Blockchain Technology and Data: Identity, Storage, Exchange


The age of big data is not a «new» period per se, but rather an ongoing game of fire, aim second. Data has turned out to be quite the precious commodity, with important blue-chip business models being built on its exportation and processing.

But what are the associated risks with relinquishing and saving so much data with centralized providers?

Daily as customers in a connected ecosystem, we constantly give out personally identifiable information whether it be a name, address, credit card info, or even the answers to recovery questions.

We all had a taste of the drawback of centralized, trusted big-data breaches when Equifax announced back on September 7th that their system had been breached, exposing the information of approximately 143 million consumers. The affected data included sensitive materials such as Social Security numbers, driver's license numbers, and even credit card numbers.

This posed a huge blow to customers, but it kickstarted a very important conversation about data integrity and personal ownership over data that should've started years ago. Individuals began to realize the value in both having total control over their data rather than trusting it to multi-billion-dollar businesses that protect it only with a password which has fewer character restrictions than the ones they impose on customer accounts.

This is exactly where blockchain technology comes in; not to save the day necessarily with buzzwords and rapid, complete adoption of the most recent token, but rather help build the infrastructure required to prevent these kinds of breaches. In truth, blockchains aren't currently equipped to deal with enormous datasets, but there are ways in which they may be used to protect data on multiple levels.

Blockchain Based Identity Verification

One of the first steps which may be taken with blockchain technology for the protection of data is through the use of a self-sovereign identity. How could one possibly recreate the interaction of presenting a physical form of ID on a person-to-person level on the net? Phillip Windley breaks this down in a current write-up, using an example featuring an individual showing their own ID at a bar.

He explains how the DMV can issue someone a digital representation of the driver's license which may be supported both by the DMV's keys linked to their identifier, and the individual's keys connected to their own identifier. The bar in question can then verify the integrity of the ID and the issuer in a method of sifting through associated keys.

UPort, one of many projects seeking to tackle this allows users to selectively permission data to any service they are utilizing, and maintain their information stored with them constantly. Verification comes through the ledger, and no data is kept with the verifying parties that need proof of identification. The issuer of the kind of identification simply needs to verify credentials, but the real user granting the data keeps the personal information when using it for verification with services.

In that case, companies can confirm the individual utilizing their services without needing to store data in their end in centralized servers.

Problems of data storage and security may also benefit from blockchain technology by introducing both data splitting and encryption for security. Decentralized data providers are looking to rise to fight the currently centralized cloud-option suppliers to mitigate pricing and ensure the protection of information.

Filecoin such as deploys a form of security that offers end-to-end encryption with files in order to protect contents, all while not permitting providers to have decryption keys. Also, by distributing information across an entire network, you drop the danger of being compromised due to a single point of failure. Although massive amounts of data can not be efficiently managed using blockchain technology for accessibility and distribution, it is still a target that could possibly be within reach as the technology evolves as quickly as it currently is.

Data Exchanges — a New Kind of Marketplace

Besides data storage, a «data marketplace» presents an interesting concept that may be administered by leveraging blockchain technologies to ensure both security and protection with processing.

The Enigma project's spin on data is creating a data-marketplace encompassing every possible vertical. Considering the desirability of large data-sets, they sought out to question how such a marketplace could operate in a trustless matter, all while maintaining data security too.

A significant problem that the Enigma project is trying to resolve with their data-marketplace eyesight is protecting confidential information on the blockchain by using what they call «secret contracts.» Their secret contract system's purpose is to ensure data privacy even while computations are being conducted on the particular information in question through a second-layer solution.

With their data marketplace idea came the issue of what they call «data escape,» or rather, participants in the market selling obtained data to other parties. Rather than disclosure, Enigma's secret contracts make it possible for data to be processed by nodes in their network while allowing that data to remain private.

The age of big data is not ending anytime soon, however, the ways in which blockchain technology can be utilized could help mitigate the threat posed by the poor security practices of fundamental entities, and permit people to take back the ownership of their own data.