Blockchain Technology in Cybersecurity

Safalta Expert Published by: Rohan Chaudhary Updated Thu, 15 Feb 2024 01:47 PM IST


Blockchain technology was officially introduced in 2009 with the release of its first application- the Bitcoin cryptocurrency. Forecasts suggest that spending on blockchain solutions will continue to grow reaching almost $19 billion US Dollars in 2024 and is expected to be $469.49 billion US Dollars by 2030. According to a report by WEF(World Economic Forum), as much as 10% of the global GDP will be stored on blockchain by 2025. 

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Blockchain technology is an advanced database process that allows the sharing of information transparently within a business network. A blockchain database stores information in blocks that are connected in a chain. Cybersecurity is being helped by Blockchain Technology.  Blockchain technology was officially introduced in 2009 with the release of its first application- the Bitcoin cryptocurrency. Forecasts suggest that spending on blockchain solutions will continue to grow reaching almost $19 billion US Dollars in 2024 and is expected to be $469.49 billion US Dollars by 2030.

Source: Safalta

According to a report by WEF(World Economic Forum), as much as 10% of the global GDP will be stored on blockchain by 2025. 

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Table of Contents

  •  Understanding of Blockchain Technology

  •  Cybersecurity

  •  Blockchain technology in Cybersecurity

  •  Application of Blockchain in Cybersecurity

  •  Major Pros

  •  Major Cons

  •  Blockchain cybersecurity uses


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Understanding of Blockchain technology


1. Decentralization and Distributed Ledger

Decentralization in blockchain is the transfer of control and decision-making from a centralized entity, which could be an individual, an organization, or a group of organizations, to a distributed network. 
A Distributed ledger can be described as a book of any transactions or contracts maintained in decentralized form across different locations and people, eliminating the need for a central authority to keep a check against manipulation.

2. Cryptographic Security

Cryptography is a method of securing unauthorized access. It is used to secure transactions that take place between two nodes in a blockchain network. Cryptography and hashing are two main concepts of blockchain. Cryptography mainly focuses on ensuring the security of participants, and transactions, and safeguards against double-spending maintaining the integrity and security of blockchain. Blockchain is developed with a different range of cryptography concepts. The core concept of cryptography includes Symmetric encryption and Asymmetric encryption. 

3. Immutability and Tamper-proofing

The ability of a blockchain ledger to remain unchanged, unaltered, and memorable is called Immutability. One of the key elements that make blockchain immutable is cryptographic hashes. That’s why blockchain is immutable. The most popular hash function is SHA-256 i.e. Secure Hash Algorithm 256. 
A tamper-proof ledger is essentially any system of records that has the fundamental properties of a distributed ledger. Blockchain ledger relies heavily on security, that’s why all blockchain ledgers are tamper-proof ledgers.

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Cybersecurity is the technology, strategies, or practice of protecting organizations and individuals from digital attacks that aim to obtain, alter, and destroy the user's sensitive data, confidential data, and the entire network of organizations via viruses and malware to extort money. As the data in this digital world is increasing day by day, the risk of data breaches by cyber attackers is also increasing simultaneously. India's National Cybersecurity Policy was introduced in 2013 to create a secure and strong cyberspace. Since then, cybersecurity has evolved tremendously with time with increasingly complex cyber-attacks.
Here are some stats regarding Cybercrime and Cybersecurity:
- India received 2138 weekly attacks per organization in 2023, which is a 15% rise since 2022. 
- According to a 2023 report, India is the most targeted country globally, facing 13.7% of all cyber attacks.
- Poland has the strongest cyber security(90.83), according to the National Cyber Security Index.
- Malaysia has the highest score of 79.22 out of 100, according to the National Cyber Security Index in the Asia-Pacific region.
- The Indian cybersecurity market from 2023-2028 is expected to grow at a compound annual growth rate of 18%.

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Blockchain Technology in Cybersecurity

Blockchain provides a different path to increased security that is less traveled and less inviting to cyber criminals. This method more successfully verifies the ownership and integrity of data while lowering risk factors and offering strong security. It can even eliminate the need for some passwords, which are frequently described as the weakest link in cybersecurity. Blockchain’s decentralized nature and digital ledger capabilities provide secure and tamper-proof access control mechanisms, reducing the risk of unauthorized access to sensitive data. 


Applications of Blockchain in Cybersecurity

In Cybersecurity, the CIA Triad model acts as a reference to assess the security model of an organization. The triad consists of:
1. Confidentiality
2. Integrity
3. Availability

Confidentiality- It means to ensure that only interested and authorized parties access the appropriate data. Full encryption of blockchain data ensures that the data will not be accessible by unauthorized parties while flowing through untrusted networks.

Integrity- Blockchain's built-in characteristics of immutability and traceability help organizations ensure data integrity. Consensus model protocols can further help organizations implement mechanisms to prevent and control ledger splitting in the event of a 51% cyber control attack. 

