Advantages of Blockchain: connection of discrete data blocks for security and privacy

It is in this context that the blockchain promises to offer a safer and more reliable alternative.

By Doug J Galen

HOW IT IS EVIDENT from a series of recent high-profile hacks on some of the world's largest and "busiest" companies including Facebook, Target and Equifax, the ease the Internet has allowed is becoming more and more of a concern . Its fundamental openness that has facilitated successful value transactions between strangers – a fundamental quality for the business – is being questioned daily by increasingly sophisticated cyber attacks that expose the multiple vulnerabilities of the Internet.

It is in this context that the blockchain promises to offer a safer and more reliable alternative. This is because as a public and secure "register" of digital transactions, it allows users to demonstrate their identity, protect the ownership of digital assets and verify transactions without a high-cost intermediary. Unlike its predecessor, the public internet, which acts in many ways as a giant photocopier, the blockchain works by organizing transactions into "blocks" of discrete data that are then organized into infallible chains that connect to other similar blocks. (of data). These links let you see when changes are made to any part of the chain, helping the system as a whole to prevent and flag bad transactions.
This is why I would say that blockchain promises to do the one thing that individuals and companies are increasingly looking for when they choose to start a transaction, either with another individual or company, to be able to count on privacy and privacy of their interaction. This is because blockchain is designed not only to allow a sense of trust in the sanctity and immutability of interpersonal or inter-company exchanges, but also to ensure safety in the wake of multiple attacks on companies that have built their presence and customer base, largely part online.

The way in which the blockchain creates trust consists in effectively answering three fundamental questions that are at the center of reliability: who is who? Who owns what? What's true? It deals with the first of these by providing digital signatures to establish identity, the latter offering tamper-proof records to establish ownership and the third allowing transaction verification to establish truthfulness. As a result, anyone who distributes blockchain acquires three key values: transparency, tamper-proof data records, reduced counterpart risks, and efficient provision of digital identities.

In a study I conducted on Blockchain for Social Impact I found that the transparency of this registry-based architecture has the potential to accurately track the traces of money even in the field of aid distribution. For example, the United Nations World Food Program (WFP) used the blockchain for aid distribution in Jordan to pay sellers, facilitate money transfers for over 10,000 Syrian refugees and expenditure for audit beneficiaries. In the same initial pilot project, the costs of bank transfer fees have been reduced by up to 98%! This ability to track traces of money also makes blockchain of great value for any transaction involving payments. Users can easily see where they have reached their money, the hands it has, however, and rest assured when they arrive at their intended destination.

In the same way, the immutability of blockchain offers itself for a potential impact in different areas such as voter registration, registration of land titles and optimization of the health supply chain. In each of these domains, what blockchain does is provide tamper-proof data for a good prediction of voter turnout (which can have a crucial impact on electoral projections), the veracity of private property (in real estate arena) and optimal and economic functioning of healthcare companies (in the health sector). When used in the context of payments and money transfers, we found that the main primary advantages of blockchain were its ability to reduce risk and fraud in every possible business environment and improve efficiency. But more than anything else, blockchain is demonstrating the proven ability to restore trust in transactions.

The writer is a teacher a Stanford Graduate School of Business