How Important Digital Privacy Is for Online Transactions

• Blockchain Council
• September 12, 2024

Most of us pay bills, lend money to friends, and shop via apps or digital storefronts. Online transactions are incredibly convenient, but they can also put your personal data at risk. What are the consequences, and can you do something to avoid them? Let’s find out! 

Dire Consequences

Safeguarding one’s digital privacy when conducting online transactions goes hand in hand with risk awareness and strong cybersecurity measures. Shoppers, financial institutions, and online stores all face these risks.

Data breaches are among the most common and costliest consequences of improper cybersecurity at the company level. Every conventional online transaction requires shoppers to create an account and provide payment information, their real name, and location. Such information then becomes part of a database, which hackers can access and exploit via compromised accounts. Breaches cost companies millions, and more happen each year.

The personally identifiable information crooks gain through data breaches can serve various nefarious purposes. They can open new accounts or create fraudulent transactions. Such incidents are hard to track, so your savings might get much lighter before anyone catches on.

Reputation damage affected companies suffer isn’t as tangible but can be even more destructive. Customers are more aware of their data privacy rights than ever and don’t hesitate to abandon brands they’ve been loyal to if they feel their privacy is in danger. Likewise, it’s hard to maintain good relationships with third-party vendors and business partners.

Can Blockchain Technology Help? 

Blockchain and associated currencies are disruptive technologies that address several vulnerabilities affecting traditional payment methods. Transactions conducted via blockchain become part of append-only ledgers stored on multiple network nodes. This decentralized approach makes data breaches less likely since there’s no single weakness to target.

Moreover, blockchains keep immutable transaction records. That means past transactions are always visible and verifiable while tampering with the data and the possibility of fraud is much lower.

Blockchain doesn’t guarantee anonymity. Meticulous record keeping means each transaction is traceable to a corresponding digital identity or wallet. However, using pseudonyms and advanced techniques like zero-knowledge proof ensures financial transactions can proceed smoothly and with trust without compromising anyone’s privacy. 

What Precautions Can You Take? 

Developing consistent cybersecurity habits is the most straightforward and effective way of securing your personal information and online transactions.

Start by addressing vulnerabilities like data breaches. You can’t control a store’s data protection policies and measures, but you can use a password manager to keep your passwords in a secure vault and ensure that any data a breach exposes is useless.

On the one hand, they create unique logins for every account, so knowing the password for one doesn’t affect others. On the other hand, you can use password managers to set up two-factor authentication that denies account access from unknown sources unless one can supply both the password and another code.

Give out only the personal information needed to complete a purchase. For example, try to avoid providing a shipping address if you’re shopping for digital goods and services. You’ll also want to ensure the websites you purchase from are secure and support trusted payment methods and platforms.

Lastly, you wouldn’t want to make payments without a VPN, which would make you anonymous and untraceable online. VPNs erect encrypted tunnels that protect your internet connection. Routing your connection through a VPN with antivirus both guarantees your security and protects any data exchanges from eavesdroppers.

Conclusion 

Digital privacy is a fundamental prerequisite for secure and trustworthy online transactions. Understanding the risks and taking steps to protect yourself will give you the peace of mind to take advantage of the best deals and shop securely.