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Is Blockchain Secure Enough to Protect Data and Support Cryptocurrency?

The rise of cyber crime doesn't leave much need to debate whether additional layers of security are needed, but is blockchain really the definitive answer to data and fintech security? This hot topic is debated throughout the dark web and boardrooms alike. With hundreds of billions of dollars being stored in cryptocurrency, coupled with ongoing volatility and impending government, regulation, it's unlikely that the debate will be ended anytime soon. Thus far, hackers have been largely unable to poke holes in the blockchain concept of repetitive data storage, but some analysts believe that it's only a matter of time until someone solves the puzzle. Moving your secure data to a protected cloud is a solid first step that addresses the concerns of many organizations.

Blockchain 101

In its most basic form, blockchain is the essence of simplicity and was created in 2009 to record financial transactions between two individuals without the need for third-party verification. This technology allows users to create a secure and tamper-proof log of activity that contains sensitive data or financial information -- everything from transfers of international funds to shareholder records. Blockchain tech is also used to protect sensitive data such as PII, or Personally Identifiable Information. Proponents argue that blockchain reduces the overall costs associated with online transactions while improving both security and legitimacy.

Current Limitations

While many business and tech professionals alike get excited about the seemingly-unlimited possibilities available with blockchain technology, there are some real life limitations and challenges that need to be addressed. There are pockets of positive activity around blockchain for cryptocurrency and fintech, but scaling it for use in the broader business world has slowed adoption a great deal. Some of the difficulties include:

  • Adoption of the technology by all parties to a transaction
  • Defining an entirely new ecosystem, including the initial currency, transaction validation and maintenance
  • Scalability: each entry is authenticated and recorded by each participant slowing transaction times
  • Lack of governance and overarching standards
  • Privacy, and the illusion of anonymity that is only valid until your online pseudonym is linked to an individual

Why Blockchain is Secure

This information is stored in hash functions with timestamps, saved in a series of blocks. Data in these blocks together make up the blockchain, and individual blocks of data cannot be overwritten. Data is secure because manipulation of these data blocks is extremely impractical, reducing the opportunity for cybercriminals to adjust, delete or add data to the centralized location. Blockchain is considered so secure because each change to the database is immediately sent to all users, similar to a massively-shared Google Doc. Even if one or many of the databases are compromised, it's practically impossible to impact all users at the same time.

Blockchain for Data Security

Private analysis by Pentagon sources note that blockchain may be useful for more than simply recording financial transactions, and that it may be the answer to cybersecurity concerns for all types of data -- virtually eliminating mega hacks, data tampering and other illegal hijackings of government satellites, aircraft or vehicles. The same things that make blockchain an exceptional choice for financial transactions and personal information are what makes it difficult for use as a primary data security methodology. Cloud security solutions such as CoreArmor address these shortcomings by providing a holistic approach to the challenges around log management and cybersecurity management, while addressing regulatory and compliance issues that blockchain technology simply isn't mature enough to answer at this time.

See how Coretelligent harnesses the power of IT to provide your organization with the seamless security and ease of use needed in today's fast-paced business world. Our white-glove service ensures that your organization has access to the support that you need anytime -- day or night. Contact our professionals today by calling toll free 1-855-841-5888 or fill out our online contact form to learn more.

Is Blockchain Secure Enough to Protect Data and Support Cryptocurrency?