How blockchain can save consumers from a hack like Equifax

Cyberattacks could be more difficult to execute on systems running on blockchain.

Hacking of personal information could become harder on blockchain

Last week’s reported Equifax breach compromised personal information of over 40% of the U.S. population. Hackers accessed Social Security numbers, birthdates, addresses, credit card numbers and other sensitive private data. Equifax reports that the breach began as early as mid-May 2017. It wasn’t discovered until July 29. The company says hackers discovered and leveraged a vulnerability in a web application. 

The Impact

Equifax, along with Experian and TransUnion, make up the big three credit reporting agencies. Together, they serve as gatekeepers to credit reports for over 200 million U.S. adults. These agencies play a pivotal role in determining financing decisions impacting the lives of the majority of consumers.

This hack allowed perpetrators to gather enough information to open fraudulent lines of personal credit and new credit cards. The true scale of the cyberattack’s impact remains to be seen.

The Wall Street Journal reports Equifax’s share price dropped 14% on Friday.

Both credit-reporting agencies and financial experts urge people to monitor their finances and credit reports for irregularities. Consumers can also contact any of the big three agencies to set up fraud alerts. In the wake of the crisis, Equifax is offering customers a variety of methods to monitor and protect their credit information.

If you haven’t changed the passwords on your major accounts, now is an opportune time.  

Cyberattacks remain at the forefront of national security concerns. With each passing month, we see increases in the scale and sophistication of cyberattacks affecting governments, businesses and everyday consumers.

The Equifax hack serves as a prime example of how centralized databases and servers create massive vulnerabilities for consumers. One single company’s system exposed sensitive information potentially compromising the identity of nearly half the country.  

Blockchain Solutions

In the future, blockchain infrastructure will help mitigate the effect and scope of cyberattacks through its two fundamental characteristics: decentralization and cryptography.

Bypassing centralized servers and databases will spread consumer information across secured peer-to- peer networks protected by layers of cryptography. While blockchain technology is not a silver bullet, incidents like the Equifax hack lend credence to the benefits of blockchain in enhancing cybersecurity.

In their current form, websites like Equifax require users to enter multiple pieces of sensitive information in order to authenticate themselves and utilize that website’s services. Blockchain proponents advocate that consumers can limit the amount of personal information used to authenticate themselves when using blockchain technology. According to Jerry Cuomo, vice president of Blockchain Technologies at IBM, consumers will have sovereign authority over their personal information when operating on blockchain since transactions are securely verified by permissioned participants.

Blockchain in its purest form obsolesces central authorities. However, in order to truly protect consumers, identity management on blockchain must be backed by a robust, established legal framework.  There is a mix of opinions among tech leaders when and if identity management will migrate to blockchain.

In the aftermath of the Equifax attack, it’s important from a practical standpoint to always protect your personal identity and limit the use of sensitive information.

From a broader perspective, we must reevaluate the technologies and authorities we assume safeguard our personal information.

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