Blockchain: From the economy to global data protection

Cryptomania dominates the talks from Silicon Valley to Wall Street. But ‘cryptocurrency’ is just an implementation of the underlying technological innovation that has the ability to transform the way future technology products are designed and built. Of course, that technology is blockchain, the decentralized digital system that makes Bitcoin or other cryptocurrencies possible.

First, we need to establish a common framework for the fundamentals of technology. Its fundamental element, the block, is a piece of data that is securely packaged and then saved with a cryptographically secure reference to a previous block. Each block becomes part of a chain, and there is no mechanism to edit or delete blocks once they are added.

While the data chain has strong cryptographic protection, if stored in a physical location, it would still be vulnerable to piracy. To address this, a decentralized storage approach is critical to blockchain design. The entire blockchain is replicated on multiple nodes in a storage network.

How blockchain works

Blockchain consensus works when each node performs frequent checks with all other nodes to see if its blockchain image matches that of the others. This makes the blockchain invulnerable to hacks. A successful hacker would need to gain access to at least 51% of the nodes and simultaneously make the same change to all of them to convince the blockchain network that the pirated version of the truth is correct. This is technologically unfeasible due to the intrinsic security within each blockchain node.

It is important to note that the preconditions for blockchain use cases to operate at scale are now being focused. They are rapidly increasing processing capacity. At the same time, storage costs are plummeting, and data is moving faster and faster. As these 3 preconditions continue to accelerate, we will see new use cases emerge for blockchain technology.