Paul Mampilly, an American investor, and former Wall Street hedge fund manager stated last year that he would be willing to have a chip placed in his body if it meant his life would be easier. Mampilly’s bold statement came from him not wanting to waste time in line getting his state ID renewed.
How does this relate to blockchain? Other than cryptocurrency, blockchain technology can be used to protect a person’s personal and financial information.
Before describing how it can protect a person’ s personal information, let’s explain what blockchain technology is, and how it works. For starters, it’s a list of records that are linked together through a series of unreadable code, also known as cryptography.
Because of this link, a person can find his or her information in one location. Therefore, the time it takes to process an individual’s personal information becomes shorter, and people get out of places much quicker. For instance, a thirty-minute wait to get your state ID renewed would turn into a two-minute wait thanks to how blockchain works.
In addition to linking data together, blockchain technology records data used in transactions. Afterward, a person’s personal information gets locked away to prevent it from being stolen.
Because blockchain technology locks away someone’s personal data, it does a much more better job of securing their information from thieves. Therefore, making identity thief much harder to pull off.
These reasons are why Paul Mampilly stated he would ditch his privacy for blockchain.
While one could understand Paul’s excitement over the potential this sort of technology offers, it does come with flaws that hackers can use to their advantage.
Yes, blockchain technology gives people the power to decide what information they want to share and information they don’t want to share. Also, it does a much better job of protecting a person’s data from identity theft.
However, there’s still a way for someone to steal people’s data, even with blockchain. Earlier this year, a Ukrainian group, Coinhoarder, took fifty million in cryptocurrency from Blockchain.io users.
According to an article in Fortune, the group pulled it off by purchasing Google ads on popular keyword search terms related to cryptocurrency. Once they bought them, Coinhoarder used the search terms to lure unsuspecting victims to click on links to websites disguised as credible domains for Blockchain.info wallets.
Furthermore, vulnerabilities in blockchain software can cause people’s personal information to get stolen. One example of this was the Parity Wallet Breach scandal that happened last year.
A UK-based start-up known as Parity discovered a vulnerability in their wallet software, which resulted in at least 150,000 others getting stolen from user accounts. Near the end of the year, the company found out that the ether accounts were worth close to over a million dollars.
Even worse, the start-up learned that the money in 70,000 of those accounts had been cashed out. Meaning the business couldn’t recoup the financial losses that occurred during the breach. What’s worse about these breaches is there’s a low chance of finding the person(s) who committed the crime once cryptocurrency gets converted into real money.
While blockchain technology offers some benefits that make people like Paul Mampilly go crazy over, it comes with drawbacks that can put people’s financial, or worse, personal information at risk. In the future, let’s hope the negatives that comes with blockchain improve so more people can use it without fear it’ll get breached.
Because, there’s potential for blockchain technology to revolutionize how people protect their personal information. If you enjoyed this content, share it with your friends and family on social media.