If you’ve heard of blockchain, it’s probably due to its association with popular cryptocurrencies like Bitcoin - and it’s true that blockchain technology is currently best applied to secure digital transactions like these. But the potential for blockchain encryption and management can be applied to far bigger - and more interesting - concepts, like information rights management (IRM).
Blockchain in a Nutshell
The technical details of blockchain are a bit complex, but you don’t need to be a coding genius to figure out the basic system. Blockchain works as a distributed ledger, which means all parties for a given transaction work together to update a 'public' record of that transaction. The ledger is then secured with a unique, unchangeable cryptographic key, which means the record can’t ever be erased or altered. The digital ledger is tamper evident, and is held in a private peer-to-peer network, where each peer exists as a 'node' in the system. Each 'block' in the chain is a cryptographic record of an asset exchange.
Key Advantages of Blockchain for IRM
Today, blockchain is primarily used for currency and digital asset exchanges, but it could easily be applied to the exchange of sensitive files and information. This could be a breakthrough for IRM, since it has all the following features:
- Encryption. Encryption has long been the most important piece of the puzzle for IRM; many companies have used email encryption and file encryption to ensure their information is only viewed by the correct parties. Blockchain, with its unique cryptographic hashes, could add a new level of security to these types of transactions.
- No necessity for third-parties. Part of the beauty of blockchain technology is the fact that it’s supported entirely by a peer-to-peer network; there’s no need for a supervisory party, a manager, or a director to guide these transactions. That makes transactions even more secure, and less burdened by regulations.
- Reliability and longevity. The ledger that records file transactions would be publicly distributed; that means that even if one of the nodes responsible for the transaction disappears, the ledger will remain intact and auditable.
- Transparency. That 'audible' feature is a big one. Since the records of all transactions are kept on the distributed ledger, anyone with authorized access can verify the legitimacy of each transaction, and if necessary, track the path of a given file.
- Privacy. Increased transparency, in most cases, leads to a reduction in privacy - but that’s not the case for blockchain. Because each transaction is secured with a unique cryptographic identifier, only the authorized parties will ever have access to view the transaction log. You can rest assured that any files you send in this network will remain safe from prying eyes.
- Speed. Since you’ll be exchanging files directly, instead of through a third party server, most transactions on the blockchain will unfold faster than their counterparts. This is ideal for fast-paced industries.
- Costs. Finally, the transaction costs are much lower for blockchain exchanges than in other mediums. This is more important for financial transactions than file exchanges, but is still important to consider.
So why aren’t we using blockchain yet?
These are some of the biggest challenges to widespread adoption:
- Trust. Blockchain is still a new technology, and not all businesses are willing to put their full trust in it. The general public is often wary of new technologies and needs time to adjust.
- Regulatory hurdles. Again, since blockchain is new, governing bodies and tech organizations aren’t sure how to regulate the blockchain— especially since no regulation is necessary for it to operate. This leads to many legal gray areas that not all lawmakers are happy with.
- Transitions. Switching systems is always a pain - especially when it requires a fundamental overhaul of your current procedures and infrastructure.
- Investment requirements. The transaction costs of blockchain exchanges are relatively low, but the initial startup costs can be somewhat prohibitive. Not all businesses are willing to make the investment, especially if they’re unsure of the results.
- Cultural adoption. To function efficiently, blockchain needs a large number of users. One company adopting blockchain for IRM won’t be enough; we need thousands, at a minimum, before it starts to become efficient.
So could blockchain herald the next revolution in IRM? It’s a definite possibility, and we’re already seeing how blockchain can revolutionize other industries. We’re going to need to remain patient, however, as regulatory hurdles, user adoption, and other challenges are currently preventing blockchain from being a sure investment.