The technology behind the cryptocurrency Bitcoin, blockchain, has been receiving a lot of attention as financial institutions have been adopting it for safer online transactions. But before we dive into whether blockchains protect privacy, we need to first know what blockchain is and how it works.
What is a blockchain?
A blockchain is a distributed database which maintains a list of records called blocks. Each of these blocks has a timestamp and is linked to a previous block.
Blockchains are known as append-only data store which means that data can only be entered into the store but it can’t be taken away.
As blockchains are distributed database, blockchains are maintained by a peer-to-peer network of nodes where every node has a copy of the blockchain and can equally add to the chain. Nodes in the network can pick up when other nodes publish data.
One of the main factors which make a blockchain unique is that once the data has been entered into the blockchain database, it cannot be changed without the alteration getting detected and rejected by all the other nodes in the network. For data that needs to be trusted, this is a useful implementation as it is an indicator that the data hasn’t been tampered with. Removing data from the blockchain can have implications as it is hard to do so and it can have unpleasant side-effects.
Is your privacy protected by blockchains?
Every transaction made in a blockchain is recorded in a decentralized model. All previous transactions that are related to the current transaction will be visible (completely transparent) which is one of its main strengths. This makes it easy to validate and track transactions. As transactions include personal data, it is widely possible that the information can be accessed. Even bitcoins which use this network asks its users to have multiple bitcoin addresses and to not trade between those addresses as it can be easily linked.
Completely protect your privacy with VPN
Even if you have to use a blockchain network, you can remain anonymous to the public and the eyes of the government by using a VPN service. As IP addresses can be changed, it is almost impossible to link a person to a specific IP address as there are too many parties that are connected to the same network. As VPNs encrypt their data, it becomes harder for hackers to know who you are.
You will never know who has access to your personal data so it’s always better to be safe than sorry. Always use a VPN when browsing the internet even if the website states that it is using an extremely safe and secure network.