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Blockchain Technology and

Data: Identity, Storage,
Exchange
AUTHOR Gregory Rocco
6-7 minutos

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The age of big data isn’t a “new” period per se, but
rather an ongoing game of fire first, aim second.
Data has proven to be quite the valuable
commodity, with major blue-chip business models
being built on its exportation and processing.

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But what are the associated risks with relinquishing

and storing so much data with centralized
providers?

Every day as users in a connected ecosystem, we

constantly give out personally identifiable
information whether it be a name, address, credit
card information, or even the answers to recovery
questions.

We all had a taste of the downside 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 consumers, 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 complete control
over their data, and not trusting it to multi-billion-
dollar corporations that protect it simply with a
password that has less character restrictions than
the ones they impose on consumer accounts.

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This is exactly where blockchain technology comes

in; not to save the day necessarily with buzzwords
and rapid complete adoption of the latest token, but
rather to help build the infrastructure needed to
prevent these types of breaches. In truth,
blockchains aren’t currently equipped to handle
massive datasets, but there are ways in which they
can be utilized to protect data on multiple levels.

Blockchain Based Identity Verification

One of the first steps that can be taken with

blockchain technology in regard to 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 web? Phillip Windley breaks this
down in a recent write-up, using an example
featuring an individual showing their own ID at a
bar.

He explains how the DMV can issue an individual a

digital representation of their driver’s license which
can be validated both from the DMV’s keys linked to
their identifier, and the individual’s keys linked to
their own identifier. The bar in question can then
verify both the integrity of the ID, and the issuer in a

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system of proofs through associated keys.

uPort, one of many projects looking to tackle this

allows users to selectively permission data to any
service they’re utilizing, and keep their data stored
with them at all times. Verification comes through
the ledger, and no data is kept with the verifying
parties that require proof of identification. The issuer
of the form of identification simply needs to verify
credentials, but the actual user granting the data
retains the personal information when utilizing it for
verification with services.

Bloom, another project focused on credit issuance

in particular, looks to mitigate the risks posed by
centralized authorities handling sensitive data in the
credit-issuance world by implementing secure ID’s
using blockchain technology.

In that case, companies can verify the individual

utilizing their services without having to store data
on their end in centralized servers.

The Future of Distributed Storage

Issues of data storage and security can also benefit

from blockchain technology by introducing both data
splitting and encryption for protection. Decentralized
data providers are looking to rise to combat the

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currently centralized cloud-option providers to

mitigate pricing and ensure the protection of data.

Filecoin for example deploys a form of security that

provides end-to-end encryption with files in order to
protect contents, all while not allowing providers to
have decryption keys. Also, by distributing
information across an entire network, you lose the
risk of being compromised due to a single point of
failure. Although massive amounts of data can’t be
effectively handled using blockchain technology for
distribution and accessibility, it’s still a goal that
could potentially be within reach as the technology
evolves as rapidly as it currently is.

Data Exchanges – a New Form of

Marketplace

Besides data storage, a “data marketplace”

presents an interesting concept that can be
administered by leveraging blockchain technology
to ensure both safety and security with processing.

The Enigma project’s spin on data is creating a

data-marketplace encompassing every potential
vertical. Considering the desirability of large data-
sets, they sought out to question how such a
marketplace could operate in a trustless matter, all

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while maintaining data security as well.

A major problem that the Enigma project is trying to

solve with their data-marketplace vision is protecting
private data 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 run on the particular
data in question through a second-layer solution.

With their data marketplace idea came the problem

of what they call “data escape,” or rather,
participants in the marketplace selling acquired data
to other parties. Instead of disclosure, Enigma’s
secret contracts allow data to be processed by
nodes in their network while allowing that data to
remain private.

The age of big data isn’t ending anytime soon, but

the ways in which blockchain technology can be
used could help mitigate the risk posed by the poor
security practices of central entities, and allow
individuals to take back the ownership of their own
data.

Featured image from Shutterstock.

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