Top 10 Benefits of Blockchain Technology in Cloud Computing in 2020

By Danni White - Last Updated on May 13, 2020
Benefits of Blockchain Technology in Cloud Computing

One of the most disruptive innovations, which is rapidly evolving, is the use of blockchain technology in cloud computing. Many businesses use cloud storage and derive benefits from cloud computing technology. When blockchain capability is added to the mix, the possibilities have the potential to disrupt entire industry sectors.

Cryptocurrency, created with blockchain technology, gathers most of the media attention. However, the practical uses of blockchain technology in cloud computing are much more significant in terms of having the ability to transform huge amounts of data processing and documentary control in ways that are cost-effective and more secure.

( Also Read: What Is Cloud Computing? A Complete Guide )

Benefits of using blockchain technology in cloud computing

Here are ten benefits of using blockchain technology in cloud computing:

1. Cloud Computing with Hyperledger Blockchains

Hyperledger is a type of blockchain technology that is advancing as open-source applications in a collaborative effort sponsored by The Linux Foundation. Distributed copies of an identical blockchain record make it exponentially more difficult to manipulate data in unauthorized ways. Decentralization of record-keeping using peer-to-peer networks creates a robust audit trail.

With cloud computing, these records can be shared in the cloud and identical copies, or portions of them, can be maintained by multiple parties for audit verification. Unlike cryptocurrency, there is no need or desire for anonymity of the hyper ledger users. In fact, specific hyper ledger applications can have a restricted set of authorized users that are all known to a central authority.

The advantage is, the central authority knows and controls who all the authorized users are; however, it is the users, not the central authority, who maintain the hyper ledger blockchain by their efforts.

2. More Efficient Ownership Tracking

Combining blockchain technology with cloud computing creates many opportunities for more efficient management of valuable things, such as stock ownership, real estate titles, and legal agreements of all kinds.

For example, a shift to cloud computing technology managing a hyper ledger system would dynamically improve the currently used, archaic process of clearance through a Depository Trust Company (DTC) for stock transfers, which now takes three to six days to process. With cloud storage of hyper ledger blockchains, these transfers could happen in microseconds. Hyperledger projects to improve this process are already underway.

3. Decentralization

A major trend is to push computing out to the edge. Smart IoT devices do not necessarily need to check in with a centralized server to manage data and decisions. For example, a facial recognition node may contain encrypted data of authorized persons and only need to check in with servers if a facial match is not found.

A node may operate independently until it needs to check for updates. With multiple copies of the facial recognition database of authorized users pushed out to geographically-diverse cloud storage, access to an official copy is easier and faster.

4. Increased Data Security

Point-to-point encryption helps keep data secure while it is in transit and when it is in storage. Blockchains of transactions are a secure way to help keep the transaction data and the ordering of the transactions. Robust P2P distribution of identical copies of the blockchain across a cloud computing network adds a third layer of security.

Distributed data storage is superior to a single-point data storage design that has a higher risk of a data breach. Data files are broken into fragments that are encrypted and then these fragments are stored in multiple nodes, perhaps in many countries.

5. Increased Private Key Security

The real risks for encryption use are protecting any private keys, which are used to authorize transactions, from theft or unauthorized use. Using a cloud computing process, which includes a two-step verification to authorize a transaction helps improve the security of the private keys.

One-time use of verification responses in the two-step process makes it more difficult for unauthorized access to occur. Using cloud computing to process facial recognition as the required identification to secure private keys improves security even more.

6. Permanent Audit Trail

Blockchains create a permanent record of transactions. One innovation for blockchain technology is adding proof of history (PoH) function. PoH works with a delay function that is verifiable. This provides the cloud computing network a record of time that does not require any trust from the users. Not only does the blockchain provide an audit trail of all the transactions in the correct order, adding a PoH function creates a permanent timestamp on the transactional data.

7. Geo-Independence

For those that deploy cloud computing solutions globally, there is an option to maintain data in a variety of physical locations. When the cloud computing network has enough cloud storage in multiple countries, a challenge such as a natural disaster is less likely to cause data loss or the interruption of services. The processing load is simply switched to another fully operating network node on the system.

Blockchain technology is inherently a distributed data system by design. Therefore, it is an effective tool when combined with cloud networks to broaden geographical diversity for increased network resilience.

8. Faster Disaster Recovery

When using blockchain technology, a record of the transactions is distributed widely. A blockchain is so useful because it is made public or distributed to many authorized users. Any failure of a single network node has no impact whatsoever on the remaining copies of the blockchain.

All the other nodes continue working and updating the blockchain while any node is down. Based on the transactional record of the blockchain entries, especially if they have a secure timestamp, any network node that experiences a failure can easily catch up to the current blockchain database status when the node comes back online.

9. Microtransactions

As the cost of cloud computing technology goes down, the ability and usefulness of processing smaller transactional amounts increases. Reward payments to blockchain nodes can be tiny amounts as long as the processing costs of the transaction is less than the reward.

For example, the processing costs have been a problem with the mining of Bitcoins. It is not sustainable to mine (create) Bitcoins if the cost of the utilities and computer power needed to mine them is more than the Bitcoins are worth.

Cloud computing is now moving away from the need to run a full virtual server to process applications. The advanced cloud computing virtual servers only need to replicate the operating system for its core functions to accommodate application processing. This trend is causing the cost of processing in cloud computing to continue to decrease. This makes microtransactions more feasible.

10. Distributed Supercomputing

Blockchain technology in cloud computing can be used in collaboration with millions of individual computer nodes to create massive supercomputer-like computing systems. For projects that require enormous computational processing, the calculations can be partitioned, managed, and distributed to the nodes as a collaborative effort with each node rewarded according to their proof of work efforts.

Decentralized data storage, edge-computational needs of the Internet of Things, and massive improvements in collaborative processing capabilities are all now emerging in these powerful ways as blockchain technology continues to make strides in combining with cloud computing.

Click over to to learn more about the disruptive innovations of blockchain technology within cloud computing and how it will positively impact many business functions including increased security and improved processes.

Danni White | Danni White is the CEO of DW Creative Consulting Agency, a digital marketing firm specializing in elevating the visibility of small-to-midsize businesses and nonprofits. She is the author of 17 books and hosts the #Hashtags and Habits Podcast, which merges digital marketing, entrepreneurship, and personal growth.

Danni White | Danni White is the CEO of DW Creative Consulting Agency, a digital marketing firm specializing in elevating the visibility of small-to-midsize busi...

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