How does Blockchain Enable Data Privacy to Support Cybersecurity?

15.5% of the global GDP accounts for the digital economy. No wonder adoption of digital technologies across industry verticals has fetched hefty turnovers.

However, digitization makes businesses susceptible to cyber-attacks and data breaches at damaging levels.

Big or small, irrespective of the size of a reputed business; a cyber-attack can be a huge downfall, compromising the Brand value of the victim company.

Cyber-crime activities cost 1% of the global GDP. On average, the worth of global cyber-crime activities is USD 6 trillion per year. And it is estimated to reach USD 10.5 trillion annually by 2025.

What is a Blockchain?

Blockchain is a decentralized electronic ledger that can be uniformly shared across a network. In a blockchain, each block contains an electronic record of the transacted data and its timestamp. These blocks are linked together into a continuous chain, using cryptography. And each block has its unique cryptic hash. The blockchain once created can neither be altered nor deleted

Initially, blockchain was attached to the notion of cryptocurrency. However, Blockchain has evolved as a promising technology to support cybersecurity.

Backing it up with stats and facts:

Fact: A reputed retail company lost USD 62 billion being a victim of a cyber-attack. However, by showing blockchain receipt proofs provided by the manufacturers, the company saved some millions.

Stats: According to a survey conducted in 2021, more than 50% of respondents consider blockchain technology to potentially reduce fraudulent activities by authenticating the customer billing system.

How blockchains are secured by designs:

Blockchains are structured to provide decentralized distributed ledgers. This eradicates the necessity of depending on a single central organization to verify transactions. Also, it eliminates third-party involvement. The decentralized structure of blockchains helps to eliminate single-point failures.

Though blockchains are uniformly distributed across the network, they vary in type of participants, type of transaction processes, permissions, sizes, and roles.

Key security qualities reinforcing the structure of blockchains are:

·         Cryptography key pair

·         Immutable records and smart contracts

·         Identity and access controls

·         Uniformly distributed ledger

·         Transparency and traceability of transactions

·         Decentralized, software-mediated consensus

·         No requirement for third-party verifications.

These features enable blockchains to maintain privacy, protect data integrity, identify & verify access controls, as well as authenticate transaction records.

Practicing a use-case-based approach to blockchain for cybersecurity:

To protect data integrity:

Blockchains once created can neither be altered nor deleted. This unalterable structure of blockchains offers paramount security because verification of the transacted data necessitates consensus. Also, end-to-end encryption protects data during the transmission process. Blockchains can be used to secure decentralized voting, decentralized metadata, integration of health & science across institutions, and others.

To secure software downloads:

The cryptographic hashes are recorded in the blockchain. These hashes can be used to compare new software identities and verify the authenticity of software downloads. Blockchains can be used to verify installers, updates, and applications, and block malicious software downloads that infect the device.

Transparency and traceability:

In a supply chain of the product’s lifecycle, blockchains can be used to build robust security across the network. This is possible because of its transparent and traceable design structure.

The data (not necessarily monitory data. The data can be of any nature depending on the context of the supply chain,) is digitally recorded and uniformly distributed across the network. This eliminates the risk of data tampering, data modifications, or data counterfeiting by a single party. So there arises no need to hire a central broker. Blockchains can also be used to secure transactions and cross-border payments.

Identity Protection, authentication, and access controls:

Blockchains can be used to replace sensitive data (like any private identifiable information) of the users with cryptographic hashes, making the private information unidentifiable or selectively disclosed with the zero-knowledge proof protocol.

Blockchains can be used to prevent identity theft, by authenticating identity credentials and attributes using cryptographic hashes.

Blockchains can be used for cross-border ownership validation. To illustrate, professionals can own their credentials, copyrights, or delegate rights regardless of the jurisdiction.

Decentralized storage to enhance cybersecurity:

Blockchain enables decentralized storage of critical data, reducing the risks of cyber-attacks, data corruption, and downtime.

