Blockchain enhances security while decreasing friction
Cyber security, like physical security, is always a trade-off. We need to have a system that is secure enough to keep out intruders, while not making it so difficult to get in that legitimate users stay away from it.
It seems that it’s always a precarious tight rope walk where you don’t want to err on either side.
Blockchain to the rescue!
I recently had the opportunity to talk with the CEO of a company that uses blockchain to enhance security while at the same time decreasing the friction that is often associated with keeping the bad players at bay. The company is called ShoCard (ShoCard.com) and it provides a blockchain-based system that can be used in the financial, travel, and other industries.
ShoCard CEO, Armin Ebrahimi told me that they have embraced a decentralized system that is better than a legacy-based system using a fixed database. This change in where and how sensitive data is stored enhances security. A blockchain-based system will keep sensitive information in different locations.
One of the big dangers of putting all the data in one central location is that the point of containment is, what security experts call, the “honey pot.” Once the bad players attack and access the central point, they have access to all data.
This is what happened with the recent cyber attack at Equifax. Once the bad players had access to their central database, 143 million accounts were subject to attack and subsequent breach of very sensitive information.
This is in contrast to storing sensitive information on a variety of nodes. In a decentralized approach, the cyber thieves would have to attack all the nodes, which could be hundreds or thousands, to get the data. This becomes a task so daunting and nearly impossible that it increases security far superior to that on a centralized system.
Blockchain applications for finance
The applications for this in finance are strong for both the end users and financial professional services.