Make certain that your business-critical data maintains its integrity whilst being securely stored on multiple copies of the BSV blockchain
Immutable storage of data is critical for some organisations—including financial institutions—who require that once created and stored online, the data cannot be modified or erased by anyone. Tamper-proofing ensures that data is protected from modifications, and the immutable BSV blockchain is perfect to store this critical data.
Organisations often need to comply with legislation such as (Commodity Futures Trading Commission) CFTC 1.31 which specifies that electronic records must be kept for five years and must be accessible for inspection throughout the period. FINRA Rule 4511 which specifies that books and records must be retained for a period of time, be ‘non-rewriteable and non-erasable’, and if not otherwise specified, should have a retention period of 6 years. The Securities Exchange Act (SEA) Rule 17a-3 specifies how long records and documents relating to a broker-dealers business must be kept.
There are many other businesses who have similar requirements for document retention and storage—so that documents can be accessed and read, but not modified. Process documents, statutes, legal documents, once published are seldom amended. But the challenge is that databases can be compromised, altered, and the audit trail tampered with so that it becomes all but impossible to trace any bad actors, or modifications to the data store. Auditors potentially have a difficult job tracing at what stage did the data store become compromised, and how they can roll the data back to its pre-compromised state.
Modifying every copy of the blockchain around the world becomes an almost impossible task for potential hackers who would need to coordinate a simultaneous attack across all nodes in the network that broadcast blocks. An attack such as this would involve over half of the nodes in the network—the so-called 51% attack. The Bitcoin White paper section 11 defines how these alternate chains cannot work.
Each mining node on the network is invested in producing valid blocks with transactions, so that they can agree to place the block onto the chain and quickly move on to processing the next block and earn their payment for ‘winning’ the right to process that block. Miners have no interest in chasing invalid blocks. There is no reward for the effort and the block would not be added to the chain. It would make no sense for them to accept a compromised block.
The way that the blockchain works is that data is broadcast onto the blockchain network and added to a pool of transactions. These transactions can potentially contain any type of data that can be stored online such as documents, financial transactions, medical data, Internet of Things sensor data—practically anything can be stored on the blockchain.
The pool of transactions is organised onto a block which is protected using cryptography. The block is timestamped and arranged chronologically in a sequential chain. The new block gets a timestamp and hash. Copies of the blockchain are sent to all nodes across the network. If a hash does not match the hash on other copies of the blockchain, the block will be rejected by other honest nodes across the network. All copies of the blocks can validate the hashes against each other and trust that the latest block placed on chain is valid and trusted.
As the copies of the blockchain are distributed across every node, the new length of the chain is validated across each miner who then moves on to the next block. Each block contains a cryptographic reference to the previous block to demonstrate that the blocks can indeed be trusted. The blockchain has been validated by every other honest node on the network.
So, what happens if you realise that your immutable document has been stored online—but it has an error in the document you posted? Governance processes will address modification of documents and the need to provide transparency in actions. Although the documents cannot be modified once posted onto the ledger, an amendment can be posted referring to the change to show transparency and to maintain records of the amendment. This process keeps the entire chain honest, with valid transactions that can be traced all the way back to the beginning of the line. And that is surely an auditor’s dream.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
