Blockchain technology has become increasingly popular over the past decade. Many people associate the term with cryptocurrency, such as Bitcoin, which uses blockchain to record transactions without the need for a central authority.
However, the uses for blockchain technology are far reaching and include increased security and fraud prevention measures for financial institutions and private companies. Using blockchain, businesses with sensitive data can easily share, view, and store information with the highest level of security.
While the term may sound futuristic and intimidating, the concept behind blockchain is relatively simple. Here is what businesses should know about blockchain and how it can be used to secure company data.
First, what is blockchain?
At its core, blockchain is simply a digital ledger of transactions. While traditional databases are centralized, and therefore more vulnerable to hacking and fraud, blockchain is a distributed database which instantly shares information electronically on a network. Each transaction is recorded as an irreversible block that connects to the blocks before it and after it, which prevents it from being altered. This guarantees the security of each record.
How can companies utilize blockchain technology?
Blockchain technology can store vast amounts of data without compromising confidentiality or integrity. This makes it useful for both internal company processes and external transactions with clients or customers. One important use of blockchain is for identity management. When employees or customers use digital IDs or biometric information to access data, blockchain can store this personal information securely, preventing fraud and identity theft.
How does blockchain improve cybersecurity?
The blockchain creates an immutable record of all changes to any data within it. The original data cannot be altered; any new changes or additions must be added as a fresh block to the chain. Because of this, blockchain is able to store personal information securely and prevent anyone from tampering with the original data. For companies that wish to utilize identity verification and identity management systems, incorporating blockchain technology reduces the risk of identity theft and cybersecurity attacks.
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