Applications of Blockchain in Data Management

Blockchain technology has enormous potential to build the internet systems of the future and shape the business world in new ways. A blockchain is a digital, decentralized public ledger designed to record every data transaction on its network. The blockchain network can track orders, payments, and more. 

As we all know, business runs on information. Therefore, information must be received quickly and should be accurate. Blockchain is ideal for delivering information as it provides businesses with fast, secure, and accurate information. Blockchain is widely deployed in various sectors, such as finance, education, healthcare, etc. And blockchain also plays an important role in data management.

Application of Blockchain in Data Management

Below are some important applications of Blockchain in Data Management:

1. Data Security: Blockchain provides excellent data security and integrity. Security methods such as encryption are useful in combating data breaches, but they do not provide complete protection. Many systems of big organizations with the highest level of security are penetrated by hackers. However, blockchain technology helps organizations by providing better protection against data breaches. Blockchain uses hashing techniques to store data securely, which helps the company in securing data and also helps in data sharing. 

• In Blockchain, each block contains the hash of the previous block’s header and a hash of the transactions in the Merkle tree of the current block.
• In this way, each block is cryptographically chained to the next block.
• If there is any change in any block, then the hash value needs to be changed in the next block and similarly hash values in all the connected blocks need to be chained.
• The system is transparent and changes to the records are monitored closely.

2. Data Sharing: Data sharing plays a very important role in company success. The fundamental characteristic of blockchain is decentralization, which allows easy and secure data exchange between organizations. Information can be stored in a special ledger in a blockchain database that keeps the information secure. Nowadays many small organizations have also started using blockchain in data management for easy, secure, and fast data exchange. 

3. Data Traceability: Traceability plays a very major role in organizations as it helps in tracking and in maintaining records. It means how easily the records can be traced in terms of history, location, or application. 

• The food and pharmaceutical industries use blockchain technology to track their food and medicines from the moment they are harvested or manufactured until they finally reach the customer. 
• Now a day many other organizations use blockchain technology to track their product delivery and also help in data management.
• As long as the version number of the last block is saved, it is easy to verify whether each transaction has been tampered with.
• As blockchain is a linear structure, the historical chain of events can be easily followed to determine what has happened.

4. Immutability: Blockchain provides the Immutability of data to the company, which helps the company protect information. Due to the decentralized structure of blockchain technology, data cannot be tampered with, so any changes will be reflected on all nodes, so no one performed fraud here, hence it can be claimed that transactions are tamper-proof.

• To tamper with a transaction, all the blocks after the transaction must be recalculated and the change after recalculation must be accepted by all other nodes.
• To do this tamper, it requires to have more than 51% of the system’s computing power. 

5. Efficiency: Efficiency plays a very important role in any business. The company uses blockchain technology for efficiency because blockchain eliminates any third-party interference between transactions and also eliminates errors, which makes the system more efficient and faster. Therefore, Billing just got easier, smoother and faster.

6. Data Consistency: Blockchain adopts a consensus mechanism to solve the BFT problem caused by the participation of the multiple nodes where if there is any delay between different nodes, the communication network will be interrupted, malicious nodes can falsify the information which will seriously affect the consistency of the data in the network. 

• The consensus mechanism ensures that all nodes participate in the production and the verification process of the data block.
• The newly generated block must be verified by most of the nodes in the network before it can be written to the ledger.

7. Automatic Verification: Verification is very important for the company, which help in protecting data. Blockchain technology redefines and implements smart contracts. To prevent the entire blockchain system from being attacked by vulnerabilities and malicious codes, the smart contracts run in isolated sandbox environments rather than directly on blockchain nodes. 

• The company uses blockchain technology for verification because blockchain technology stores information in a decentralized manner, allowing anyone to verify the accuracy of information using zero-knowledge proofs, through which one party proves the accuracy of data to another without revealing anything related to data.

8. All nodes participation: The fundamental feature of blockchain is decentralization where the peer-to-peer network is used to maintain the system. All nodes joining the blockchain jointly manage and maintain the data resources on the chain, which can easily retrieve data and participate in data authentication. No restrictions on joining and exiting of nodes in public chains such as Bitcoin and Ethereum.