Blockchain Explained: How It Works

Blockchain, distributed ledgers and cryptocurrency are not interchangeable terms. Blockchain has to happen in sequence and partially helps provide data integrity.

Often, people misconstrue what blockchain is. The term “blockchain” has been co-opted. It is not cryptocurrency. Cryptocurrency uses blockchain. There are a number of elements to blockchain, which is sometimes also confused with a distributed ledger. To start, let’s discuss how blockchain and distributed ledger work together for an effective security strategy.

As crazy as this sounds, blockchain is exactly what it sounds like. It’s a literal chain of blocks. This chain of blocks only fits together in one specific way, providing a security benefit.

Let’s back up a little. Everything in security deals with CIA: Confidentiality, Integrity and Availability. Confidentiality refers to keeping information protected from people who don’t need access to it. Availability refers to being able to locate that data when you do need it. Integrity is different, this is typically an assurance from your provider that your data hasn’t been tampered with. It’s AWS or Microsoft Azure or whichever provider you choose to secure your data (we implore you to use cloud services) saying that your data is safe, it’s duplicated, unaltered and untouched. However, aside from their assurances, there’s no 100% way to know for sure if anything has been tampered with.

For example, a hacker could potentially access and tamper with data in a database, give themselves a million dollars, tamper with the logs to remove evidence that those changes were made and that they were in the system, and get back out.

Enter blockchain.

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Originally published at https://www.pwvconsultants.com on October 27, 2020.

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PWV Consultants

PWV Consultants

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Taking big ideas and turning them into the tools of process modernization for businesses like yours. A boutique group of experts in the tech & design industry.