The search for solutions that use blockchain for data security is among the priorities of many companies, especially in the financial market. After all, the advancement of the internet combined with the frequent use of cloud computing has increased the mobility of access to corporate systems.
Thus, along with the optimization of time and ease of access to information, there was also concern about data security. Therefore, many managers already see blockchain as a technology with great potential to reinforce data protection in corporate systems.
Follow this article and understand more about the importance and different ways of applying blockchain in information security.
Blockchain And Data Security: Understand Its Importance
Blockchain consists of a database composed of blocks that are interconnected in a decentralized way, forming a chain that protects information.
Through this technology, it is possible to include a layer of encryption that makes tampering with data on the network difficult. And it makes transactions much more secure, as this solution improves protection and traceability in various transactions.
This happens because, on the blockchain, each new block arises based on the shared precision of the previous block.
Therefore, if a hacker tries to invade the company’s operating system and edit data, he will have to do this not only in one block but in all previous blocks, making it difficult to access the organization’s important data.
In addition, blockchain is a technology that enables other ways to circumvent problems related to data privacy. Decentralized Digital Identity, or IDD, is one of them.
This structure allows storing, validating, and accessing electronic data in a much more controlled and secure way. For people, the IDD guarantees more autonomy and transparency about their information. As for organizations, this framework speeds up electronic data analysis, improves information audits, and reduces interaction risk.
Blockchain Evolution In The Financial Market
Blockchain is a recent technology that emerged in the mid-2000s but only became popular in 2008. Since then, this innovation has been revolutionizing the world, especially the financial market.
It works as a disruptive tool organized into blocks of information, facilitating transactions and storing data in an incorruptible and encrypted way. And it is exactly this functioning of the blockchain that guarantees more security and reliability to its operational network.
This tool allows for decentralizing information, simplifying data sharing, and reducing process costs, bringing more agility, security, and transparency to financial transactions. All these attributes have been decisive for the evolution of blockchain in the national and international financial markets.
Main Applications
Initially, this technology was developed to authenticate financial transactions. That is, its main application was in the validation of online processes. Nowadays, several forms of blockchain application in the financial market already go beyond transactions. Among the main ones are:
- Issuance of securities, settlement, maintenance, and management of assets in capital markets;
- Launching and management of financial funds;
- Making payments and remittances;
- Credit forecasting and scoring, as well as arranging, underwriting, and disbursing bank loans;
- In commercial financing processes;
- In the processing and disbursement of claims in the insurance market.
Blockchain Applications For Data Security
Now you understand the importance of the relationship between blockchain and data security. But a common question when discussing this technology is where it could be applied to reinforce data protection and operations security.
In this sense, the blockchain can be used in different ways. Document management and creating smart contracts are one of them.
With this technology, in addition to greater security for all the information in the documents, it is also possible to make contracts self-executing whenever the necessary conditions are met, thus reducing bureaucracy in various processes.
In addition, companies can also apply blockchain:
- In cloud storage, increasing information security and reducing costs through its “peer to peer” network;
- In resolving security incidents related to software vulnerability or unsafe authentication, for example;
- In human interactions, that corresponds to an area with many vulnerabilities, such as the use of easy-to-break passwords, social engineering, or behaviors aimed at more user experience than security, for example. Factors such as these can generate entry points for potential intruders.
Therefore, the blockchain can significantly reinforce security in different transactions, especially financial transactions. With that, deploying capable systems that can unite blockchain and data security is undoubtedly not an option but a necessity these days!
Also Read: What Is A Blockchain & Its Advantages, Disadvantages?
