A unit of cryptocurrency exchange platform Binance called Binance Smart Chain recently launched a $1 billion fund to help fast-track the adoption of digital assets and blockchain technology. From that fund, $500 million is reserved for investments in decentralized applications, such as computing, metaverse, gaming, virtual reality, artificial intelligence, and blockchain-based financial services.
Certainly this development supports the notion that blockchain is clearly on the rise. That said, we have yet to figure out exactly what its capabilities and limitations truly are. Blockchain is fundamentally a distributed and decentralized database that stores information in the form of chained blocks, linked together by cryptography. As a decentralized ledger system, blockchain isn’t owned by a single entity. Rather, all users have collective control over thousands of computers, which form a network. Within this network, all data transactions are recorded publicly and transparently, and are irreversible.
As we’re continually learning, this framework for the technology allows for seemingly countless applications. One of the most significant uses for blockchain, however, is to beef up cybersecurity. It’s been a tough few years from a security standpoint for anyone operating on any digital network platform, given the rise of increasingly sophisticated and damaging cyberattacks. Blockchain, however, can be used to ensure the integrity of transactions and halt foul play. Although the technology is not unbreakable, it’s currently the most foolproof way to conduct secure transactions across digital networks.
With this in mind, let’s look at four specific use cases of blockchain for security:
1. Social messaging apps
Social messaging apps have been our lifeline throughout the pandemic, but our accounts on them are often protected by weak and unreliable passwords. As we discussed in our article on ‘Mobile Data Security Issues & Threats’, very few people use a combination of strong passwords, two-step authentication, and password managers. Instead, they use the same, easy-to-remember (and easy to guess) passwords across all kinds of accounts. This leaves the metadata we create through our social interactions vulnerable to hackers.
With blockchain technology, we can develop a standard security protocol for private messaging and even enable cross-messenger communication capabilities by forming a unified API framework. End-to-end encryption messaging services like Telegram or WhatsApp have stronger user protection than most, but are still maintained, modified, and updated by private entities. Blockchain-based app Dust, by contrast, operates such that nothing is stored anywhere. Messages are erased 100 seconds after being read, or 24 hours if left unread. Dust also notifies users when a screenshot was taken by the recipient, leaving nothing to chance. This makes exchanges in this app safe against identity theft or data leaks.
2. Money transfer and payments
The most rational application of blockchain technology is the transfer of funds securely from one party to another. To that point, cryptocurrency remains the most famous use of blockchain technology. Cryptocurrency advocates and users are often people who were dissatisfied with the fees, delays, and hurdles associated with digital transactions and cross-border payments. Historically speaking, banks, money transfer operators, and other financial institutions have often operated in a slow and convoluted manner by comparison to the blockchain.
Simply put, blockchain eliminates red tape. Its ledger updates in real time, third-party fees are all but non-existent, and transactions spreading all across the world can occur within seconds. This explains why blockchain technology is fast becoming a preferred option for money transfer, and it is the security inherent to this technology –– namely, data encryption and transaction transparency –– that makes it all feasible.
3. Copyright protection
Protecting intellectual property and different types of content through copyright or royalty laws has grown difficult in a high-speed and hyper-connected world. Blockchain tech can be applied in this space too, however, to increase copyright protection for digital downloads and prevent digital assets from being illegally duplicated. Indeed, the transparent ledger system essentially makes piracy impossible –– or at least makes it so easy to spot that it becomes too risky to attempt. This basic fact is in part what’s led to the rise of non-fungible tokens, or NFTs. These are valuable digital files that enable content creators to maintain full rights to any music, art, GIF, video, or even meme sold on a blockchain network.
AskMoney recently wrote a post describing how this can work, using specific examples from the NFT world that have come to light. As they explain it, an NFT is like a signature attached to a digital file so that artist protections can be assured no matter what happens with said file. With a unique code that can’t be replicated, NFTs can prove whether a file is the authentic original or not. It’s possible to extend the use of NFTs to tangible assets as well. The fashion industry’s issues with counterfeit goods, for instance, can be resolved by attaching NFTs to luxury goods.
4. Internet of Things (IoT)
The Internet of Things (IoT) connects devices, networks, and systems over the internet. According to a report published by MarketWatch, consumer IoT technologies like smart homes are projected to grow at a CAGR of 18.95% by 2025. While this moves us closer to an exciting, sci-fi-esque future however, patchy IoT security features can be exploited by cybercriminals. Edge devices like smart switches can thereby become vulnerabilities that allow hackers to access bigger systems, such as whole smart homes.
Blockchain can secure systems and individual devices alike by decentralizing operations away from a central admin. This approach enables devices to make security decisions independently, so that they can detect suspicious commands from unknown networks and respond accordingly. As an example of this sort of thing in practice, password-less company HYPR is using blockchain biometrics on IoT devices, and removing a substantial amount of risk. In this instance, servers no longer contain passwords, but are replaced by user biometrics instead.
Amidst all the change this will bring about however, advances in digital security will be among the most important developments.
Thank you for reading! For more articles on technology, computers, and the all things internet, we encourage you to continue to browse Zappedia at your leisure.
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