Data protection plays a major role in many blockchain-based project ideas, as well as presents issues which are not always easy to resolve.

As we all know, the rapid advances in digital technology over the past several decades have also brought to the fore new challenges around data privacy and security. Hacks, identity theft and other digital violations of privacy — in such a short span of time, these have become commonplace.

Addressing the challenge of how to secure the internet has been a primary motivation for those who are members of the Blockchain community. As Blockchain technology re-architects our digital infrastructure, it also reformulates the security equation. 

Blockchain decentralisation

October 31st will be a celebration for the cryptocurrency community to mark the anniversary of the Bitcoin whitepaper originally published by Satoshi Nakamoto on October 31, 2008. One of the drivers for the development of a trustless peer-to-peer electronic cash system was the failure of digital currencies that relied on a central authority to verify payments, such as e-gold. Only a system devoid of a single point of failure – a decentralised system – could resist adversaries trying to take it down.

Today, decentralisation is widely accepted as one of the key value propositions of cryptocurrencies. In a decentralised world, game-theoretical incentives take over the role of a central, governing authority.

A decentralised network run and secured by thousands of computers around the world can guarantee availability – in fact, Bitcoin has achieved more than 99.98% uptime since its inception and 100% over the last six years. An additional advantage of decentralised systems is their improved collusion resistance: Coordination in a distributed network is harder than in centralized ones. This reduces the chance that a group of network participants (e.g. miners) is able to work together to gain a competitive advantage (e.g. through selfish mining).

Weighing the potential for decentralisation

The promise of blockchain is decentralised governance. However, managers need to carefully consider two things. First, decentralised governance is not a necessary feature of blockchain; it needs to be enacted must like how Alacrity Network has implemented it.

Decentralised networks aim to eliminate the need for a central authority. Rather than to hand over control to a central actor, decentralised networks are run by the participants themselves. This means that the entire system becomes more distributed.As a result, any processes underpinned by decentralised technology become significantly harder, or nigh impossible, to shut down primarily due to the elimination of a single point of failure in the system.

Moving forward

Those who are able to understand and harness the potential of decentralisation will be well positioned in the future. Moreover, the widespread interest in the technology from both corporations and governments suggests that it may well be here to stay.