Unpacking crypto: blockchain, cybersecurity, and the future of transactions
With the value of Bitcoin skyrocketing this last winter, the idea of the blockchain being used to streamline online business transactions is becoming more of a reality. Better yet, it seems as though this idea is being entertained further every day.
Blockchain: a method of doing business digitally
Even financial industry leaders like Goldman Sachs have identified Bitcoin as a legitimate form of currency. Now, it seems to be a matter of developing sufficient security to integrate this payment method into the global supply chain. At this time, developing a strong enough cybersecurity defense (one that has no risk of remote hackers or viruses breaching it) to support these transactions is of the utmost importance.
More on that later, but for now, let’s make sure we’re all on the same page when it comes to understanding the blockchain and the cybersecurity implications that come with it.
The inner workings of the blockchain
The name “blockchain” sounds a little abstract, and it is. But, it’s actually not too complicated when you break it down. The title simply refers to “blocks” of data that are encrypted and then added to a “chain” of existing data blocks. This data can represent an online transaction, and securing this data in “block” form allows it to be added to the blockchain. This process further solidifies its security and permanence, as all data added to the chain becomes permanent and unalterable.
To expand, the timeline from starting to completing an online transaction using blockchain essentially looks like this: An online transaction is…
- Requested. First, for the transaction to occur at all, it must be specifically requested. Nothing out of the ordinary here; if you want to buy a product, you have to insert your credit card chip. This is essentially “requesting” the transaction.
- Validated. From here, it’s transferred to a network of computers, or “nodes”. These computers are separate, but they work together to determine the transaction’s validity, using established algorithms.
- Verified. After that, blockchain verifies the type of transaction taking place. This could be a number of things, but the most popular use right now is cryptocurrency for purchasing products and services.
- Blended. Then, this transaction’s data is blended in with other transaction data. This is another step to secure the data, and makes its manipulation extremely difficult.
- Added. Now, the transaction is finally added to the blockchain. This chain supports hundreds of thousands of transactions (and growing). Once added, it can no longer be removed or manipulated.
- Completed. And that’s it! The transaction is complete. Under this process, you will have engaged in the successful and (ideally) secure exchange of cryptocurrency for goods and services.
Ideally, after further development and successful implementation, blockchain will allow for sensitive data to be safely stored and transferred in digital space, eliminating risks of tampering. That being said, while this process has proved to be effective in some cases, it’s still unclear as to whether or not it could be implemented at the global level.
These complications derive from the fact that the blockchain relies on heavy cybersecurity support, which must be perfected before we can hope to truly achieve its successful full-scale implementation.
Cybersecurity and the future of blockchain in online transactions
Given our increasing dependence on technology, blockchain is the logical next step for securing our data permanently online. In fact, a recent report shows that over 30% of organizations are either already using or planning to use the blockchain for exchanging information. However, as mentioned before, there are still a lot of security concerns regarding this reality.
First, let’s look at blockchain’s security strengths. One of the most notable is its decentralization of data transfer. Normally, when you engage in an online transaction, that transaction’s data is stored centrally, in one place, usually a central bank. With blockchain, the transaction’s data is spread out among numerous different personal computers, making it much more difficult to tamper with the transaction. These users serve as a decentralized and distributed “team” that works constantly to validate the data, taking a small service fee in the process.
Additionally, the blockchain platform has a great unique feature where it auto-audits itself every 10 minutes. With this automated assurance, the platform is able to even further check to make sure that all data is valid and secure.
With these aspects in mind, you may be asking: why aren’t we fully on this system yet? While this platform looks highly attractive in terms of its potential impact on all future business processes, it still has its fair share of weaknesses. One of the greatest weaknesses and fears of the blockchain platform is this idea of real “full-proof” security. For this to be possible, it’s going to require majority support at the social level for further research and development for the blockchain. This will likely take some time, but the idea is becoming more popular every day.
Finding security in the age of cryptocurrency
Using the blockchain to execute online transactions could very well be the future of online payment (among other uses). For this reason, we’ve become particularly obsessed with understanding the platform, the cybersecurity involved with its functioning, and how cryptocurrency could be used to support a business in the e-commerce space. In the spirit of strengthening your e-commerce platform, if you’re interested in successfully transforming your digital strategy through the use of blockchain and cryptocurrency, we’d love to hear from you.
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