks for this reason.

The same rules apply to hackers who try to make unauthorized changes or falsify records on the network.

2. Decentralizes Storage and Record-Keeping

Decentralized storage is among the top security capabilities of a blockchain. You have the option of storing network data on a personal computer. Distributed storage ensures the system (blockchain) cannot collapse or be deleted.

When hackers try to access the information stored in blocks, the system searches each block in the chain to identify the affected block. It recognizes such blocks as false and can then separate them from the chain.

Blockchains run a system without a stand-alone authority, administrator, or storage site. All network users have storage access to the blockchain.

There is collective admin responsibility to verify data storage and sharing to prevent unauthorized access.

3. Boosts IoT security

The IoT (internet of things) market is growing, and the number of IoT devices is reaching new highs.

Unfortunately, these edge devices like routers and thermostats are common entry points for hackers.

They can use these to gain access to the general system. The emergence of AI (artificial intelligence) tools has created more opportunities for cyberattacks with the introduction of smart switches.

By decentralizing the administration of these devices and their overall systems, blockchain tech can significantly boost security.

Each device will have an independent operational function. Ergo, it no longer depends on a centralized authority or admin. Decentralization means edge devices can detect and take action against prompts from unauthorized users.

4. Secures Software Downloads

A blockchain can also help secure software downloads to prevent unauthorized access to personal systems.

Blockchain tech can be used to ensure the integrity of firmware updates, patches, and installers. This can help to avoid downloading viruses and other malicious software that could give hackers access to your data.

The widely used message-digest algorithm, MD5, has serious vulnerabilities. It verifies the identity of new software by comparing this with hashes on vendor websites. However, this approach is futile if the hashes on the vendor’s website are already corrupted.

Luckily, the immutable nature of data in blockchains means hashes are permanently recorded and cannot be corrupted. In this case, they must have passed a smoke test meaning they’re safe for download.

Blockchain tech thus presents a far more reliable means of verifying the authenticity of software downloads.

5. Improves Messaging Security

Social media is on the rise. That statement has been relevant for several years now and shows no signs of slowing down.

Social media platforms are significantly increasing the popularity of conversational commerce, with instant messaging and its alternatives connecting people across the globe 24/7.

Staggering amounts of metadata are generated from these conversations, but many users rely on weak passwords as their only form of protection. Online messaging providers are therefore turning to blockchain to secure user data.

Blockchain tech is replacing end-to-end encryption as the go-to security option. Blockchains make it possible to develop standard security protocols. These can be used to build unified API frameworks that enable the functionality of cross-messenger communication.

Blockchain technology changes the way systems identify users. It can simplify the authentication process for online registers like referral platforms, for example.

Businesses such as VoIP call centers also stand to gain a lot from secure caller authentication. Introducing blockchain tech means callers can be identified without any interference and hackers cannot make unwanted calls.

Blockchains can make cyberattacks on communication systems a thing of the past, whereas data breaches could allow unauthorized access and spark serious privacy concerns.

Blockchain Your Way to Data Security

Among its many functions and benefits, the ability to decentralize is the centerpiece of blockchain technology. This function eliminates the possibility of attacking a central target to destroy a network. With distributed nodes/blocks, it becomes much more difficult to penetrate online systems. This makes blockchain tech one of the most exciting approaches to prevent cyberattacks and secure data.

Nevertheless, the system does have a few drawbacks. For example, the dependence on private keys for access can pose problems. These keys are the only way to access the system and cannot be recovered or replaced if lost.

The pros, however, far outweigh the cons, and blockchain technology looks set to revolutionize cybersecurity in the coming years.

Author's Bio:

Jessica Day is the Senior Director for Marketing Strategy at Dialpad, a modern business communications platform that takes every kind of conversation to the next level with inbound call center software—turning conversations into opportunities. Jessica is an expert in collaborating with multifunctional teams to execute and optimize marketing efforts, for both company and client campaigns. Here is her LinkedIn

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