In the 19th century, the magnates of American industries became famous for harnessing tangible resources like oil and steel. Today, giant corporations are trying to achieve even more wealth by collecting consumer data. But now, as then, the benefits of accumulating such resources come with a significant business risk: overflow.

Like oil spills, data leaks – whether accidentally or through hacking – can cause significant financial, legal and regulatory damage to businesses and consumers, both legally and politically. Think of the collapse of Facebook earlier this year. In April, the phone numbers, full names, email addresses and locations of 533 million users were shared on a hacking forum, causing an outcry among consumers and governments.

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Facebook is not alone with its privacy issues. In 2020 alone, 1,001 data breaches were reported and more than 155 million people were affected by data exposure. These leaks are costly and time consuming for businesses. A 2020 report by IBM found that the average cost of a security breach is $ 8.64 million and typically takes 280 days to resolve, although these numbers vary by industry.

Despite the cost and PR issues, many companies will argue that the benefits of the data are worth the multi-million dollar risk. Research has shown that big data enables companies to make better strategic decisions, reduce costs, improve operational processes and better understand their customers – all of which are prerequisites for higher profits.

Blockchain is the savior

Avoiding security risks from not using data is not an option. So the question is: How can companies make the most of the competitive advantage of data without exposing themselves to undue risk of financial, legal, and PR disaster?

The answer lies in data processing on the blockchain that preserves data protection.

At first glance, this solution seems counter-intuitive. After all, blockchain transactions reach a public consensus and are designed to be transparent and publicly accessible – two properties that run counter to the data security goals of companies. It’s a blockchain paradox: users can share data to gain new insights that benefit society as a whole, or isolate data in protected silos to protect individual privacy.

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In recent years, the advent of privacy-friendly computing has offered a third option. Verifiable calculations allow insights outside of the main blockchain network to be publicly verified for accuracy, eliminating the risks of transparency. In addition, this security measure can be applied by integrating data protection-preserving computing as a second-layer solution and outsourcing work to external nodes without incurring additional burdens or costs.

In fact, the integration of this security measure means that companies can eat and eat their cake too. By integrating blockchain into their data management strategy, companies can significantly reduce the risk of a security breach and its associated consequences.

While there is limited research to maintain the value of second-layer computing, particularly with regard to privacy, the preliminary literature on blockchain-based security shows the technology’s potential as a protection. In 2020, a review published in the Journal of Sustainability found that:

“The integration of [blockchain technology] Industry can ensure the security and integrity of data and must be enforced to ensure data availability and privacy ”.

Companies that use data processing and other blockchain-based security measures not only benefit from improved security, but also have the opportunity to switch to improved interoperability in industries that have been plagued by the threat of data insecurity.

Health care is an example

In this area, the exchange of data between providers, healthcare networks and third-party researchers is of crucial importance. However, data protection regulations have made it difficult for patients to transmit information. Notably, many healthcare providers have held onto outdated fax machines for years because their advanced electronic systems are not compatible enough to consistently transmit patient information.

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These silos have a deterrent effect on healthcare innovation. As a team of German scientists noted in an article published in the Journal of Natural Partners in Digital Medicine in 2019:

“Hidden in isolated databases, incompatible systems and proprietary software, [healthcare data is] difficult to communicate, analyze and interpret. This slows medical progress, as these data-driven technologies – artificial intelligence, big data or mobile apps – cannot be used to their full extent. “

The potential that the team mentions is considerable. In the past few years, AI researchers have used patient data to develop remarkably accurate algorithms to aid doctors in making a diagnosis. For example, last year researchers trained a neural network to identify 26 of the most common skin conditions by linking it to more than 16,000 telepathology cases. This algorithm eventually turned out to be as accurate as trained dermatologists. A reviewer summarized the project:

“Although this tool is not approved for clinical use, deep learning-based diagnostic and clinical decision support tools are gaining acceptance in many medical specialties and are poised to change. How we experience medicine.”

In theory, data security already exists, but in practice (in) data security is seen as an obstacle to progress. Developing a teledermatology tool requires researchers to dig into a vast amount of data. However, sharing even small amounts of sensitive patient data is a privacy nightmare.

Think of the backlash that took place last year when Google partnered with Ascension, a major hospital chain, to launch Project Nightingale – a tool for finding patient information. The news sparked an immediate and overwhelming backlash when critics criticized the couple for sharing confidential medical records. Google and Ascension have pushed the criticism back, arguing that their data release complies with state privacy regulations. However, a Stanford University professor said in an interview with the Wall Street Journal:

“Some believe federal law is out of date, saying that the law’s protection has not kept pace with the technology sector’s growing demand for patient data.”

The point raised here is nuanced. The problem is not that companies are not complying with data protection regulations, but that the public has no confidence in these security measures. If healthcare companies really want to maximize innovation through the bold use of data, they have to stop securing the law and address people’s fears directly.

Imagine if healthcare providers had access to data security measures that use verifiable second-tier computing to securely share patient information without putting consumers – or their organizations – at risk. The security and certainty that technology offers will completely change the proverbial game. It will fuel innovation, stop malicious threats, and reduce the risk of data leaks.

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Takeaways

Too often, business leaders make the mistake of assuming that the benefits of blockchain are limited to funding. However, the security blockchain offerings could trigger a far-reaching change in opinion about what can happen when exchanging data. The calculation of data protection makes it possible to eliminate fear. It enables companies to imagine what they could achieve if they could get the most out of their data without fear of malicious interference.

That’s not to say that there won’t be any obstacles to implementing blockchain-based security measures as the norm – it certainly will. First thing mentioned: Executives need to understand the value that blockchain has outside of its stereotypical role in finance. Developers then need to create industry-specific products based on the secure computation of Layer 2 features. Ultimately, these products must be widespread in order to enable data exchange between companies.

Even one of these steps can take years. But extended schedule or not, the reality is that a vision of a blockchain-secured, data-driven future is possible. Privacy Computing is a real solution to data loss problems that industry leaders have struggled to resolve for years. We can see transformative innovation happening …