Today, companies that can guarantee transactions are at an incredible advantage. So many people are using digital devices to place orders that it has become overwhelming to many smaller businesses. Traditional methods are not able to keep up with all this data coming in from so many sources. That’s why we see so many data breaches with older businesses still relying on traditional methods. It’s impossible to keep it safe.
Therefore, blockchain for data management is starting to take the world by storm.
What exactly is Blockchain Technology?
Blockchains are a secure way of documenting transactions where these transactions get stored in chains across multiple computers. A blockchain begins with the gathering point, where data is collected. For example, when company has their data entry outsourced, then that data is placed into a block and processed further before being added to the chain. Data is then placed in secure ledgers and creates a bond with other computers. Since the data is stored across multiple devices, it’s essentially tamper-proof.
With that in mind, let’s dive into some of the best ways that we can use blockchain for data management.
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Blockchain Provides Higher Security
When a user performs any transaction within a blockchain, the network will have to go through several monitored specific tasks. These tasks are designed to ensure the validity of the transaction. The blockchain makes all other nodes aware of this transaction and will update them in real-time. If there is any abnormality, then all nodes are made aware, and extra steps are taken to prove the authenticity of the user.
High Data Quality through Blockchain Technology
In addition to the cryptographic technology discussed earlier, blockchains are also encoded to provide even more security. They will combine those cryptographic along with mathematics algorithms to verify transactions. This helps ensure that the data remains high quality. Since we have multiple nodes that are compared in real-time, if an entry is inaccurate then other nodes will pick up on it.
Furthermore, blockchain for data management also provides the ability for companies to easily access full, detailed audit trails.
Keeping Data More Secure and Guaranteeing its Quality
Databases that utilize blockchain technology provide a higher level of data security because it requires users to participate in its management and calculations. Let me explain.
In the traditional method, users who have the right permissions can make edits to any entries stored on the central server. This limits access to specific personnel. When a change is made to the master data copy, they are then distributed to other users as soon as they access the information. So, in this scenario, administrators can control the data while everyone else can access it.
When dealing with blockchains, every user plays a part in maintaining and calculating the data. Every computer serves as a node, and they are linked together in a way to double-check the accuracy of the data. So, data from all nodes is compared to make sure it’s the same. If an entry on one node doesn’t match up, then we know there is a problem and can act quickly.
Blockchain Technology Has a Big Impact on Industry Applications
Blockchain technology is always in a constant state of approval since it is seen as an essential aspect of the evolution of data. There are specific industries that are considered at “high risk” for error-ridden data. By using blockchain technology, individuals are better able to control the personal data as it’s entered into the blockchain.
- Healthcare: Healthcare providers are notorious for their inefficient handling of records, so this has been an area under extreme scrutiny. Blockchain for data management would ensure that all data is verified across multiple computers, ensuring accuracy.
- IT Businesses: Worldwide leaders like Google and IBM are investing in blockchain technology to improve security with ecommerce data.
- Food Industry: Blockchain technology is being picked up to help manage inventory related data. This is being initiated as an extra step in the data gathering processes (like barcode scanning) that are currently being used.
It’s Keeping Hackers at Bay
Blockchain technology utilizes top-level cryptographic technology to store software, ensuring that only authorized network nodes can read it. Both public and private keys are used, helping to ensure that data transactions are more secure. For instance, when an individual access their personal data, they use their public key and signature to negotiate with the blockchain. Then their request is approved assuming their key is authentic. This has made it more difficult for hackers to access personal information because they do not have access to this unique private key. Even if they can access the data, they have no way of decrypting it.
Blockchain Technology Solves KYC’s Challenges
KYC (know your customer) is a banking process that the financial industry uses to verify its customers’ identity. It ensures that they are not engaging in nefarious activities like money laundering and bribery. This entire process is always under a huge microscope and can be challenging.
However, Blockchain technology can address these challenges by ensuring that all data is of high quality. Once all the nodes verify that the data is authentic, then the new block is accepted. But any blocks that score low in quality will not be added.
In short, blockchains are always going to provide more accurate data because different nodes verify it. The chances of multiple nodes containing the same error are almost non-existent. Plus, it’s a much more affordable solution.
Blockchain for Data Management Has 4 Primary Benefits
- Security: Blockchains are highly secure since only authorized nodes are allowed access to them. Plus, a private key is required to decrypt this data.
- Faster: It’s much faster to access records in a blockchain than it is using traditional methods.
- Integrity: Transactions added to a chain cannot be edited. This makes them much more accurate.
- Traceability: The way blockchains are designed makes it easy to trace any problems, allowing businesses to quickly fix potential issues.