Can Documents be Stored with Blockchain Technology?

Kamran Shafii |

Frequent cyberattacks signal that our data is unsafe from vicious attacks, and we need to safeguard it better. We need advanced technology to protect our documents and control how others access them.

The solution is file storage on a blockchain, but is it possible to store documents safely with blockchain technology? Yes, but this answer alone leads nowhere. To understand this better, you should also ask the following: 

  • What is blockchain technology?
  • Is data storage on blockchain safer?
  • And if it is, then how can blockchain technology help with document storage? 

This post answers all these questions. Keep reading and discover how blockchain technology revolutionizes data storage.

What is Blockchain Technology?

To understand blockchain technology, you first need to know what a blockchain is. A blockchain is a distributed ledger-based technology that is programmed to track data records. The data is kept in blocks linked together as a chain; this entire formation is called a blockchain. 

But why is it powerful? A blockchain is shared with a network and is accessible to all connected devices, so one can modify data only with the network’s consensus.

A blockchain is a non-destructible way to track data changes over time. It’s like the ledger method that stores data records in a register, but much better because data tampering is nearly impossible. As each device in the network has a track record as evidence, no one can alter the data unless all participants approve of the change. 

Because of its transparency, blockchain technology is a perfect solution for industries that demand data protection on an extreme level. 

Can Blockchain Be Used to Store Documents?

Blockchain is commonly associated with Bitcoin, and while keeping track of cryptocurrency was its original purpose, blockchain technology is capable of much more.  

The reason is: Data can be anything — not just a currency. But, unlike Bitcoin, documents are large files, so is it possible to store them in a blockchain? Yes: Just as we can store currencies like Bitcoin as digital packets in blocks, documents can be stored as a whole or in parts in similar packets.

However, as documents can be larger files, their hash value is often stored in a blockchain while the original document is kept elsewhere. We’ll discuss it more below, but for now, remember that document storage on a blockchain is possible. 

In fact, blockchain technology is one of the safest ways to store documents. All major industries, like healthcare, real estate, business and insurance, are introducing blockchain technology for data storage. 

Why Use Blockchain for Data Storage?

Traditional document storage methods have one big problem — data manipulation is easy. Anyone could easily access, change or remove essential data because there’s no legit way to verify data authenticity, and you can’t differentiate between fake and original contracts

Blockchain solves this problem by providing transparency, privacy and data integrity.

Prevents Document Tampering 

In a blockchain, changing data secretly is impossible. Let’s understand this by learning how a blockchain stores data.

When you add a document to a blockchain, it’s assigned a unique hash. This hash, along with the previous block’s hash and the transaction record, is kept inside a block. Since each block contains the previous block’s hash, it creates a permanent and interconnected record. 

Now, if somebody tries to tamper with the data of a block, its hash value changes. This new value won’t match the next block’s previous hash value, which affects the entire chain.   

Unless someone’s ready to alter each block, which is tiring and time-consuming, it’s impossible to manipulate the data. And by the time they’re done, the network will already know about it. 

Decentralization Benefits

One of the best benefits of a blockchain is decentralization. Because when a system is decentralized, the same data is accessible to everyone in a network. 

By distributing data across all connected nodes, a blockchain ensures that no single device controls it. Everyone in the network is alarmed if someone secretly tries to manipulate the data. All devices can immediately confirm if the data is changed, and if it is, the network will send a data error. 

But what if you genuinely want to replace old documents? In that case, you can either upload them in a new block or modify an old block. Adding a new block is simple, but you need the network’s consensus for the latter. When you modify an old block, each node in the network will fact-check the newly uploaded data and then approve or disapprove your request. 

Accessible to Everyone

Data in a blockchain is more credible than data stored in cloud storage because of the system’s transparency.

Due to their centralized nature, cloud storages are accessible to only a few, and data legitimacy is often doubted. But when you store data in a blockchain’s decentralized system, all participants in a network have the same information and can verify the data’s authenticity.

Blockchain allows real-time tracking and monitoring of documents, which is extremely important in departments where information and its location are crucial, such as supply chain management or logistics. 

Another benefit is sharing documents safely with different parties. It gives you control over how others view it as you get to choose whether to upload your documents in a public, private or hybrid blockchain system: 

  • In a public blockchain, everyone can view it
  • In a private system, it’s accessible to a few who’re permitted
  • In a hybrid system, you can limit or restrict access from public view

Eliminates the Intermediaries

The original purpose of a blockchain was to cut the middleman. In the case of money transfers, the mediators are banks, and for documents, these are lawyers or agents. Mediators take more time and add unnecessary expenses to verify your documents, and the problem is many times, transparency can’t be trusted. 

However, in blockchain cloud storage, you don’t need a mediator to verify your documents. They can be reviewed with the network’s consensus in seconds.

After considering all benefits, it’s safe to say that blockchain provides more protection and credibility to your documents, but what’s more is that it saves you lots of time, money and headache.

How to Store a Document on the Blockchain

You can store a document on a blockchain in three ways:

  • Storing an entire document
  • Storing only its hash and keeping the document elsewhere
  • Hybrid system

Let’s look at how each method works. 

Storing an Entire Document

One way is to store an entire document inside a block, but it’s not the best method. This is because large document files often take up a lot of space, which affects access latency, the speed of how quickly a node can access the data. 

An efficient blockchain must have low latency to work fast. But with large-size documents, devices take more time to download and upload files, which reduces the system speed and makes it expensive. This increases access latency as the system gets clogged up and isn’t effective anymore.

Unless your document’s size is small, you wouldn’t want to store an entire document in a blockchain; you’d instead use the following method. 

Storing a Hash

In this method, you only store the document’s hash inside a block but keep the original file elsewhere. As a result, the block is much lighter, and the system works efficiently. This way, you’ll also be able to tell if anyone tries to tamper with the data, as the hash value changes immediately.  

The documents can be kept on a distributed file storage system or in a centralized database. The issue is that documents won’t necessarily be decentralized or publicly available and you’ll be compromising credibility. 

Hybrid System

In a hybrid system, you store only essential parts of a document, such as signatures and the document’s hash, in a blockchain and keep the entire document in cloud storage. This way, you won’t have to compromise credibility, and the system works efficiently because the large file size of a document isn’t choking the network.   

Conclusion: Is Data Storage on Blockchain Possible?

In today’s online world, you need privacy more than ever. It only makes sense to shift to a technology that protects your data and gives you more control over how others access it. 

Blockchain cloud storage is the answer to all your problems. 

jSign uses blockchain technology to ensure the safety of your documents. It tracks every action in a blockchain to create evidence. The best part is jSign notifies you when changes are made. jSign automatically uploads your most important documents to your cloud storage, so you don’t have to manually do it each time. Would you like to experience this enhanced safety and overall less stress? Sign up for a free trial now.

Kamran Shafii
Manager, SEO Content

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