Life before the cloud meant that most data storage solutions were decentralized and hosted on servers on-site. That local presence means more control for the enterprise, but it creates problems with scalability and efficiency. Many companies have been switching to the cloud. Indeed, there are many benefits to cloud adoption in terms of scalability, flexibility, data storage, reliability, cost-effectiveness, uptime, and others. Still, one of the downsides has traditionally been security because a lot of the cloud security requires an enterprise to rely on third-parties to secure private, sensitive data. Blockchain could be a more affordable and efficient technology to use for security purposes.
It’s not a surprise that many companies have begun to make the switch towards cloud computing. After all, it’s much more flexible and cost-effective, giving organizations access to incredible value, and allowing them to replicate their data across a range of data centers, offering redundancy and reliable uptime solutions. Of course, with all the benefits cloud computing has to offer, there are some downsides too. Whenever we use a cloud service, we need to put a significant amount of trust in third-parties to keep our most private and sensitive data secure. To understand Blockchain’s potential applications within the business world, one must understand what makes this technology unique. When it comes to trading and buying Bitcoins, Blockchain allows people to manage their cryptocurrencies with transparency and security because every time something is changing with Blockchain, the ledger records the alteration for the entire public network to see.
Improvements in Interoperability
Blockchain Solutions have suffered from a lack of connectivity mechanisms between differing blockchain solutions, creating obstacles to the broader adoption of the technology. Recently this situation has improved, and tech companies are offering viable solutions to establish connections between different ledgers.
Ripple released a mid-ware arbitrary protocol that can “connect” different types of ledgers, both distributed and traditional centralized ones. The goal of this protocol is to improve interoperability between financial institutions. Another benefit of Interledger is that it allows users to store aggregate transaction data of a public blockchain by using a connector to transfer funds between private versions of the Ripple network.
Customer data privacy remains a considerable challenge for enterprises because they need to upgrade their systems to stay compliant with emerging regulations continually. By leveraging blockchain technology, businesses can reduce their data ownership and the challenge and cost of updating their systems. Customer information gets recorded on a distributed ledger and does not need to change hands when transactions are executed. Instead, users grant permission for access to those records whenever they are required. This allows enterprises to remain compliant with far less effort, and users benefit from increased privacy and security.
Blockchain Security Challenges
Blockchain technology is evolving, and many technical advances have been made to keep user data private. Even so, there are still legal and compliance issues such as Art. Seventeen of the GDPR or “the right to be forgotten.” This article challenges the way data is stored across blockchain networks.
There is some healthy skepticism being expressed about the use of blockchain for data security because a blockchain for data storage only functions as a ledger that ensures no one has changed the data. The other issue with blockchain technology for data storage is that the distributed ledger method blockchain utilizes is not efficient for general data storage and not for large databases that require a high transaction rate. The other thing in favor of current cloud storage centers is that they still retain several economic benefits over blockchain-based storage solutions such as economies of scale.
If you store data on-chain, you cannot comply with data regulations because the data becomes immoveable, which is the point of a blockchain. Besides, there is a much greater need to track what data is shared with whom and the point at which that data is shared. There is also a need to know if access is granted or revoked because of the increasing regulations governing personal data and privacy. This permission layer will move to the blockchain, and that, in turn, will have implications for cloud provider business models.