Today, data breaches have become all too common. Based on the Varonis 2021 Data Risk Report, most businesses have poor cybersecurity practices and unprotected data, putting them at risk for cyberattacks and data loss.
Mitigating risks is no longer a luxury, with a single data breach costing a company an average of $3.86 million and eroding a firm's image and consumer trust.
However, as cyberattacks become more widespread and sophisticated, simply patching up traditional cybersecurity measures may not be sufficient to prevent future data breaches.
Instead, it is critical to look specifically for more advanced security solutions. As far as innovative solutions go, using blockchain to prevent data breaches may be our best bet.
The fundamentals of blockchain technology
Blockchain technology, also known as distributed ledger technology (DLT), is the result of decades of cryptographic and cybersecurity research and development. The term "blockchain" was popularised by cryptocurrency because it is the technology underlying record-keeping in the Bitcoin network.
Since it enables data to be recorded and distributed but not copied, this technology makes it extremely difficult to change or hack a system. It can be a promising solution for data breaches in any environment with high-security requirements because it provides a completely new method to securely store information.
A blockchain, which is based on the concept of peer-to-peer networks, is a public, digital ledger of stored data that is shared across an entire network of computer systems. Each block contains several transactions, and whenever a new transaction occurs, a record of that transaction is added to the ledger of every network participant.
Its strong encryption, decentralized and immutable nature and decentralized and immutable nature could be the answer to preventing data breaches.
Tim Berners-Lee, the inventor of the World Wide Web, recently stated that "we've lost control of our personal data." Companies store massive amounts of personally identifiable information (PII), such as usernames, passwords, payment details, and even social security numbers, as demonstrated by Domino's data leak in India (among others).
While almost always encrypted, this data is never as secure as it would be in a blockchain. Blockchain can finally put an end to data breaches by utilizing the best aspects of cryptography.
How is a shared ledger more secure than traditional encryption methods?
Blockchain uses two types of cryptographic algorithms to safeguard stored data: hash functions and asymmetric-key algorithms. This way, the data can only be shared with the member's permission, and they can also specify how the recipient of their data can use the data and the time frame within which the recipient is permitted to do so.
Asymmetric Encryption
Asymmetric encryption, also known as public-key cryptography, uses two keys to encrypt plain text: a private key generated by a random number algorithm and a public key. The public key is freely available and can be transferred via unsecured channels.
The private key, on the other hand, is kept secret so that only the user knows it. It is nearly impossible to access the data without it. It functions as a digital signature, similar to physical signatures.
In this way, blockchain empowers individual consumers to manage their own data and choose who they share it with via cryptographically encoded networks.
Hash functions
When a chain's first transaction occurs, the blockchain's code assigns it a unique hash value. As more transactions occur, their hash values are hashed and encoded into a Merkle tree, resulting in the formation of a block. Every block is assigned a unique hash that is encoded with the hash of the previous block's header and timestamp.
This creates a link between the two blocks, which becomes the chain's first link. Because this link is created with unique information from each block, the two are inextricably linked.
Immutability
Blockchains, in addition to being decentralized, are also designed to be immutable, which increases data integrity. Because blockchains are immutable, all data stored on them is nearly impossible to alter.
Because each member of the network has access to a copy of the distributed ledger, any corruption in a member's ledger is automatically rejected by the rest of the network members. As a result, any change or alteration to the block data will cause inconsistency and break the blockchain, rendering it invalid.
Despite the fact that blockchain technology has been around since 2009, it has a lot of unrealized potential in the field of cybersecurity, particularly in terms of preventing data breaches. Blockchain protocols use top-tier cryptography to ensure the security of all data stored in the ledger, making it a promising solution.
Since nodes running the blockchain must always check the legitimacy of any transaction before it is executed, cybercriminals are almost always stopped in their tracks before gaining access to any private data.
