Blockchain began as the foundation of crypto currencies, functioning as a virtual ledger capable of recording and verifying a large volume of digital transactions. Of course, the applications of a technology that is transparent, verifiable, decentralized, and resistant to fraud are practically limitless.
When it comes to data governance, Blockchain is critical. Blockchain technology frequently facilitates and supplements data governance rules. Some of the fundamental pillars of Blockchain include:
Data Storage – Blockchains are ledgers where all data is stored in its current form.
Decentralized Data – In most data storage models, a centralized authority controls and grants access to the data. There is no central authority in the case of Blockchain. Instead, the data is divided into ledgers, each owning a portion. The combined Blockchain network contains all of the data, removing the need for a centralized authority.
Blockchain in the Data Governance Sphere
In many ways, data governance and Blockchain complement each other. Data governance is exemplified by the General Data Protection Regulation (GDPR). Its primary goal is to comply with data protection regulations.
The use of Blockchain eliminates a centralized authority to manage data. It offers numerous features to improve security, such as transparency and consistency, making it the most preferred option for data management. It has the potential to accelerate data governance in a variety of situations, including:
Permanent Record – While this can be an advantage and a disadvantage, the Blockchain network is immutable for keeping records. No data can be deleted or modified by a single authority, ensuring the data’s long-term viability.
Democratic Setup – Unlike traditional methods of handling data, where a single authority holds power, Blockchain allows for a democratic setup where everyone who follows the “proof-of-stake” protocol and solves the computing equation has an equal right to the data.
Compliance – Because of the utmost importance placed on transparency and privacy, Blockchain technology is compliant with the major regulations worldwide, ensuring that businesses do not have to worry about running afoul of the law.
Traceability – The data stored under the Blockchain network is easily traceable, with every record lodged in the ledger. Traceability makes it a remarkably convenient and reliable method of data storage, reducing the chances of any potential misuse.
Consistency – The information is stored using computer equations, ensuring greater consistency and a governance network’s key element.
Smart Contracts – Perhaps the most discussed aspect in recent times in the Blockchain world is Smart Contracts. These are predefined statements, such as “If/What If,” encoded in the Blockchain network and processed by the computer. The Blockchain network’s participants all agree on these predetermined statements, resulting in increased speed and efficiency. Furthermore, it strengthens the already robust Blockchain network by making smart contract encryption more difficult, thereby protecting sensitive data within the network.
Differences
However, despite Blockchain’s numerous advantages, there are a few drawbacks. To reap the full benefits of Blockchain, it is critical to be aware of its flaws before making the switch. Some of Blockchain’s shortcomings in data governance are as follows: –
Storage Costs – Blockchains store everything. The various benefits provided by Blockchain, ranging from transparency to security, are only possible because data is stored. In the case of Blockchain, every single transaction is recorded, which becomes problematic with large amounts of data. It is costly to maintain dedicated servers, which raises operational costs.
Permanent Record – There is often sensitive data that needs to be protected or deleted after its use. Even though Blockchain technology is pretty good at protecting data, it has trouble deleting it. The data is recorded in ledgers, so it is permanent. However, many new platforms offer a “tombstone” method wherein the data stored is removed from the central database, offering a viable solution to companies.
Latency Issues – A Blockchain network’s biggest drawback probably would be the latency issues. Since the operation behind many Blockchain works through the proof of work method, it runs into network issues and higher latency, slowing down the network.
CONCLUSION
Even though the Blockchain network has many applications, there is a complex relationship between Blockchain and Data Governance. Blockchain practices help to improve the fundamental principles of data governance. Coinbase is already utilizing Blockchain in conjunction with data governance, offering cryptocurrency exchange and insurance against employee theft and hacking. With improvements in speed, efficiency, transparency, and consistency, many organizations are switching to Blockchains to store and manage their data, and for good reason.
