Digital Transformation: Integrating Recordkeeping and Blockchain Technology – Lexology

Digital Transformation: Integrating Recordkeeping and Blockchain Technology – Lexology

Blockchain was originally created to validate the transactions of bitcoin and other cryptocurrencies. It can be described as a digital ledger of transactions that is an immutable database and distributed across a network of computer systems. Although touted primarily as a value transfer technology, at its core, blockchain is also a records and data management technology.1 Blockchain technology provides a system for recording information in a manner that makes it difficult to change, hack, or corrupt. All records are individually encrypted and, once a record is validated, it can’t be altered. The network is constantly checking that all copies of the database are the same to ensure that any of the records or data added to it haven’t been modified. All participants on the network have access to synchronized copies of this database. By design, blockchain technology is inherently resistant to the unauthorized alteration of records and data. Integrity is maintained through preserving the accuracy and reliability of records created and used on the blockchain.

Maintaining the integrity of records and data is one of the fundamental principles of recordkeeping and data management. Integrity means that a record must be accurate, complete, and authentic. This includes being unmodified and consistent in form and meaning over its life as a record.2 The life cycle of a record begins at its creation and ends at its disposition. To guarantee integrity, as part of broader information governance programs, organizations typically implement policies and procedures to protect records against unauthorized access and alteration. For example, a key indicator of the integrity of a record is the ability to produce auditable evidence of its complete provenance. This is particularly true where records and data are stored electronically and where it is challenging to control how a record is used and accessed. Systems must be in place to ensure that there is an audit trail to track a record through its life cycle and that only authorized individuals following a set procedure have access. These types of systems provide proof of the authenticity of records and data. This is where blockchain technology can be utilized to enhance the security of an organization’s records and data management systems.

Companies have been storing their records on electronic networks for some time, however there has been a growing tendency to find express legal validation of blockchain being employed for this purpose. The United States is at the forefront of this movement with state legislatures updating laws to allow certain records and data to be maintained using blockchain technology. In particular, the focus …….

Source: https://www.lexology.com/library/detail.aspx?g=c073a146-2efd-4cdc-8ade-eb101926f458

Leave a Reply