Blockchain is a public ledger made up of a sequence of blocks, which maintains a full history of past transactions within the network – activities in any organization can be improved using blockchain technology.
The evolution of the digital world has not only helped businesses but also, at the same time, increased the sophistication of malicious and fraudulent activities via new technologies and tools. The lack of awareness and necessary security infrastructure leaves businesses big or small susceptible to cyber-attacks. As per a recent report by the CERT India ministry, India witnessed a 300% rise in cyber-attacks amid COVID-19 in 2020.
As the industry transitions to a more technology-driven and virtual model, there is an increasing need for fortifying remote infrastructure with a robust security model. In the cybersecurity sector, blockchain technology is creating new opportunities for enabling transparency and safeguarding data. It is considered a viable technology that ensures data security and faster transactions. Though it gained popularity for its applications in cryptocurrency, it has now expanded into other sectors that require secure transactions of data, including healthcare, supply chain management, real estate, and more.
Blockchain is a public ledger made up of a sequence of blocks, which maintains a full history of past transactions within the network – activities in any organization can be improved using blockchain technology. The most important aspect of blockchain is the availability and authentication of data throughout the multiple machines in the network. This means that along with providing a quality authentication process for data, blockchain can also track individuals and their behavioral patterns, habits, and other personal data. In order to maintain the privacy of digital assets, blockchain uses pseudonyms to conceal the identity of users. Additionally, the decentralization and application of privacy algorithms through cryptic functions can ensure the authenticity of data.
Here’s how blockchain technology can promote transparency in businesses:
1. Non-Corruptibility: Non-Corruptibility or Immutability refers to something that cannot be altered or changed. Since blockchain technology works through a collection of nodes, each node checks the validity of the transaction. Only if the majority of nodes think the transaction is valid, is it added to the ledger. It is these thorough checks that promote transparency and make it non-corruptible. Additionally, once a transaction is added to the ledger, no user can edit, delete, or update it.
2. Decentralization: Blockchain also promotes a decentralized mechanism as the record of transactions are decentralized and stored in various nodes across a network that has access to copies of that record.
3. Distributed ledgers: Public Ledgers often provide information about the transaction and the participant. The case with private or federated blockchain is different. Overall, the ledger is distributed and maintained by all users on the systems, making it more efficient.
4. Consensus: Blockchain works on the consensus algorithm. The architecture is cleverly designed as participants add to a shared ledger that records all transactions, these are then further validated and accepted by users based on a consensus.
5. Faster Settlement: Unlike traditional and regular banking systems, blockchain processing is fast and thus saves a lot of time.
6. Security and Privacy: Elimination of the need for a central authority prevents anyone from changing network characteristics for their benefit. Cryptography and encryption can ensure a double layer security check.
One of the solutions proposed for data security is the ‘out of chain technique’, which anchors the sensitive information in another system and provides a link in the blockchain. For systems that deal with heavy amounts of sensitive data, such as banking, healthcare, and business, this technique proves to be an apt data security solution. Other solutions, including attribute-based signatures, consensus algorithms, and protocols, have also been proposed, though they are yet to provide a one-stop solution for anonymization. Some of them provide conditional anonymity since they are not based on decentralization but include signatures to increase the data validity.
Overall, the implementation of blockchain technology for improved transparency in business is still at the emerging stage. Good progress in research, strong imposition of standards, and a more transparent societal outlook are crucial to increase efficiency, awareness, and trust
Source: Business World