Data security is on the minds of many business owners, especially in light of the multiple breaches in January 2018 alone. These breaches are not limited to retail outlets but have crossed a variety of industries, including health insurance and credit reports.
In light of these breaches, it’s fair to ask if blockchain could be the answer to addressing these security breaches. First, what is blockchain and how can it have an impact on cybersecurity for your business?
Blockchain is a kind of secure ledger technology structured with blocks with many different applications from data and application security to communications. It allows for enhanced and reliable security for data, particularly the ownership of data. Each transaction is digitally signed to ensure its authenticity and that no one tampers with it. The best part is that these digital ledgers are distributed among an infrastructure, essentially creating multiple copies of the ledger.
A new transaction or edit to an existing transaction must have a consensus to be added to the ledger. Without that consensus, it’s rejected and no new block is added. The distributed consensus allows blockchain to run without a central unifying authority determining which transactions are valid and which are not.
Now that you have an overview of how blockchain works, let’s look at how it can impact cybersecurity in several areas.
The insurance industry is struggling as it deals with siloed information and outdated-IT infrastructures. It ‘s estimated that $45 billion is lost annually to insurance fraud. What is even worse is that approximately 65% of that fraud is never even detected.
A contributing factor to this undetected fraud is the fact that data is kept in silos, making it difficult to do the type of analysis necessary for fraud detection. There is no systematic view of transactions or a complete historical record of a customer so it can be difficult to find the duplicate transactions or detect suspicious activity.
How can blockchain help? First, it creates a ledger of a customer that is complete and includes consensus data from the infrastructure of a unified platform instead of just keeping it in a silo. An analysis is easier this way and more fraud could potentially be detected. Secondly, it can eliminate those inefficiencies that make insurance administrative costs go up along the insurance value chain.
The key to the effectiveness of blockchain is the fact that there is no central database to hack. Instead, blockchain provides the ability to digitize, decentralize, and secure the validation of transactions. While the blockchain is public since it resides on the network, the data is encrypted using an encryption involving public and private keys, similar to the two-key system of safety deposit boxes at local banks.
For companies considering the benefits of blockchain, the ability to give their data an additional layer of security while minimizing the risks associated with protecting a single database can be attractive to industries and businesses alike.
The transparency of blockchain and the fact that it’s extremely difficult to make a change to a blockchain without being detected makes it appealing to financial services and other industries that deal in secure data from customers and suppliers.
An Answer to Secure the Internet of Things
Many devices used in the home, from cameras to lightbulbs, come with little security and few options to have their security systems updated. As a result, these devices can easily be hacked. Blockchain could be the option to secure these internet-connected devices’ security.
Instead of creating their own security update infrastructure, smaller companies can program their products to check in with a blockchain system for software updates. While it’s not yet fully developed, it’s clear that blockchain could be the future of security in the world of IoT devices.
Although blockchain is still in the early stages of being adapted to various industries, the technology clearly could be beneficial to those in cybersecurity for a variety of reasons. Data changes that need to be verified by a majority of users makes it difficult to hide unauthorized breaches. At the same time, making multiple copies of ledgers gives companies the ability to verify the accuracy of the data across time.
What Security Needs Does Your Business Require?
Do you see blockchain impacting the security of your industry in the future? While it might still be the future of security, we can discuss your cybersecurity needs today and offer you options to fit your business. Contact us for an evaluation of your company’s security needs.
Sagacent Technologies offers technology management and support, including proactive/preventative maintenance, onsite and offsite data back-ups, network and security audits, mobility solutions, disaster planning and emergency business resumption services. The company serves clients of 10 to 150 employees within the Silicon Valley region.