In today’s digital world, safeguarding our personal photos, financial details, and even our communication stored on our phones is our top priority. While our smartphones also come with a high level of security features, data leaks still happen. So, why are there so many data leak incidents? How does blockchain support data privacy?

Blockchain is a technology that uses encryption and decentralized features to secure data. Blockchain is a safe way to share data on the internet while maintaining transparency.

In this blog, you will learn what blockchain is, what data privacy is, and how blockchain ensures data security. We will understand the features that make blockchain a secure technology. We will discuss the application of blockchain in some industries and how they have secured their data. 

Also read: Blockchain Technology: Everything You Need to Know!

So, let’s dive into the world of data privacy and see how this phenomenal blockchain technology can support the world of data security.

What is Blockchain? 

Blockchain is a digital ledger that stores all data of the institution on every participant’s computer in the network. There is no centralized authority controlling the data. Instead, it’s available to all participants. The data is stored in blocks, and each block is linked to the other, forming a chain. These blocks are secured with the encryption of their block and the previous block. This makes the data saved on blockchain highly secure. Since the encryption used is in cryptographical technique, it makes it impossible for you to modify or delete the saved data. 

What Is Data Privacy?

Data privacy is when you don’t want your personal data to be shared with everyone. But you want to share access to your data with only some people whom you trust. For example, you want your medical data to be accessible to your family in case of an emergency. They can access your personal medical records with the help of a password you share with them. And in the case of blockchain, data privacy includes confidentiality, integrity, accountability, and availability. 

Also read: What is Cryptocurrency Explain in Detail?

In this digital era, securing digital data for business has become challenging due to many factors. The two main factors are data breaches, in which any individual gains access to confidential information, and ransomware attacks, where the data is encrypted by hackers and they demand high payment for decryption. This is a potential risk businesses face in securing data as their data. Not only is their data at risk, its companies reputation and finances are also at stake. This problem has highlighted the need for secure digital data privacy. 

So, let’s understand how blockchain supports data privacy. 

How Does Blockchain Support Data Privacy?

Blockchain technology is an invention of digital problems faced in data security. Blockchain is designed to eliminate the issues related to data breaches and hacks. Here is a list of blockchain features that support data privacy. 

Decentralization

Decentralization is an essential feature of blockchain. It allows everyone on the chain to have access to the data. In blockchain technology, no single person owns the data collectively distributed in the network. Multiple nodes participate and can store with the help of a peer-to-peer network. This means every participant on the network has a copy of data and transactions that take place on the blockchain. 

If in case any participant’s computer is hacked, even then, your data will remain secure. But how? 

Also read: A Beginners Guide: Is Crypto and Blockchain Same Thing?

Blockchain is run by multiple participants on the network, and if any block needs to be modified or deleted, it requires approval from other participants on the network. The data stored on the blockchain is transparent and can be viewed by everyone on the chain with the internet. Private blockchain controls the access of information and authorizes only some members of the network.

Immutability 

Immutability is a feature that does not allow any changes or deletions of data once you add it to the blockchain. This ensures the protection of data without being manipulated, which is very important in maintaining data privacy. So how does it work? 

Each block stores data that has a unique code called a hash. Hach acts like a fingerprint. It is generated by using the current block content and previous block code. If there’s any change made in the block, it will change the hash and make the old hash invalid. It makes the data tamper-proof, maintains data integrity and also builds trust and transparency.

Encryption

Encryption is another protective layer to enhance data security. Encryption is a way of securing data that only authorized participants can access. The encryption used in the blockchain is cryptographic. Cryptographic encryption is used to maintain data privacy and authenticity. One cryptographic encryption is through hashing. 

Where each block is locked with a previous block, forming an immutable chain. With the help of hashing, the data stored is tamper-proof. 

There are two cryptographic encryption techniques:

Symmetric encryption 

This encryption uses only one key to encrypt and decrypt the data stored. Since it’s a single key, it shall be a secret, and there shall be a secure sharing between all the participants. 

Asymmetric encryption

In this encryption technique there are two keys used, a public and private key. Where each participant on the network has two keys. First the data is encrypted with a public key and can be only decrypted by the participant with his private key. The private key and public key have a mathematical interaction that provides access to the data.

Zero-Knowledge proofs

Zero-knowledge proof is a feature that helps control data sharing. It is a cryptographic technique where the participant is allowed to share some information without revealing complete details on the data. After the algorithm verifies the information that was required, the participant is permitted to access the data. This ensures privacy verification without compromising confidential data. 

What Are the Use Cases of Data Privacy?

Blockchain is adopted by many industries. Here is a list of a few industries using data privacy.

Supply chain management 

Blockchain is used for tracking the movement of goods in the supply chain. Supply chain data needs to share information regarding goods shipped with their documents between the supplier and company. Blockchain technology supports the management by ensuring transparency and security of information and also product authenticity. 

Healthcare

The healthcare industry stores data that is sensitive from records of medical facilities, supplies, and, most importantly, patients’ health records, which need security. The blockchain serves the purpose of healthcare by controlling data access. Current blockchain healthcare systems grant access to only authorized participants. While they give patients to have complete control over their information. 

Voting system 

With the old traditional voting system, it was quite possible to manipulate the vote counts and even voter records. The blockchain voting system puts an end to such practices and offers trust and transparency in the process. Blockchain technology helps encrypt votes and records them on an immutable ledger, which cannot be changed or modified and provides accurate vote counts. 

Conclusion

In this article, we understand How does blockchain supports data privacy. Blockchain promises to enhance data security and privacy in the digital world. It supports data privacy by offering features like immutability, decentralization, encryption, zero-knowledge proof, and consensus algorithm. There are various challenges faced by blockchain, like scalability, regulations, and also finding a balance between privacy and transparency. 

Financial institutions, healthcare, supply chain management, and other regulatory institutions have seen the benefits of deploying blockchain in their systems. Blockchain also helps organize data about the business and customers in a systematic form that makes tracking records easier. Though blockchain has yet to achieve complete potential, there are constant advancements made in the technology to achieve the goal of data privacy. As the technology improves and provides multiple sector solutions, we will have a safe digital environment.