Introduction
Maintaining privacy in the online world has become a major challenge in recent times. From data theft and personal exploitation to financial risks, lack of privacy can create a difficult scenario for the netizens. Well, blockchain has revolutionized the field of privacy and online security. Especially in the field of data transfer and sharing, this technology has single-handedly dominated the entire web space. However, it’s not completely foolproof and may have some major safety flaws which need to be considered. Today, we’re going to discuss Blockchain's security mechanisms that can transform users' web experience.
Privacy and Blockchain
The idea of privacy and Blockchain are so closely tied. The most important factor about Blockchain’s privacy protection capability is that while sharing data your personal information is kept secure. Unlike the regular social media profiles, in Blockchain all you have is an address, leaving minimum possibilities of personal information leak. Let’s look at how Blockchain can help protect your data and enhance cyber security to the maximum.
What is Privacy in Terms of Data?
Well, our guide is going deep and we’re starting to talk about complicated elements. Before we move further ahead. Let’s look at what data privacy refers to. In simple terms, data privacy refers to the securing of personal data or information from individuals you don’t want to have access to. It also means that you have the full authority to decide whom you would want to share data with. Improved data security would:
- Reduce the risk of hacking
- Enhanced business management capabilities
- Adding safety to financial transactions online
- Safeguarding personal information like location, personal multimedia contents, and contact information.
Because of the mentioned benefits, maintaining data privacy is crucial for personal and organizational safety.
Current Status of Privacy in Blockchain
Here’s something you should know. Blockchain is still under development and it has an unimaginable potential to offer. Protection of individual privacy in Blockchain is way ahead of any other technologies right now. But it still has a long cliff to climb. Data, right now, is the single most precious thing on earth. We’re leaving our digital footprints everywhere. From making transactions at grocery stores and banks to Google searches and posting photos on Facebook or Instagram, we’re constantly giving away our data for organizations and individuals to collect for their benefit. Blockchain can minimize this data traceability to some extent. But right now, it still has a long way to go. Here are some of the current privacy issues you should consider regarding Blockchain:
1. All Information is Public
One of the biggest problems with Blockchain privacy is almost all the information is public. Whenever someone knows your address, he’d be able to look up all your activities. Simply put, all the Blockchain transactions and activities are transparent. Which makes it extremely problematic for maintaining privacy.
2. Hacking and Traceability
Despite the security-enhanced mechanisms, Blockchains aren’t completely immune to hacking. So your data can be at risk because of it. Moreover, organizations such as Chainalysis & CipherTrace can reveal the identity behind the blockchain address for certain pay, which leaves a major privacy flaw.
Well, these are some of the current privacy issues for Blockchain. But it’s not all bad for this fairly new technology. Let’s find out some of the benefits that can alleviate the security parameters for users.
3. Decentralized Transaction
If you want freedom from the all watchful eyes of the banks who are constantly keeping track of each transaction users make, Blockchain is something that provides you freedom. Blockchain is a completely decentralized transaction medium that allows you to make business undertakings and financial activities without the constant surveillance of the central banks, empowering your privacy.
4. Hidden Identity
As we already mentioned, unlike any sort of data transfer medium, Blockchain doesn’t require any images, personal information, or other individual data to work. As a result, nobody would have any idea about who you are. Every individual in the Blockchain connectivity is reduced to only a number, masking the actual identity of the user behind the keyboard and helping you to maintain some level of anonymity while you’re using the platform.
How the Privacy Can be Improved in Blockchain?
Well, as you’ve perhaps read that despite the new and unique techniques the privacy issues remain a challenge for Blockchain users. But, how can we improve the privacy scenario while using this platform? Let’s look at some of the ways it can be done:
1. Cryptography
One of the most utilized methods used to increase the privacy for Blockchain is known as the Zero Knowledge Proof approach. To simplify, this method is based on a proof protocol. This approach will help users verify data without involving third parties. Keeping aside the complexities, ZKP can improve privacy to a whole new dimension.
2. Tumblers
Another tremendously effective method is using mixers to completely anonymize cryptocurrency transactions. Tumblers or mixers can combine different cryptocurrency addresses to make them completely immune to tracing.
3. Ring Signature
Finally, you can use the Ring Signature technology to enhance the security parameters for crypto transactions. However, you may not be compatible with all the cryptocurrencies right now. It’s a sort of digital signature which integrates a group of signers to approve transactions. This particular technology is widely used with Monero, where the main signer unites a group of other signers which leads to the creation of a ring. Using this signature your address will be masked with other signers’ addresses and make it impossible for anyone to trace it back to the main initiator. It’s more like hiding in a large crowd, so one can’t be recognized.
Bottom Line
After a detailed discussion on Blockchain and its Privacy potentials and drawbacks, we’re at the final parts of our guide. Throughout the guide, we tried to enlighten your perspectives on how Blockchain can help you be more secure in the webspace and provided a solid understanding as to where it requires improvement. Blockchain is being developed consistently and some of the security flaws are taken very seriously. Sooner or later, these issues will be resolved and Blockchain will pave the path for a more secure and private webspace.