Based on the decentralized storage structures, blockchain use cases are:

o   In an ICT (Information & Communication Technology) network, when the centralized database suddenly goes offline or is at risk of cyber-attack, blockchains can be used to redirect users to the network, and reduce data exposures.

o   Blockchains can mitigate Distributed Denial-of-Service (DDoS) attacks by decentralizing Domain Name Systems (DNS). In a DDoS attack, hackers tend to flood the network with illegitimate internet traffic and block the flow of services for legitimate customers.

o   DNS links the domain names of user devices with their IP addresses. To find an entry point into the network, often hackers try to attack DNS. Once hackers gain access to the link addresses, they can crash the sites. Blockchain can be used to enhance DNS (Domain Name System) security through its decentralized, immutable and cryptographic structure.

o   Vehemently increasing adoption of AI & IoT technologies arises demand to establish a secure communication channel across the network. Blockchain can be used to enable an intact data security system owing to its decentralized storage and end-to-end device encryption.

How Does Blockchain Support Data Privacy and Cyber Security?

Creating Decentralized identity:

Digital platforms create our digital identity when we transact through them. With every interaction, data like personal information, username, password, online activity records, surfing history, shopping history, medical records, and other interests keep on getting linked with our digital identity. User identities are not stored in a personal database, so we cannot claim any ownership rights or access controls on our personal information.

Blockchains can solve this problem by offering users a self-sovereign identity or a decentralized identity. The users are independent of data storage in the database of a platform that they are interacting with. Besides, users can store data on their devices like personal computers, smartphones, offline hard disks, and/or cloud storage.

Blockchain allows us to create multiple decentralized identities. Each identity is protected by a private key, which is known only to the user. This private key can authenticate the validity of stored data. It is like the email address verification process; however, we own the data, and we decide which information to share and which to not share.

Blockchain-enabled decentralized identity is the key proponent of data privacy and cyber security.

Blockchain-federated identity:

A user’s federated identity is the means of linking their electronic identity & attributes that are stored across several identity management systems. Federated Identity allows users to swiftly shift between multiple platforms.

Federated identity enables SSO (Single Sign On) through which a single authentication/token/ticket of a user is valid across multiple software systems. These software systems are related yet independent of each other. Once logged in into the system, SSO allows users to access services without re-authentications.

Here the users need to remember only one login credential, and the rest is taken care of. This seems an utterly convenient process, however, it makes the entire organization susceptible to cyber-attacks.

The data from each facet of an organization is stored on a single central database governed by third-party providers. Data breaches in one security layer can compromise the security of the entire database.

Blockchain-based federated identity structures enable users to utilize smart contract audits for controlling their data accessibility across various entities. The immutable and decentralized structure of blockchains enhances data security across the network, without third-party involvement.

Blockchains improve the implementation protocols for federated identity and SSOs, supporting data privacy and cyber security.

Zero-knowledge Proof

We can prove the authenticity of possession if we reveal the information underlying it. However, proving the authenticity of possession without unveiling the information can be a real challenge.

Blockchains’ cryptographic structure enables zero-knowledge proof, in which the authenticity of user information is validated, without compromising the user’s privacy and controls. Simply put, Zero Knowledge Proof (ZKP) is a mathematical technique to authenticate a piece of information, without revealing that information.

For the practical application of the ZKP protocol, a series of cryptographic algorithms are applied by the verifier to authenticate a computational statement of the prover.

To illustrate: With the ZKP protocol, a receiver can verify that the payer holds sufficient bank balance to make a successful payment, without knowing the exact amount of balance present in the payer’s bank account.

In blockchain technology, there are two major types of Zero-Knowledge Proof protocols:

1.  Interactive ZKP protocol:

Interactive ZKP protocols are common in use. The verifier challenges the prover with a series of algorithm riddles. These algorithms are coded to verify the authenticity of the prover’s statement. The series of interactions continues until the verifier is convinced. Here the prover and verifier must be online at the same time.

2.  Non-interactive ZKP protocol:

Non-interactive ZKP protocols require higher computational power as compared to Interactive ZKP protocols. Here, proof generation is possible offline. The verifier can verify proof generated by the prover at any time only once.

Future of blockchains in cybersecurity:

Blockchain has emerged as a breakthrough technology in the global market. As per the market statistics, blockchain technology is estimated to grow at an accelerating rate of 85.9% from 2022 to 2030.

More than 50% of organizations in the world consider blockchain technology as one of their top strategic priorities.

The structure of blockchains makes the entire network intact and impenetrable. It helps in weeding out inadequacies from the network and supports the privacy and security of the database.

No doubt that blockchain is a transforming and ubiquitous technology supporting cybersecurity.

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