Improving trust with blockchain – CoinGeek

Blockchains are often described as “trustless networks”, but few really think about what that means or the implications it has for governments, businesses and the world at large.

Trustless networks can be loosely defined as networks that do not require any superior authorities or intermediaries to govern them. They have mechanisms where the participants reach a consensus about the truth without having to know or trust each other.

Bitcoin SV (BSV) is one example of a trustless blockchain. Nodes reach consensus on the status of the ledger, and due to the system’s financial incentives, it would be more profitable to process transactions honestly than to take any harmful or malicious action should one of the parties gain the power to do so.

Let’s look at how trustless blockchains can reduce risk and improve trust and transparency in a number of ways.

Store data securely on trustless blockchains

We live in a data-driven world, and the secure storage of sensitive data of all kinds is at the top of every organization’s agenda. Whether related to internal business strategy data or citizen personal data held by a government, data breaches, leaks and compromises of any kind can be costly both financially and reputationally.

Trustless blockchains like BSV were designed to reduce the risk of sending, receiving and storing data. Bitcoin is essentially a distributed database, with the state of the ledger maintained by the nodes that write to and maintain it for profit.

Writing data to the blockchain in this way gives organizations of all kinds peace of mind that their data has integrity. Any subsequent access to the data or modification of it after the initial upload is recorded on the public blockchain, making it possible for the first time to prove that data has or has not been tampered with and take corrective action if necessary.

The ability to trust data will become even more important in the age of artificial intelligence (AI) and machine learning. Ironically, it is trustless networks that will make data more reliable.

Transfer data with blockchain applications

Still, storing data is surely not the only thing we can do with massively scalable public blockchains. It will also be safer to send and receive it.

Applications such as email are already built on the BSV blockchain, making it possible to send data directly from sender to recipient without going through trusted intermediaries.

In an age where data collection companies control the networks we use to communicate and where no one can be entirely sure who is listening in on private communications, whether it is resistance authorities or corporate competitors, the ability to transmit sensitive data via peer-to-peer networks will have revolutionary implications.

Once again, we see with a certain sense of irony that it is because of trustless networks that we can rely on our communications to be 100% secure.

Improved cyber security using blockchain technology

The secure storage and transmission of data has one notorious enemy: hackers. Whether they’re in it to steal data, wreak havoc or turn a profit, hackers are a menace to society and cost governments and corporations billions per year. It is estimated that cybercrime will cost the world $10.5 trillion annually by 2025, which is likely to grow significantly as time goes on.

Still, thanks to trustless blockchains, next-generation cybersecurity tools like Sentinel Node are being developed to dramatically reduce the time it takes to detect hacks, allowing solutions to be deployed more quickly. Tools like this write transactions to the immutable blockchain that describes the state of a network every second, allowing real-time detection of unauthorized access or changes to networks and their files.

With the average data breach costing $9.4 million by 2022, the ability to quickly detect hacks increases everyone’s confidence in the integrity of the networks protected by these tools and reduces the risk of the costs associated with them. Over time, these tools also increase customer confidence in businesses and organizations that don’t suffer the same catastrophic data breach that others do.

Tracking and tracing of financial transactions on blockchains

So far I have focused on how blockchains can increase our confidence in the integrity of data and the security of both communications and networks.

But blockchains can also be used to increase trust and transparency in financial transactions.

On blockchains like BSV, all monetary transactions are sent peer-to-peer from one wallet to another. Each time a transaction is sent, it is timestamped and logged on the immutable blockchain database. While information such as what transactions were for and between whom they were sent is strictly private and between the parties concerned, a transaction for X amount that took place on date Y to time Z will be visible to everyone.

This type of open, transparent system can dramatically increase trust in organizations. CFOs can understand how company funds are spent on a daily basis instead of waiting until quarterly accounts are filed, dramatically reducing the risk of fraud and common business problems such as cash flow problems or misappropriation of company funds.

For public organizations such as government departments, citizens, journalists and all other stakeholders can see how public funds are spent, which prevents corruption and makes it easier to prove when it happens.

Trusted networks for a more reliable world

The implications of all this are many, but they all lead to a more transparent, reliable world where various risks are reduced for all types of organizations.

To make this world possible, massively scalable public blockchains will be required. Private blockchains, which are the equivalent of walled gardens, will not offer the same benefits since all parties involved in reaching consensus on the state of a given ledger will be part of the same organization and may have incentives to change data or delete records under some circumstances.

To learn more about the benefits of public blockchains or to share your perspective, ideas or applications, join us at the London Blockchain Conference between 31 May and 2 June.

We are interested in hearing from anyone who has legal, legitimate ideas about how to use blockchain technology to reduce risk and improve efficiency within any type of organization. Register today to secure your tickets or to request a voice machine!

See: BSV Blockchain A World of Good

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