Is blockchain going to be the beginning of a new golden era? We are going to explain what blockchain technology is, and then, we will discuss blockchain security in cloud computing.

What is blockchain technology?

The concept of blockchain gained mainstream attention in 2017. In simple terms, blockchain is a technology that enables data to be stored and transferred on a peer-to-peer basis. It can also be compared to a bank ledger holding transactions. It stores information about the date, time, and amount of money, etc. It’s used in a ‘decentralized’ manner and it eliminates the need for trusted third parties. The blockchain network doesn’t have any central authority. So, we can say that blockchain technology created the cornerstone of a new kind of internet.

Where blockchain technology comes handy?

The modern digital economy is based on reliance on a certain trusted authority. Simply put, the online transactions we make rely on trusting someone to tell us the truth. For example, when we send an email to somebody we need the provider to tell us that the email is delivered. The point is that we live our life rather uncertainly in the digital world by relying on a third entity for the security of our digital assets. The bad news is that these so-called third-party sources can be infiltrated.

Blockchain technology has the extensive potential to fundamentally transform the digital world by facilitating a distributed consensus. It means that every single transaction, whether be it past or present, including digital assets, can be checked at any time in the future. Better yet, it implements this without compromising the security of digital assets.

What blockchain isn’t?

The use of blockchain technology is not a magic solution. There are issues that should be acknowledged. For instance, how to deal with malicious users, or how controls are applied. Apart from the issues that are linked to technology, there are governance issues that influence the behavior of the network. Another topic that has been intensely debated is the issue of privacy and blockchain technology. Most claim that technology is irreconcilable with privacy laws, particularly with European Union General Data Protection Regulation (GDPR).

As we mentioned above, the primary purpose of blockchain was to facilitate peer-to-peer transactions without the need for a central party. In this technology, no single party takes responsibility for the security of a special blockchain network. Thus, all users of the system may have access to the data on the network.

The problem is that these characteristics conflict with the thrust of privacy laws. Because these laws demand the party handling personal data of an individual to provide the security and privacy of that data on behalf of the individual.

It’s true that the velocity of global technological change is boosting. For this reason, the adoption of blockchain technology will probably take some time. Although some benefits will be seen in the near future, the full potential of this revolutionary technology will take at least a decade to be discovered. Yet, it will certainly change the building blocks of our society.

Major risks of blockchain technology

Despite the high level of security that blockchain systems provide to the data recorded on them, there are some key cybersecurity risks that remain. It is no secret that new technologies always constitute new security concerns. Cybercriminals have already targeted many blockchain implementations using social engineering and exploits.

One of the main concerns about decentralized networks is usually about their control. Blockchains with a proof-of-work consensus algorithm are theoretically vulnerable to the ‘51% attack’. According to Binance Academy, it is ‘a potential attack on a blockchain network, where a single entity or organization is able to control the majority of the hash rate, potentially producing network disruption.’

If somebody would be able to earn control of a majority of the computing power (at least 51%) in a blockchain network, it can work in a centralized manner. Gaining this power is extremely difficult, purely because it demands vast computing power.

Another potential risk to a blockchain is a Sybil attack that is seen in peer-to-peer networks. Bad actors attempt to control a peer network by building multiple fake identities and therefore, use them to disrupt the systems’ normal operation. The main purpose of this attack is to obtain the majority of power in the network to conduct unlawful actions in the system.

Introduction to cloud computing

National Institute of Standards and Technologies (NIST) defines cloud computing as “an advanced model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.”

The growing interest in cloud computing leads to faster technological innovation, resulting in the advancement of many new cloud features. For instance, Amazon Web Services (AWS), Azure Stack, Oracle Cloud Infrastructure, VMware vSphere, and many more.

What does blockchain security in cloud computing mean?

As we have already discussed some important concepts about blockchain technology, now it is time to delve into blockchain security in cloud computing. Blockchain presents an innovative method of collecting information, performing transactions, executing functions, and building trust in an open environment. Despite the fact that blockchain has drawn increasing interest over the last few years, the security of blockchains remains to be at the heart of the debate.

Cloud computing technologies can be considered to be the blockchain technology’s predecessors. Blockchain networks can be run in cloud security settings, which can, therefore, play a principal role in blockchain implementations. Both cloud and blockchain have security protection systems, thus both are resistant to cybercrime.

As blockchain technology is getting traction in many different areas, it is usually recognized as an incorruptible technology. It is claimed that the security problems in a cloud environment can be resolved by blockchain technology. Any transaction data is stored and is hard to remove due to the consensus mechanism of blockchain. Apart from that, it becomes difficult for the intruder to interfere with the transactions data. It means that the larger the number of block-chain nodes, the more difficult it gets to modify the data.

This blockchain solution to the security as well as legal matters in the cloud forensic problem comes with a cost. Having blockchain ledgers distributed at a wide scale raises performance costs. Both technologies have a value proposition for organizations to offer advantages, but they also pose substantial challenges.

The benefits of cloud computing are essentially related to efficiency in operating the business. The benefits of blockchain put more importance on security. Although blockchain ensures data privacy and traceability of transactions, it can cause increasing performance costs in the cloud computing environment.

The bottom line about blockchain security in cloud computing

In this post, an overview of blockchain technology, and blockchain security in cloud computing has been presented. Obviously, blockchain proposes a novel way to exchange the information one doesn’t possess from other sources to put confidence in something or someone. Besides that, now it’s clear how blockchain technology enables failure-free transactions without an agent to complete the required check.

It seems that blockchain technology will revolutionize the way we live and businesses operate. If you wish to learn more about data protection and information security, please keep an eye on our weekly blog posts and security expert interview series.