How Blockchain helps protect your data from hackers

Blockchain and Bitcoin technology


There is a great deal of noise around right now in the IT world regarding Data Science and Big Data. Many new job roles are being created in Data Science related roles including in the field of Information and IT Security.


Within all this there is a newly emergent data encryption technology called Blockchain technology. This technology underpins the infamous Bitcoin currency and the many lookalikes that it has recently spawned. The interesting thing about Blockchain is that it has grown up now from its initial use in Bitcoin.

Banks and Financial institutions, many business start-ups and manufacturers of Internet of Things (IoT) device are also starting to adopt the technology.

The primary reason for the take-up of Blockchain is data security. Blockchain is, put simply, the most secure and impenetrable way to transmit data securely period. In future it could even mean that some forms of penetration testing, provided by experts such as ourselves, becomes somewhat unnecessary, only time will tell!


How Blockchain secures data

The first thing to note with Blockchain is that it removes any need for an intermediary or middleman during any financial or other data transfer process.

For instance, Banks and Financial Institutions will often use organisations such as Euroclear or Swift to validate their transactions. Blockchain removes this need offering instead a virtually un-hackable level of data encryption whilst cutting out the middleman!

Many companies and organisations would therefore likely benefit from adopting blockchain technology. A large number of Banking, IT, Financial Services and new tech start-ups are looking seriously at, or implementing, the technology now. Other organisations too, that require the most secure data transmission such as the emergency services and military, are also investigating rapid adoption of this new tech.

So, it seems that from tiny SME’s to tech giants such as Apple, the benefits are very real. Think about a company like Apple, secure delivery of their software across the Internet is a necessity. Should the data they transmit be corrupted or altered in any way, before reaching its end-user, disaster could strike!


Why you should use Blockchain encryption

Nowadays we all should be thinking about the safe and secure transmission, and reception, of invaluable personal and corporate data. Organisations must strive to protect both their own and their clients data. Never forget, there are many types of cyber criminals and even nation states that may be trying to intercept information 24 hours a day!

Existing IT security protocols and safeguards all have certain security issues, in fact there are usually many different vulnerabilities and exploits that savvy hackers can use as back-doors into your data.

The far more secure blockchain encryption technology bypasses many of the existing flaws within legacy IT Security safeguards, providing additional layers of security whilst it does so. As discussed already, Blockchain does not use any middleware technology or middlemen, it also provides of the most advanced crypto tech that has yet been devised by man, which we will describe next.


How does Blockchain work?

First of all, a Blockchain is a distributed database that maintains a list of records, called ‘blocks’, that is continually growing. This means that the database is not stored in just one place, it is spread out or ‘distributed’ and no one has access to the entire database!

This means that there is no single or central point of vulnerability within the Blockchain and that, as anyone working in IT security will tell you, is good news meaning that you can relax in the knowledge that your data is utterly secure!

Moving on, the next thing to note is that the blocks within the blockchains are unalterable; once they have been recorded they cannot be penetrated and modified in any way.

Parties on both sides of a transaction will be able to verify transactional details with 100% accuracy. This is what makes it amazing for any form of secure communication or data transmission. The underlying data really is impenetrable. Simple huh?

Now, lets break Blockchain down a bit more into some of the individual steps that may take place within it, depending on its setup:


  1. Blockchain consists of two main entities, these are known as ‘miners’ and ‘hosts’. The data ‘miners’ are computers that are used to calculate a solution to a very sophisticated mathematical equation. Hosts can be thought of as being the stores of the transactional data.
  2. Now, Blockchain uses an advanced variation of arithmetic known as ECDSA or, in plain English, that’s ‘Elliptic Curve Digital Signature Algorithm’ to you!
  3. Another thing to note is that the ‘miners’ use Asymmetric Key Cryptography as the data encryption technology. Clear enough so far?
  4. When a new transaction enters the Blockchain network, the ‘miners’ will set to work by using their raw computing power to solve each individual transactions ECDSA equation.
  5. After much repetitive computation, the equation will be solved and success achieved as the transaction is verified by the solutions output data.
  6. This solution is then ‘matched with the data string that was first input to the Blockchain to absolutely confirm its authenticity.
  7. Once this match has been successfully made, the individual transaction will be added into the Blockchains network of ledgers. This is simply the accounting system of the blockchain network. It is not alterable. It forms the Blockchains historic record, or ledger, of all completed transactions and is stored forevermore in its final form for future use and reconciliation.
  8. Paired public/Private key technology is also utilised to protect the final output solution, which means that a hacker cannot alter or corrupt any solution record within the blockchain network by penetrating it.
  9. The level of Data Encryption can be increased or decreased, by the clients using the network, according to their security needs.


So there you have it, this is our introduction to Blockchain and why you must consider it in order to prevent the penetration of your systems and loss of your valuable data.

If you need any help or advice regarding penetration testing or setting up blockchain then contact the experts in pen-testing and blockchain technology here at Security Audit Systems!


With a blockchain and pen test partner company such ourselves on hand, you can be assured that your data is as secure as possible.


Thanks for reading.