Blockchain technology is incredibly secure by design. As the technology platform behind cryptocurrencies, you should expect a healthy dose of powerful encryption in blockchain networks, but there’s more to blockchain’s data security story.
Is blockchain safe to use?
Blockchains manage a large-scale record of transactions and additional data wrapped in several layers of data security. As a result, these systems are generally regarded as safe and secure.
A blockchain is a digital ledger of transactions managed and updated by a distributed network of computers. It is easy to read the ledger and to add additional data to the chain of transactions, although each new transaction must clear several security hurdles before it is added to the blockchain. Nobody can change or delete existing data. Any attempt to tamper with the ledger is easily traced back to the prospective hacker, who then typically loses access to the network.

Another popular block-minting architecture is known as proof of stake. Here, transactions are validated and baked into data blocks by existing holders of the blockchain’s digital tokens. Data validators in this system must make the choice of staking their tokens on the validation system. You can’t sell, burn, or give away tokens that are being used in this way, but you earn rewards in the form of newly minted data blocks. Staking more tokens gives you a greater chance of earning the next minting reward.
This method puts less stress on the environment, but critics like to point out that large token holders can exert an unreasonable amount of control over this type of blockchain network. If you see blockchain technologies and digital currencies as a disruptive alternative to old-school financial institutions and payment systems, proof-of-stake blockchains can’t offer the same promise of truly decentralized operations. The central control constitutes a single point of failure, and that’s a weakness that can be more easily attacked by bad actors.
No financial system or data platform is free from security issues, and blockchain is no exception. Blockchains are not unhackable -- it’s just very difficult to breach them.
Blockchain security applications
Beyond the well-known examples of blockchain-based cryptocurrencies and other decentralized finance applications, blockchain networks can be used with other stores of sensitive information where bulletproof data security is an absolute must.
Blockchain in cybersecurity
In a general sense, blockchain ledgers can protect any stream of transactions, measured data, personal information, or business secrets. The blockchains used for each of these data streams would be quite different, of course.
A mobile app could manage payments, much like a normal credit card, using a public blockchain focused on financial data. An Internet of Things (IoT) device can collect data locally, pre-process it into a smaller bundle of data that’s ready for deeper analysis in a data center somewhere, and then use an Ethereum-like smart contract blockchain to submit that package and perhaps take action on the results.
Blockchain in data security
Blockchain in data security
Years down the road, personal data such as Social Security records, driver’s licenses, and employment histories could be managed by some sort of blockchain network. It will be up to voters and authorities to determine how public or private this network should be and whether a private personal data solution belongs under government control.
Healthcare security belongs in the same discussion, and it remains to be seen how comfortable we are making medical records available in a digital network with global reach -- even if the data itself is securely nestled in the usual layers of security protocols.
These are just a few examples of data security and cybersecurity uses for blockchain systems. Others will surely pop up as inventors and entrepreneurs turn their talents toward the blockchain space. We have only just begun exploring what these immutable data ledgers can do.



















