The Impact of Blockchain in Data Management and Data Security

The Impact of Blockchain in Data Management and Data Security

Naveen Joshi 25/06/2019 2

With its tamper-free data storage, cryptographic validation, and immutable digital assets, blockchain stands tall amongst other contemporary data management tools. Blockchain and data management is a winning combination in this rapidly changing digital environment.

Collecting, organizing, storing, securing, and using data was never so difficult and challenging as it is in the digital age. The term data management popped from nowhere with the widespread presence of the Internet and digital technologies across businesses. Traditionally, organizations stored their confidential data on paper files or folders. But today, the case is just not the same. Businesses are going through digital transformation, where they encounter high volumes of data generation in a matter of a few seconds. Obviously, traditional data storage and management would no more be an option to store such large volumes of data. Having realized this, companies are jumping onto the latest approach of storing data. Wondering what that is? Storing data digitally! But unfortunately, data residing on digital platforms or on the cloud too attracts hackers. Organizations have, therefore, identified an infallible data management tool that not only stores almost any kind of data (structured, semi-structured, or unstructured) but also secures the collected data against hacking. Now, here’s where the concept of blockchain makes sense to the whole data management process. Blockchain and data management, although individually being known concepts by now, is relatively new as a fusion in the tech space.

Understanding the Link between Blockchain and Data Management

No alt text provided for this image

Before understanding the relationship between the two, let’s first comprehend what blockchain is all about. In plain words, blockchain is a digital database for collecting, storing and retrieving data. What makes blockchain really special and unique is its decentralized approach to storing digital assets. Besides, with its advanced and sophisticated hashing and validation methods, the technology is extraordinarily prominent for securing the stored data.

In traditional data management, authorities having credentials of the centralized data storage system can make alterations quickly and easily. These changes would directly reflect on the centralized database. When any user logs into the storage system for data retrieval, she gets to check the changes made but she will not get complete information on the transparency of the changes made in the past. If by any means or chance, anyone gets hold of the account permissions or log-in details, they can steal all the sensitive information, located all in one place. Besides, these data management tools or applications pose several technical concerns, causing impediment to their performance while dealing with huge chunks of data and making implementation costly.

Enter blockchain. The cutting-edge technology stores digital records on a peer-to-peer network, allowing only the authorized participants on the network to access, view, alter, add, or delete any content. Before getting access to the network, the participants have to enter difficult-to-hack authentication code sent to them. Here’s more to how blockchain outweighs the traditional data management tools:

Strengthening Data Security 

Expecting data to remain unaltered and secured, right from when it was inserted upto its use, from a traditional data management system is complicated. Keeping data away from getting corrupted becomes a huge challenge then. The digital age has given freedom to both malicious hackers and also trustworthy participants to view and share data easily. But with blockchain coming into play, these issues get eliminated and fixed.

We already have mentioned that blockchain is tamper-free and immutable, which means that the records stored on it are resistant to modifications. To put it down in simpler words - each data record added to a blockchain is immutable. And under no circumstances can the record be altered or erased. Therefore, participants can easily track the history of data records. Or, if anyone tries to mess with the records, then the participants will be notified about the change in real-time.

Further, to ensure 100% security of the stored data, it is essential to take ultimate care of the access rights of the storage system. Who can access, view, monitor, add, delete, alter, or update, should be thoroughly known to the data administrator. Undertaking these tasks are not only cumbersome but also time-consuming and, most importantly, extremely vulnerable to human mistakes. But with blockchain, things get a lot different. Let’s check the impact of blockchain on data security.


Simply explained, cryptography, also known as encryption and decryption, is a process of disguising the data and then disclosing it after receiving the right code. The prime aim behind this advanced method of data security is to ensure that only the intended members get access to the stored data. A mathematical algorithm encrypts the data, creating a piece of information that has no meaning. This meaningless information is converted to its original form only after the process of decryption is carried out. Due to such strong security walls, it becomes highly impossible for outsiders (read hackers) to sneak in and steal the data.

Decentralized Nature of Data Storage

Unlike the traditional data management systems, data on blockchain is stored across multiple systems, having no central authority to control. Being able to store data on multiple systems, companies needn’t fret even if a couple of systems breakdown.

Improving Data Quality

As mentioned before, to access or add any new block to a blockchain network, the concerned person has to validate herself. If she fails to prove her identity as a blockhain participant, access will be denied. When the collected and stored data is tamper-free, secure, and accessible, businesses can gain valuable and meaningful insights when analyzed with advanced analytics tools. This boils down to the fact that the quality of data, in terms of exactness, reliability, security, or simply how well its purpose has been served, enhances with the help of blockchain.

Taking into account the hyper-connective, warp-speed, technology-enabled world, companies can’t afford to not follow the trends that cover the market. Data being the latest trend for achieving digital transformation, companies are striving to gather more and more data and also to make the most out of it. But for everything to fall in place, it is utterly important that companies manage, organize, and also secure the data that is collected. While storing and managing a voluminous amount of data is difficult, securing the same is even more arduous. Besides, the proliferating cyberattacks and data breaches have created a sense of anxiety in companies today. Considering the promise of authenticity, integrity, and immutable storage, it is clear that the disruptive and revolutionary technology, blockchain, will very well fill the gaps in traditional data management.

Share this article

Leave your comments

Post comment as a guest

terms and condition.
  • Claire Hodge

    Blockchain leverages consensus mechanism for validating transactions.

  • Mike Inskeep

    The utilisation of cryptography eliminates the vulnerability of a centralised system where an entity or a person gains access to data.

Share this article

Naveen Joshi

Tech Expert

Naveen is the Founder and CEO of Allerin, a software solutions provider that delivers innovative and agile solutions that enable to automate, inspire and impress. He is a seasoned professional with more than 20 years of experience, with extensive experience in customizing open source products for cost optimizations of large scale IT deployment. He is currently working on Internet of Things solutions with Big Data Analytics. Naveen completed his programming qualifications in various Indian institutes.

Cookies user prefences
We use cookies to ensure you to get the best experience on our website. If you decline the use of cookies, this website may not function as expected.
Accept all
Decline all
Read more
Tools used to analyze the data to measure the effectiveness of a website and to understand how it works.
Google Analytics