B2B data sharing is one of the most efficient ways for companies to exchange valuable data and coordinate their common efforts. Of course, data sharing can be unilateral or collaborative, but it’s, either way, a demanding solution that requires time and trust to be invested.
As helpful as it is, data sharing has its challenges because the legal framework within the collaboration can be difficult to decipher to avoid crossing legal boundaries. However, the lack of IT infrastructure and data privacy also leads to legal matters, which could be solved with the help of blockchain.
Blockchain technology can provide companies with data security since ledger records can’t be altered. At the same time, businesses choosing blockchain to sustain their data-sharing strategy can benefit from protocol transparency with the help of smart contracts that Ethereum usually backs.
In this article, we’ll learn how blockchain can improve B2B data sharing and overcome challenges.
Blockchain and data security
Many risks are included in sharing data between companies, from the lack of reassurance from logistics providers to bans and failed payments. Therefore, it may not be that common for businesses to share data, as they fear losing valuable information entirely. But this can change with blockchain.
Blockchain is modeled through encryption, which is the best way to protect data from being stolen or compromised by external sources that don’t own the unique digital key used to access it. Encryption is so developed that if a hacker got into a company’s system, it would have to alter every block in the chain, which is almost impossible due to the decentralization nature of these systems.
Blockchain and data sharing
As an ecosystem, a blockchain has an important feature ―decentralization. This enables organized frameworks to exchange data between departments while ensuring that information is secured and stored. Regardless of the data block sizes, companies can use the blockchain to compress and transfer it safely by communicating on decentralized autonomous organizations (DAOs) or simply creating their own private blockchains.
On the other hand, centralized data-sharing systems are limited compared to decentralization which comes with cheaper expenses and improved accountability. Decentralization also makes data as a product possible rather than an asset because it can become helpful for the other company.
Blockchain and automated verification
Verifying data fields is among the most important yet complex missions because it’s the primary way to provide data protection and offer only the necessary information. But verification may be prone to human errors, which is why blockchain can help automate the process with its smart contract function.
Smart contracts are programmed to deliver a solution when conditions are met, and considering they run in isolated environments, they can prevent vulnerabilities and code interruptions. And although they’re programmed, anyone involved in the project can verify the process’ development and ensure the data is relevant.
Blockchain and immutability
Securing and protecting the information shared is a top priority, but it involves different branches of security that need to be covered by specific tasks. Immutability, for example, ensures that hashes in the cryptographic network can’t be reversed, ensuring data integrity.
Besides providing an immutable blockchain, this feature also makes sure that data is less prone to hacking, removing the dependency on extra auditing. Finally, all these actions save time sharing data, which is essential for companies to work efficiently. Typically, businesses would work with slow settlement systems and traditional ledgers, but blockchain would boost data sharing at its maximum with blockchains like Ethereum or Solana.
Blockchain and better management
Data management is one of the biggest challenges in this sector because, without a proper plan for classifying and maintaining data, it’s easy to lose sight of how data is being used or shared, which may allow for mistakes like inadequate data access control policies.
With blockchain, businesses can benefit from cost-effective management since it leverages a peer-to-peer network used by nodes to manage and monitor the sources where data has been extracted. This not only helps expand data management but it also helps have a broader image of how data is handled.
Blockchain and data traceability
Tracing data is also challenging, especially when companies are using outdated systems. If information is outlined correctly, businesses can maintain records and trace them depending on time, location or implementation, facilitating data management.
With blockchain, data traceability is done linearly, as teams can follow up on data with the help of a narrative chain of events provided by the nature of the blockchain. Blockchain also eliminates the involvement of third parties that are usually included in these tasks, which is more convenient financially and timely.
Bottom line
B2B data sharing is an essential collaboration for companies to evolve and expand their knowledge. Still, it’s also risky, considering that data flows between businesses that may or not have proper security systems. To tackle this problem, a reliable and high-tech solution such as blockchain technology can automate actions and improve data safety.
