This byline explores the vulnerabilities of centralised data storage systems, which can be targeted by cyberattacks and breaches, leading to data misuse and privacy violations. Highlighting growing regulatory concerns over data management, held by both enterprises and individuals, it looks at decentralised storage as a promising alternative. The piece discusses how decentralised storage solutions distribute data across a network of nodes, making it more difficult for hackers to access, thus providing individuals with greater control and ownership over their data. By enhancing user control and alignment with data protection regulations, decentralised storage fosters transparency, and trust, and helps to lower costs for everyone. There is an urgent need to leverage decentralised storage to revolutionise data privacy and security measures, paving the way for a true Web3 infrastructure and a more secure, user-centric internet experience.
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The Vulnerabilities of Centralised Data Storage Systems to Cyberattacks, Data Breaches and, Misuse
Data has become the lifeblood of modern society. The rapid growth of the internet and digital technologies has led to the generation of vast amounts of sensitive personal and business data. As we continue to generate said data, concerns surrounding its storage, privacy, and security have become increasingly pressing.
The problems at the root of these concerns are exacerbated by the centralised nature of modern data storage, which leaves it vulnerable to cyberattacks, data breaches, and misuse. According to an IBM report, the global average cost of a data breach is $4.35 million, with 83 percent of organisations experiencing more than one data breach. The same report found that breaches caused by stolen data can take up to 243 days to identify, providing criminals with plenty of time to exploit the information.
Decentralised storage offers a promising solution to these challenges — enabling enhanced privacy and security while catering to the varying needs of different stakeholders. For individuals, this can mean enabling greater autonomy over their data and how it’s used by governments and other entities. For institutions, this can mean better protection of sensitive corporate information against exploits and espionage. Moreover, decentralised storage is also a crucial component in developing true Web3 infrastructure, paving the way for a more secure and user-centric internet experience.
The Growing Concerns Among Individuals and Enterprises Over Data Management
The exponential growth of data has led to significant challenges in storage solutions. According to a report by IDC, the global datasphere is projected to reach 175 zettabytes by 2025, a staggering increase from 33 zettabytes in 2018. This rapid growth has put immense pressure on organisations to find efficient and secure storage offerings. What’s more, the current data storage landscape is dominated by centralised systems, where data is managed by a single entity, such as a cloud service provider.
This makes them vulnerable, as hackers can target a single point to access vast amounts of sensitive information. Centralised entities may also misuse or sell user data for profit, violating user privacy. They are also susceptible to government surveillance and censorship, undermining the privacy and freedom of users. So it comes as no surprise that, according to a Pew Research Center survey, 79 percent of US adults are concerned about how companies use their data, with only six percent of the opinion that their data is more secure today than it was in the past.
What’s more, overseeing personal data collection and storage has become increasingly challenging for enterprises due to regulatory and security obligations. Government regulations such as the General Data Protection Regulation (GDPR) in the EU or the California Consumer Privacy Act (CCPA) in the US impose various requirements on companies, including obtaining user consent, providing transparency about data usage, and ensuring data security. Non-compliance can result in hefty fines and reputational damage. As a result, enterprises face increased costs to ensure adherence to these regulations. Similarly, enterprises need to heavily invest in securing their data centres and implementing robust security measures to protect personal data from unauthorised access, theft, or loss.
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How Decentralised Storage Enables Fault Tolerance, Transparency and Novel Business Opportunities
In recent years, decentralised storage has emerged as a viable alternative to address these issues. These systems are designed to distribute data across a network of nodes, rather than storing it in a single location — making it more difficult for hackers to target a single point of failure. This distribution also provides fault tolerance, ensuring data remains accessible even if some nodes fail. This also makes them inherently resistant to censorship, as no single entity has control over the entire network.
The technology also provides greater agency to individuals by allowing them to decide where their data is stored, who can access it, and under what conditions. This increased control aligns with the principles of data protection regulations and promotes transparency, trust, and user empowerment. This approach promotes a fair data economy by ensuring that users retain control and ownership of their data, enhancing privacy and security, incentivising participation, and creating new, safe opportunities for data monetisation.
Decentralised storage can also help companies by reducing the need for multiple data centres in different regions, helping to tackle high costs, which can be offset by additional earnings. It also allows individuals to have more control over their data, aligning with the principles of data protection regulations. Users can decide where their data is stored and who can access it, increasing trust in the system.
This, in turn, can lead to the creation of novel business opportunities for enterprises and users to benefit from. For example, enterprises can leverage secure data marketplaces, pay-per-use services, data privacy services, incentivised storage networks, collaborative data analysis, and edge computing to stay competitive, drive innovation, and adapt to the evolving data landscape. Similarly, users can also benefit from the formation of data unions, that help users to anonymously share data and be compensated for their contributions. This ensures that everyone gets rewarded for the information and insights they enable, unlocking a fairer data economy in the digital age by reimagining how we secure, transfer and leverage user data.
Decentralised storage is also essential towards developing true Web3 infrastructure because it supports the core principles of decentralisation, security, and user control, which are essential for building a more open, trustless, and permissionless internet. It also provides the necessary infrastructure for decentralised applications (dApps) and services to exist in Web3, enabling a more secure and private internet experience. This has also led to the creation of Decentralized Physical Infrastructure Networks (DePIN) — which refers to interconnected devices that provide digital services in a decentralized manner. These networks enable users to contribute their hardware capabilities and earn rewards. For example, users can ‘rent’ available storage space on their hard drives and be compensated for storing data from the network.
The Need to Leverage the Innovations of Decentralised Storage for the Future
The challenges surrounding data storage, privacy, and security are becoming increasingly complex and urgent. As the volume of data continues to grow, organisations can turn to innovative storage solutions that prioritise data privacy and security measures.
Decentralised storage has the potential to revolutionise this process — addressing the existing industry and community privacy problems while catering to the varying needs of different stakeholders. By embracing this innovation and promoting its adoption, the industry can pave the way for a true Web3 infrastructure and a more secure, user-centric internet experience.
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