The 19th century saw the rise of the American barons by leveraging their control over tangible resources such as steel and oil. Corporate titans today seek to reach greater heights of wealth through gathering consumer data. However, as in the past, the potential benefits of accumulating these resources are accompanied by a serious business risk: spillage.

Data leaks can be as disastrous for consumers and companies as oil spillages. Take a look at the Facebook fallout earlier in the year. The phone numbers, full names, and addresses of 533 million Facebook users were leaked to hackers in April. This prompted a protest from both consumers and governments.

Facebook is not the only one with security problems. There were 1,001 data breaches reported in 2020 and over 155 million people were negatively affected by data exposures. These data breaches can be costly and time-consuming for businesses. IBM reported in 2020 that breaches cost an average of $8.64million and took on average 280 days to fix. However, these metrics can vary from industry to industry.

Many businesses believe that the risks of multi-million-dollar exposure are worth the cost and the PR headaches. Research has shown that big data empowers companies to make better strategic decisions and reduce costs. It also helps them understand their customers better, which in turn leads to higher profits.

Blockchain is your savior

It is impossible to avoid security risks by not using data. The question is, how can companies maximize the competitive advantage that data offers without running the risk of legal, financial and PR disasters?

Privacy-preserving computations on the blockchain are the answer.

Although this solution may seem counterintuitive, it is possible to see the benefits. Blockchain transactions are transparent and public, and they reach consensus in public. This is contrary to data security companies want. The blockchain paradox is that users can share data to gain new insights that benefit society in general or separate data into protected silos that protect individual privacy.

Privacy-preserving computations have been a new option in recent years. Verifiable computation allows for public auditing of findings outside the main blockchain network to verify correctness. This eliminates the transparency risks. This security measure can be implemented without adding any additional cost or burden to the company’s primary blockchain network.

This security measure can be integrated into companies’ data management strategy, which allows them to have both their cake and eat it as well. Businesses can dramatically reduce the risk of data breaches and their associated fallout by incorporating blockchain in to their data management strategy.

Although there is not much research that supports layer-two privacy-preserving computation, the preliminary literature on blockchain security shows its potential as privacy measures. One review was published in Sustainability in 2020.

“The industry can integrate [blockchain technology], which can guarantee data confidentiality and integrity. It should be enforced to maintain data availability and privacy.”

Companies that use privacy-preserving computations and other blockchain-based security methods not only have better security but also have the opportunity to improve interoperability in industries that were previously hampered by data security.

Healthcare is an example

Data sharing between providers, health networks, and third-party researchers in this sector is vital. Information transmission has been made difficult by privacy regulations. Many healthcare providers were left with outdated fax machines for many years, because their advanced electronic systems weren’t interoperable enough in order to secure transmit patient information.

These silos had a chilling impact on healthcare innovation. A team of German scientists highlighted this in a 2019 paper published in Nature Partner Journals of Digital Medicine.

“Healthcare data can be difficult to exchange, analyze, and interpret because it is hidden in incompatible systems, isolated databases, and proprietary software. This hinders medical progress as technology that relies on these data, such as artificial intelligence, big data, or mobile apps, cannot be fully utilized.

This team has a lot of potential. AI researchers have developed remarkable algorithms that support doctors in diagnosing conditions. For example, researchers trained a neural net to identify 26 common skin conditions. They also connected it with more than 16,000 teledermatology cases. The algorithm proved to be as accurate and reliable as trained dermatologists. One reviewer summarized the project.

“While this tool has not been approved for clinical use yet, deep-learning-based diagnosis and clinical decision support tools are rapidly gaining acceptance in many medical specialties. They are poised to transform how we view medicine.”

Although theoretically secure, data (insecurity) is a roadblock that impedes progress. Researchers had to access a huge data repository in order to build the teledermatology tool. Sharing sensitive patient data, even small ones, can be a privacy nightmare.

Take into account the backlash caused by Google’s partnership with Ascension, a major hospital chain to launch Project Nightingale — a tool that allows users to search for information about patients. Critics slammed the pair for sharing patient records. Ascension and Google reacted to the criticism by arguing that they were adhering to federal privacy rules. However, a Stanford University professor said during an interview with The Wall Street Journal.

“Some people consider the federal law obsolete, stating that the law’s protections aren’t keeping up with the growing demand for patient information from the technology sector.”

This is a complex point. The problem isn’t that companies don’t adhere to privacy regulations; it’s that the public has no faith in these security measures. If companies in the health sector want to be able to innovate by using data to their advantage, they must stop hiding behind the law and address consumer concerns head-on.

Imagine healthcare providers having access to data security measures that used layer-two verifiable computing to secure patient data sharing without putting consumers or their organizations at risk. It would revolutionize the game with its security and assurance. It would encourage innovation, prevent malicious threats, and lower the risk for data leakage.