First defined as a revolutionary solution for payments and trades, blockchain has always been about data. The ways the technology can handle large data volumes are still impressive.
Yet, most of the time, we read only speculations and predictions about how blockchain will change data management. Though depicting a bright picture, they don’t have any supporting examples to prove the point. We don’t know, or know very little, how blockchain’s power in data management is used already.
Time to draw the curtain and break down the cases that demonstrate how these promises turn into action.
Blockchain Innovates Data Management
No more spreadsheets
Spreadsheets seem like an omnipresent nuisance, crammed full of numbers that must be managed and audited practically ongoing. And here comes the critical point: since the access to the documents isn’t adequately controlled, in most cases, it’s impossible to trace changes back to the user who made them.
On the other hand, blockchain records each event or file entry and distributes these records among the authorized users. Every change is transparent and is verified by multiple parties that define its validity through consensus.
A Centralized Database
How many times you had to deal with poor-quality data scattered across variegated silos? Large databases that accumulate data from multiple sources inevitably lack the consistency in that quality. More, legacy systems may be incompatible with new elements, which also affects the condition of data.
Blockchain turns that tide by providing a single data source for all the data, with the same copy of records distributed among all network members. Due to that, users could access any file they need fast and seamless, with no concerns about its quality — sure, that will constantly be on the high level.
Digitized Proofs of Ownership
Whatever industry you operate in, transferring of assets — whether money or property — is a long, grueling process, with multiple interactions of transaction histories ending up in endless paper trails. Luckily, blockchain is here to save the day; a digital database storing proofs of ownership on a blockchain register could eliminate all paperwork.
The Swedish government already works on a mobile app for real estate where parties could access and data on properties and trace transactions when making deals. The functionality should make communications faster and cut processing times from months to days, depending on each case. Who knows, maybe at some point, we would talk about a matter of hours?
Plus, digitized data processing could cut operational costs for governments, including administrative fees. Saved funds, in turn, could be distributed among citizens.
Finally, this is transparency. Property rights could be handled more securely, as users would track that data only upon authorization.
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Both public and private blockchains are distributed, encrypted ledgers, monitored and verified by their users. But the technical level is where comes the fundamental difference between them.
New Financial Databases
Blockchain is a distributed, decentralized system where the communication between nodes is settled as “peer-to-peer.” Everyone has the same rights, there is no authority or privileges. Every decision is made through majority consensus.
This collective and balanced management can change the whole concept of finance relations. Essentially, blockchain establishes the credibility of transactions. It shows the real-time picture of the data and keeps records of all entries, presenting users with an unbiased history of interactions. History logs are backed by cryptographic authentication and time stamps of included transaction blocks so that there would be no doubts in the credibility of the financial data.
Robust Protection of Public Data
Many remember the disastrous hacker attack on the U.S. government database of 2015, when fraudsters managed to access confidential data, like SSNs, employment and transaction histories, even fingerprints. The multi-step encryption couldn’t save the day, however, with blockchain, you can at least rely on better security.
At the time, the Estonian government was concerned with that issue and introduced Keyless Signature Infrastructure (KSI) to protect public data. Through hash values, KSI changes data representation to a concise numeric format. Hashes are stored on a blockchain and serve as record identifiers. Only nodes in the private network — members who access it from government computers, can see that data.
When any of the files is changed, the blockchain “accepts” a new hash value that can’t be changed. Record histories are fully transparent, and any outside forgery attempts are spotted immediately.
Overall, with KSI, government reps can track changes across databases: who made a change, to which record, what changes were made, and when. Estonian healthcare already implements KSI in its daily operations with citizens’ electronic health records, while other sectors either only begin to adopt or yet consider that idea.
No doubt, blockchain forever changed the way data is handled across organizations. With new developments may come new challenges, since blockchain rests undiscovered in many aspects. More blockchain-conditioned innovations and introductions are yet to follow, and we will keep a close eye on these, providing you with timely insight.
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