Can Blockchain Technology Help With Data Privacy Issues?

(STL.News) Although the blockchain is still in its infancy, there are a lot of benefits for companies to implement the technology.  Namely privacy and security.

Servers are notoriously easy for hackers to break into and then steal users’ data like social security numbers and credit card information.  Cyber crimes are way up as hackers get more and more savvy.

This eventually is going to erode consumer trust and make it harder for companies to ask people for their information when they want to shop online or fill in forms.  Nobody wants to get to the point where people start looking to the competition because they offer better security.

Which is where the blockchain comes into play. In this article, we will go over how the technology behind things like cryptocurrencies are changing how companies handle data.

Unparalleled protection

When a bank takes your information for a transaction, it goes through multiple stages of processing.  While the transaction is being made, it is encrypted and is usually safe.  But, when the data is stored, it is on a server somewhere.  And this server is the weakest link on the chain.  If a hacker gets in, it doesn’t matter how secure the transaction is, they can get your information.

When a transaction happens on the blockchain after you’ve set up a bitcoin wallet, the ledger has to be encrypted and verified by miners who then get paid out in some cryptocurrency.  Because of this system, the transaction can’t be deleted or modified in any way or everybody on the blockchain will see it and that modification would need to be verified.

In other words, it can’t happen. It literally cannot be hacked.  So your data is protected at all times when the transaction is made.

Privacy is not protection

Where we could be placing too much faith in the blockchain is where it regards privacy.  Privacy and protection are two different things. How the data is stored and protected is 100% to do with blockchain and as you can see is quite strong.

Privacy has everything to do with the company that makes the transaction.  Suppose you buy from an ecommerce store that is using blockchain technology.  Sure, your transaction is there for all to see and can’t be changed.

If a company is tracking your internet use or using cookies, then your data is being collected by the company and that is something that has nothing to do with the blockchain.

Make sure to understand how your data is being used by the website before you trust them with a purchase.  You could have that follow you around when you browse other sites and used to target you for future advertising.

There still needs to be some coordination between the government and developers of the blockchain and websites in general to make sure that there is a standard on how data is collected, handled and stored to make sure that consumers can be 100% protected when they shop online.