Availability- In recent times, cyberattacks attempting to impact technology services availability are on the surge with DDoS(Distributed Denial of Service) being the most common type of attacks. DDoS attacks are costly as the attacker attempts to overpower the network with a great number of small transactions. Blockchains have no single point of failure which decreases the chances of IP-based DDoS attacks, disrupting the normal operation. Data remains available through various nodes and thus full copies of the ledger can be accessed at all times. The combination of multiple nodes and distributed operation makes the platforms and systems strong. 

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Major Pros

Secure data storage and processing- Any change that is documented on the blockchain is transparent and unchangeable, making blockchain records permanent. As a result, blockchain-based data storage offers greater security than conventional digital or paper-based records. 

User confidentiality- Participants in the blockchain network have a high level of confidentiality because user authentication is done using public key cryptography. 

Safe data transfers- Fast and secure data and financial transaction processing is made possible by the blockchain. As a fundamental component of blockchain technology, smart contracts lower the possibility of human error and potential weak points by automatically executing agreements.

Data transparency and traceability- With digitally signed and dated transactions, the blockchain enhances cybersecurity by making it simple for network users to track transaction history and examine accounts at any point in time. Additionally, this feature enables a business to have accurate data regarding the distribution of its products or assets.
No single point of failure- Blockchain systems are decentralized and thus a single node failure doesn’t affect the entire network.  Because multiple ledger copies are maintained, the system remains secure despite DDoS attacks. Private blockchains are unable to provide this benefit.

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Major Cons

High operational and customization costs- A blockchain network requires a large amount of storage and processing power. When compared to current non-blockchain systems, this might result in higher marginal costs.

Adaptability challenges- Even though blockchain technology can be used in practically any industry, businesses may encounter difficulties with integration. For example, supply chain systems are difficult to secure because re-implementing supply chain logic using a blockchain may take a long time.  Blockchain applications can also require replacing existing systems, so companies should consider this before implementing blockchain technology.

Scalability challenges- The number of transactions per second and block volume are limited differently on blockchain networks. To ensure safe data storage without affecting the functionality of your product, your blockchain system must manage all security-related transactions and data. It is recommended to check the scalability of the blockchain platform you want to use as the basis for the solution and consider the expected load in advance. 

Reliance on private keys- Blockchains rely on private keys, which are long chains of random numbers that a wallet automatically generates. Private keys are used for interacting with the blockchain and ensure security. Key management is a crucial security concern because it can result in the permanent inaccessibility of important encrypted data if a user loses their private key.

Lack of clear governance- The operation and use of blockchain technology isn’t well regulated globally. To ensure that the system complies with applicable laws and regulations in your area and industry, you must continuously monitor changes to these laws and regulations. 

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Blockchain cybersecurity uses

Maintaining cryptocurrency integrity
Securing banking assets
Protecting patient health records
Rebuilding government cybersecurity protocols
Safeguarding military and defense data
Fortifying Internet of Things (IoT) devices
Looking ahead, the future of blockchain in cybersecurity appears promising. Some key trends and opportunities include:

1. Interoperability- Interoperability standards between various blockchain networks are being worked on. This will improve cybersecurity capabilities by facilitating easy data sharing and teamwork.

2. AI and Blockchain integration- The combination of artificial intelligence (AI) and blockchain can enhance cybersecurity by enabling intelligent threat detection, anomaly detection, and predictive analytics.

3. Blockchain in IoT security- Blockchain has the potential to be extremely important in securing Internet of Things (IoT) ecosystems given the increasing number of IoT devices. For the purpose of maintaining device identities, data integrity, and secure communication, it can offer a decentralized and trustless infrastructure.

4. Blockchain powered Cyber threat intelligence- Blockchain technology can help organizations share and verify cyber threat intelligence, allowing for quicker and more efficient responses to new threats.

Does Blockchain technology offer complete protection against cyberattacks

Blockchain is not free from cyberattacks, no technology is. Blockchain is very secure because it is tamper-proof and decentralized, but it can still be vulnerable to social engineering attacks, smart contract vulnerabilities, and implementation errors.

Can blockchain help prevent data breaches and unauthorized access

Yes. By ensuring data integrity and offering a tamper-proof record of transactions, blockchain can improve data security. To stop data breaches and illegal access, it's crucial to put extra security measures in place like encryption, access controls, and frequent security audits.

Are there any industries where blockchain has already made significant contributions to cybersecurity

Yes, a number of sectors have already adopted blockchain technology for cybersecurity. Blockchain has shown significant potential in enhancing security and trust in a number of industries, including identity verification, supply chain management, healthcare, and finance.

Is blockchain technology accessible for small businesses or organizations with limited resources

Yes, companies of all sizes are finding it easier and easier to utilize blockchain technology. A private blockchain network's development and implementation may require a lot of resources. However, companies can use public blockchain platforms to benefit from the technology without having to make large infrastructure investments.
Furthermore, a lot of blockchain-as-a-service (BaaS) companies provide affordable, easy-to-use solutions that let small businesses take advantage of blockchain's cybersecurity features

Are There Any Regulatory Challenges In Implementing Blockchain for Cybersecurity

Yes,the implementation of blockchain for cybersecurity does come with regulatory challenges. Regulatory frameworks are being created to address issues with data privacy, compliance, and cross-border transactions as technology advances.

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