Blockchain and Data Security: What are The Benefits?

Blockchain technology, one of the most secure data protection technologies, can be a reliable tool that can eliminate data security problems caused by rapid developments in the digital world. Almost all organizations need to securely store all data of users and customers by creating a key vault in the form of strong authentication and cryptography. Blockchain technology, which is preferred by people who want to secure their data and be protected from malicious cyberattacks, addresses all the challenges and promises its users very secure storage.

The increasing cyber-attacks and the ever-evolving data theft system, along with the popularity of blockchain technology, lead to more work by companies working in the field of blockchain that has set the goal of developing blockchains. Blockchain companies are discussing security concerns about blockchain and discussing what causes these concerns and how they can be resolved. 

KEY TAKEAWAYS

• The most important advantages offered by Blockchain technology can be listed as increased security, greater transparency of transactions, increased efficiency and speed, instant traceability of transactions, and automation.
• The reasons for using blockchain networks for data security are that data is stored and processed securely, data transfers are secure, there is no point of failure, data is transparent and traceable, users are confidential, and customers’ trust is increased.
• The best areas where you can use blockchain technology and ensure data security are the finance industry, healthcare, real estate, and supply chain.

What Does Blockchain Mean in Its Shortest Form?

Blockchain, which contains all transactions and data related to these transactions carried out in a peer-to-peer network, is an account book that is not connected to any center and cannot be controlled by any institution or person. All transactions that take place in peer-to-peer networks are recorded on blockchain blocks over time, and all recorded blocks are organized into chains in addition to being cryptographically secured. Transactions in all blocks with backlinks and the data owned by the transactions cannot be changed in any way. Since transactions on blockchains are immutable, meaning they have time-record of their own, so they cannot be manipulated or changed, it is possible to rely on them, which offers the security of data on the entire chain. It can be easily stated that blockchain technology is transparent, as users in the blockchain network can see all transactions made on the blockchain. 

What is the Security of Blockchain Technology Based on?

Blockchain technology, which by its nature can be distributed in many areas and reproduced more than once, is based on the consensus of the participants in the network and increases security by using the latest developments in the field of cryptography. It is considered to be highly resistant to cyber-attacks thanks to data storage protection technologies and different consensus mechanisms.

Now, let’s take a look at the privacy, data integrity, and usability features, which are the foundations of the security of blockchain technology.

What Are The Most Important Blockchain Advantages?

The most important advantages offered by blockchain technology can be listed as increased security, greater transparency of transactions, increased efficiency and speed, instant traceability of transactions, and automation.

Increases your security

Since all your data is very sensitive and important, it is your natural right to ask for your data to be kept confidential. Blockchain technology, on the other hand, can change the way in which all your critical information that you do not want to be shared with others or that you want to remain confidential is displayed, so it becomes possible to increase the security of your data thanks to this technology. As all data recorded on blockchains is recorded in blocks, and before a certain block is changed, the previous one’s hash load must be changed, which is not possible, it is not possible to change the data. 

Blockchains create an end-to-end encrypted record, and thanks to this record, you can prevent frauds made over the internet and prevent unauthorized activities. 

• You can solve privacy issues by anonymizing your personal data and using permissions to restrict the users who have access. 
• Also, since all data recorded on blockchains is stored on a branched computer network rather than just on a single server, it is harder than ever for hackers to access your data, making it impossible for people to access your information without permission.

Enables achieving greater transparency

If you own an organization or company and do not use blockchain technology, you will need to keep a separate database from other companies, but if you use blockchain technology, your transactions and data will not be recorded in a single database, but in more than one place with the same information. 

Wondering what we mean by saying ‘’being recorded in more than one place’’? Well, here is the thing: We can easily say that blockchain networks provide complete transparency, as users who have access permission to log in to the blockchain network will see the same information at the same time. In addition to the fact that all transactions recorded on blockchains are immutable, all documents are time and date-stamped. That’s how it becomes possible for people with access permission to examine how the transaction progresses from beginning to end, thus eliminating the risk of fraud almost completely.

Monitors transactions instantly

Each step of the blocks in the blockchain network has an audit trail that is tasked with documenting the origin of a particular asset. 

It is natural for consumers to be concerned about environmental or human rights issues that may arise in the case of purchasing a product or selling products produced by manufacturers, people who do not want to deal with fraud and do not want to face the danger of fraud can benefit from blockchain technology. Because blockchain technology records transactions and each transaction has an audit trail, it becomes easier for producers and consumers to have proof. 

In cases where consumers or customers are worried about data on any subject, data that cannot be rearranged using blockchain technology can be presented to customers or consumers in its pure form, thereby gaining people’s trust. Thanks to this traceability feature of blockchain technology, if any product is in the supply chain, the order process of the products can be examined and the weaknesses in the supply process can be identified and problems can be eliminated.

