An introduction to blockchain and what it means for data security

Many individuals heard about blockchain technology for the first time in 2017. Although it has many possible applications, it is best known as one of the key technologies underpinning cryptocurrencies such as Bitcoin and Ethereum, both of which reached all-time trading highs near the end of 2017. Their price surges fueled speculation about blockchain’s potential broader effects on every domain from logistics to medical devices.

What is blockchain, exactly? Despite the hype and the recent digital currency boom, the technology itself is pretty abstract, even compared to other in vogue technical concepts such as cloud computing. Let’s look at how it works, along with its implications for data security.

introduction to blockchainBlockchain activities are irreversible, thanks to the mathematical impracticality of making changes to the individual blocks.

Blockchain primer: A new system of record

Maybe the best way to understand blockchain is as an innovative approach to a ledger. It’s fundamentally similar to other types of ledgers like accounting books or Microsoft Excel sheets, but it’s set apart by its decentralized and immutable design.


Access to a blockchain is distributed among the nodes (i.e., participants) on its network. Accordingly, it’s different than ledgers that are held in private copies by a select few. When a new entry (block) is attempted on a blockchain, nodes must reach consensus before it clears.

There are many possible consensus mechanisms, but one of the most common is called proof-of-work. It involves submitting a solution to a complex cryptographic problem to demonstrate that real-world resources (usually CPU processing cycles during cryptocurrency mining) were consumed by the transaction. This is how Bitcoin works.


Blockchain activities are irreversible, thanks to the mathematical impracticality of making changes to the individual blocks. This immutability has some drawbacks in finance (e.g., there is no chargeback a la credit cards) but it has upsides as an anti-tampering measure. A well-maintained blockchain should be a trustworthy record of transactions, free of any secretive modifications.

Some of the most prominent proposed applications for blockchain – such as those in supply chain management – hinge on the prospect of increase trust between parties. The theory is that they will be able to cooperate more easily since they can all have faith in a blockchain-based recordkeeping system.

Blockchain and data security

Blockchain could help improve data security by reducing the chance of sensitive data being deleted or changed. However, not all blockchains are created equal. Private blockchains restricted to users vetted before they can join are typically safer than ones open to the public, as there will be less likelihood of sensitive information being exposed.

Since blockchains are digital creations, they are only as safe as their underlying infrastructure, including the stewardship of associated encryption keys and account logins. Stories abound of people who lost significant amounts of cryptocurrency due to cyberattacks against poorly secured online exchanges. The immutability of those blockchains did their victims no good in the wake of successful breaches.

Consumers should tread lightly for now in regard to blockchains and be sure to take practical steps to secure any blockchain-tied assets they own, as well as the devices they use to access and/or store them. The same security measures that apply to securing traditional types of data apply here, too:

  • Be sure to have anti-virus software installed to prevent malware from hijacking your PC and using it to as a Bitcoin miner.
  • Protect your accounts with two-factor authentication and strong passwords.
  • Back up your data, ideally to both a cloud-based service and a local hard drive.

Total Defense has the solutions to help you protect your data as blockchain becomes more prominent. Learn more on our online shop page.