Alan Turing, a giant of encryption, not blockchains

It’s an old story — the central servers of big, blue chip companies: Home Depot, Target, ADP and now Yahoo! have been hacked and everything from credit card data to passwords have been stolen, to be used in the dark markets, presumably. Even the FBI, the IRS and the Democratic Party have been breached.

The truth is that data breaches are a systemic problem rather than a deficiency of passwords, security patches and firewalls. Any server farm that holds millions of records in one spot and needs to feed that information to computers around the world (i.e. retail stores, agents in the field, Yahoo! Finance visitors) in order to do business can be breached at some point. The spoils are too great, the gateways too porous and the treasure too rich for evil doers not to lie in wait, ready to exploit the inevitable vulnerability when it surfaces.

Ironically, blockchain, still synonymous in some circles with dark markets, is the antidote to this systemic security problem. $12 Billion in cryptocurrencies such as Bitcoin and Ethereum are guarded by blockchains utilizing the strongest security known to man- distributed computing.

The full power of the security protocols of Bitcoin and Ethereum are only possible on a distributed ledger on a blockchain. In these decentralized systems, the computer programs and databases are run and stored on hundreds of thousands of computers around the world rather than a few massive servers (sitting ducks). Each computer adds to the security of the network, and no outside party can breach the system.

Any security breaches you’ve heard about relating to Bitcoin or Ethereum had nothing to do with their core protocols — they were bank failures resulting from the same old central server security flaws, from outside parties users chose to hold their private keys. They were not failures of the blockchain.

Blockchain isn’t coming overnight. But you can’t uninvent this technology. The advantages start with security and include a host of other profound benefits from financial inclusion for the unbanked, increased privacy, and the wider distribution of value from the Internet. You’ve heard of Web 3.0. That’s blockchain. It’s going to clear out the underbrush, starting with the Yahoo! hackers.

In the meantime, let’s all go to our Yahoo! accounts, change our passwords and pray that someone, anyone, can hold the door.