Increases both efficiency and speed

Traditional processes, which are done on paper and require intermediaries, are time-consuming and are likely to be full of human errors, and since these transactions require third parties, there will be a decrease in speed and you will have to pay for transactions. If you do the transactions you would do with traditional processes by switching to the blockchain network, your transactions will be faster, more efficient, and human error-free. 

Since there is no need for papers that store transactions in writing, you can store your documents on a blockchain network without wasting any paper and access your documents whenever you want. In addition, since you can quickly access the documents you have saved on the blockchain network, your swaps and stop transactions will be faster than you think.

Provides automation option for transactions

The use of smart contracts is essential for transactions in blockchain networks to take place, smart contracts increase your efficiency and make the process of transactions you want to perform very fast. 

When the predetermined conditions in smart contracts are met by both parties, the process in the smart contract moves to the next step, and the operation of the transactions in the smart contracts in a certain order allows the automation of the transactions. Since there is no need to trust any human in order for smart contracts without human intervention to occur and transactions to take place, third parties have no business in smart contracts.

What Does Data Security Mean and Why Is It Important?

Data security, which helps to protect your digital data from unauthorized people and the dangers of corruption due to hardware problems, contributes to the protection of all your data from theft. In addition, it provides physical security to both hardware and software devices and covers every aspect of information security. It is also known for providing logical security to data security, which gives management permission to some software applications and also helps these applications access data. It should be noted that data security includes the policies to be followed by any company and the procedures to be followed against possible dangers.

Data that are important to any company or person are very valuable assets that can be produced, obtained, recorded, and shared with other institutions or individuals to protect some information. Protecting your data from internal corruption or illegal access prevents your company from dealing with financial losses. In addition, your company’s reputation will not be damaged, your consumers’ trust will not be damaged, and you will prevent your brand from being eroded.

Why Use Blockchain Technology for Data Security?

The reasons for using blockchain networks for data security are that data is stored and processed securely, data transfers are secure, there is no point of failure, data is transparent and traceable, users are confidential, and customers’ trust is increased.

The Best Areas Where Blockchain Technology Can Be Used For Data Security

The best areas where you can use blockchain technology and ensure data security are the finance industry, healthcare, real estate, and supply chain.

Finance Sector and Blockchain Technology

The biggest reason for the use of blockchain networks in the financial sector is that the transactions taking place in banks or financial institutions are extremely transparent and the recorded data is immutable. 

Storing transactions on a blockchain network traditionally makes more sense than storing them digitally or on paper, because if blockchain networks are hacked, data cannot be lost and can be viewed by network participants. 

• If you are wondering whether blockchain technology is used by banking institutions, we can say that organizations such as ING Group have already started to benefit from blockchain technology. These banking institutions use blockchain technology to keep customers’ information confidential. 
• In addition, the Q2 platform, which is a completely virtual banking platform and does not have any physical institution, aims to protect users’ data by making use of blockchain networks and machine learning. 

Since smart contracts in blockchain networks automatically perform transactions when the contract conditions are met, transactions can be concluded more easily and quickly. The most popular examples of smart contracts are pledge agreements and deposit agreements.

Healthcare and Blockchain Technology

Blockchain technology, which is used to securely store data in health institutions as well as in the finance and banking sector, and to quickly transfer data between participants, is also frequently used in the health sector. 

• BurstIQ, which is a platform that allows healthcare institutions to store patient data securely and without loss, allows healthcare institutions to share data with each other or between departments within a healthcare institution. 

The blockchain technology used in the health sector can help patients who are not in an emergency to communicate with health institutions quickly and securely, as well as contribute to the storage of data by health institutions.

Real Estate and Blockchain Technology

Today, the real estate industry also benefits from blockchain technology. There are two different reasons for using blockchain technology in the real estate industry. 

• The first of these reasons is to store the data securely and still be able to access the data in case of an attack, while the other reason is to verify the owner of a place and to perform all transactions during the transfer of funds automatically and securely. 
• Since the blockchain network cannot undergo any change, the information stored in blockchain networks cannot change, so there is no question of who owns a property and how the payment history is made. 

Famous companies in the real estate industry such as SMARTRealy and Propy also use smart contracts to buy, sell or rent some properties. By making transactions between multiple parties faster, smart contracts contribute to the automation of all transactions, in addition to providing secure payment and data transfer.

Supply Chain and Blockchain Technology

Giant companies such as Walmart, BMW, and FedEx, which are famous worldwide and famous for their product sales, have already started to take advantage of blockchain networks. 

The two biggest reasons these companies benefit from blockchain networks are that they make data security is more robust and they improve operational transparency. If a company or institution dealing with product sourcing wants the supply chain to run efficiently and operations can be easily analyzed, blockchain networks can be leveraged. Since data in blockchain networks is immutable, all transactions and shipping data will be tamper-proof. It is also a known fact that blockchain platforms and networks can also be used to verify the identity of owned assets.