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The Safety of Blockchain

The Safety of Blockchain

Last updated 30th Nov 2022

Photo credit: Pierre Borthiry

Technology is certainly changing the world daily and on an exponential scale. With that comes great opportunities but also the need to stay in the know. One of the technologies many are currently wrestling with the last few years is blockchain.

Understanding Cryptocurrency

Before we talk about the safety of crypto/blockchain, let’s state what we’re talking about because many people are still very much out of the loop. Cryptocurrency is digital money/assets that are mostly not backed by a ‘hard’ currency like gold (like paper money is). It can be bought and traded like most stocks, too.

Blockchain, or blockchain technology, might best be visualized as a digital bank. This isn’t too hard to imagine since many of us do not deposit actual paper/coin into our accounts on payday. We get a check that represents a cash amount. Blockchain is a step further because it is a digital bank for digital money. Hopefully that all made sense!

Is It Safe To Trust Blockchain Technology?

The short answer is “yes” if you are to believe experts. Even the government’s intelligence community believes blockchain technology is secure and could even hold the key to cybersecurity.

Blockchain, if we continue with the digital bank metaphor, is supported by many servers and databases that secure the information in a redundant fashion. So, even if someone gets hacked, the original account information will be protected. That’s the power of redundancy in the digital world.

There are many financial institutions that have used blockchain technology to streamline their efforts and they do so without risking the security of their transactions. The odds are that you have personally benefited from blockchain technologies and didn’t even know it. That’s how comfortable corporate America is with blockchain.

How Blockchain Intersects With Security

The economic world is beginning to utilize blockchain to tackle problems regarding digital transactions related to double spending, data breaches, chargebacks, fraud, and other areas. In theory, the cost to address these concerns will be much lower by utilizing blockchain (less manpower).

Data hacks and identity manipulation might be the biggest area that blockchain assists. Given the number of security breaches we’ve seen in the last two decades, this would be welcomed by a society more and more tied to online activity.

And this may sound counter-intuitive, but because blockchain operates on a public key system built on redundancy, passwords could become a thing of the past. With blockchain, hacking and manipulating someone’s records would be increasingly difficult because the information is reinforced by countless databases that cannot be easily changed as a whole.

Blockchain and Business Transactions

Blockchain is being addressed as a resolution for the future of contracts (smart contracts). This would apply to property and anything else of value while cutting out the need for industry go-betweens between consumers.

This kind of innovation could have big effects on health care, politics (digital voting), litigious matters, etc. One misnomer is that blockchain is limited to financial institutions. The truth is that blockchain is something that can be utilized in nearly every industry where any type of transaction occurs.

With more people across the globe beginning to utilize crypto and blockchain, the future of that will depend on the stability and security of unforeseen challenges. As of yet, experts are only enthusiastic about the safety of blockchain and the potential for it to safely provide an innovative and creative evolutionary jump for all of us.

News Desk

News Desk

The latest news, comment and analysis from our crypto news desk.