Will future cyber security systems rely on blockchain?
Data protection, especially in Europe, is a growing concern. Can blockchain help us to cope with the susceptibility of our connected networks? Will blockchain’s security and encryption features help us fight hackers? Some data specialists think so.
Blockchain has developed during a few short years into a ground-breaking technology with the potential to change a host of industries, including financial markets, energy, manufacturing and education. The impact may be felt soon in cyber security and data protection.
Blockchain technology keeps a chronological list of all historic transactions in sets of ‘blocks’. The records are spread out to the entire network, which prevents subsequent alterations in the records.
The creator of blockchain called himself Satoshi Nakamoto, but still we don’t know who he is – perhaps the name was used by a group of people. Nakamoto published a paper called "Bitcoin: A Peer-to-Peer Electronic Cash System" in October 2008, and anonymously created the Bitcointalk forum the following year, after having released the first version of Bitcoin software. The software was offered to the open source community – recording time-stamped data in a public space, where no single operator can remove any block. Was this the way to ensure digital trust?
Beyond digital currencies
Today, blockchain has moved beyond digital currencies. It is a technology on which one can build many other applications, something that was realized about five years after the creation of Bitcoin. Blockchain provides an efficient process that could potentially reduce the cost of transactions in many different areas.
A report from the non-profit tech association CompTIA, published in October of 2017, showed that 16% of companies surveyed had purchased blockchain-enabled tools. More than a fifth (22%) were investing in the development of blockchain tools. An additional 24% answered that they were exploring the technology.
Early adopters use blockchain for digital identity, asset management, compliance and auditing, smart contracts and payments. Blockchain has the potential to make an impact in many industries, including healthcare, transport, insurance, voting, logistics, auditing, classification, contract management and more. Already, large companies such as Walmart are using blockchain to track items in complex supply chains and improve food security systems. Nasdaq is starting to offer technology for processing and validating financial transactions. Banks are testing blockchain technology in trade finance, foreign exchange, cross-border settlement and securities.
Now is the time to find ways to use the technology in consumer products and services.
Advantages in cyber security
Blockchain’s advantages regarding cyber security revolve around its transparency. Using cryptography, it grants secure access to a distributed database and metadata. A blockchain doesn’t belong to a central authority, but is instead spread across multiple points. This makes hacking much more difficult. Previous instances of cryptocurrency hacking have involved the systems adjacent to the blockchain, not the blockchain itself.
Verifying transactions was the original task of blockchain. But in the spread-out database, it’s possible to code, digitize and insert many different types of documents. Verification happens with every transaction by the entire blockchain community. Every time a block of data is complete, a new block is generated. All of the blocks are connected to each other chronologically, hence the term ‘chain.’ If a hacker were to access the system and steal a component of data, tampering is not easy. The system will try to locate the ‘odd’ block, the one that is different from the others. When located, it is recognized as being false and is therefore excluded from the chain by the network.
Internet of Things – a data security challenge
The Internet of Things (IoT) is the network of devices, including cars, home appliances and other items, that rely on electronics, software and sensors, and are connected so they can gather information from the environment and exchange data. They come in a myriad of forms – small devices lodged within industrial equipment or gadgets used at home or in public by individuals. Their number is growing exponentially.
The number of IoT objects was estimated to be 8.4 billion in 2018, but is expected to reach 30 billion by 2020. Most of these devices have no security, are difficult to upgrade and are designed to automatically connect to the Internet or to other devices. Data storage for IoT is based on an inherently distributed client-server model that uses a central authority to manage the devices. This is a weakness. So is the fact that they usually have no direct user interface, no way to install security or anti-virus software, or a way to monitor the device. Firewalls, anti-malware, and many other traditional security solutions are inadequate.
Gartner predicts that by the end of 2020 more than a quarter of data attacks in businesses will involve IoT. Obviously, with that many devices and a large impact if a system is hacked, IoT data security is a growing concern.
Can blockchain deliver?
Perhaps blockchain storage can help? Not only is blockchain protected by advanced cryptography, it could also enable networks to automatically protect themselves through ‘group’ consensus. This can expand to attest to the quality of items. The blockchain network could quarantine any devices acting abnormally. Continuous deployment of software updates would be possible with blockchain.
By storing financial data across a wide network, compromising it becomes much more difficult for hackers. A fraudulent transaction on a blockchain is only possible if the majority of the network is compromised simultaneously. This becomes virtually impossible, when the network is large enough.
But blockchain is a complex technology, and this makes it difficult to predict the angles and methods of potential attacks. Hackers are getting ever more sophisticated, honing in on areas with increasing yields. Blockchain will not be a cure-all, but it could provide a more robust security than what we currently have.
What is blockchain?
Originally blockchain was invented as the accounting method for Bitcoin, the original virtual currency. Essentially, blockchain is a record – a digitized and decentralized public ledger of transactions – using distributed ledger technology (DLT). The technology depends on maintaining a chronological list of all historic transactions. Each recorded transaction is defined as a “block”. Once a block is set, it’s extremely difficult to change or delete. The records are kept on many separate computers, ensuring they cannot be altered retroactively unless the network goes along with it, with all computers managing the ledger altering all subsequent blocks.