Centralized vs. Decentralized Data Systems – Which Choice Is Best?

Healthcare and insurance payers spend almost $496 billion each year on billing and insurance-related costs, noted Bruce Schneier, head of security architecture at interrupt — a company founded by the father of the modern web, Tim Berners-Lee. As the amount of data continues to grow, it becomes more difficult for healthcare providers to access the information needed to treat patients.

Providers typically turn to centralized resources such as health-care information exchange, but these present a laundry list of potential problems, Schneier said.

“Centralized systems are at risk of security breaches, as well as ethical and confidentiality issues,” Schneier told VentureBeat. “Decentralized data systems can give healthcare providers better access to important data and information and enable citizens to control what data is shared and with which provider. For example, one person can have their own data profile and give their doctor access to relevant information needed for their appointment, leading to better care.”

The question of whether centralized or decentralized data should be used in the healthcare sector is just one example from the industry. To help CIOs — regardless of industry — better understand the benefits and shortcomings of each approach, VentureBeat asked Schneier to describe the pros and cons. A slightly edited version of the conversation follows:

VentureBeat: Please describe in as much detail as possible what you consider to be the most important factors in each of the following scenarios:

Benefits of Centralized Data

Bruce Schneier: Centralized can mean many different things, depending on the context. When we talk about centralized data architectures at Inrupt, we mean applications or online services that are closely linked to their databases. It’s the way most things are built these days. All data of all users of an app or service is stored virtually, if not physically, in the same place. The advantage is that it is easier for the creators and operators of the service to optimize the performance.

Disadvantages of Centralized Data

schneier: You can think about this on several levels. When services within an organization are closely linked to their databases, it creates silos of data. Every large organization communicates with its user through more than one online channel or app. But with centralized architectures it becomes very difficult to share data between systems. It is difficult to reuse the same piece of data for multiple purposes. Integrations introduce complexity and risk of insecurity. User data thus ends up in silos, frustrates users and holds back the organization.

At a higher level, centralization leads to monopolies. A single individual, a group of people, or a company controls the functionality of a centralized data system, making it vulnerable to risk. There is also a lack of privacy as some centralized data systems share user data with third parties. Centralized data systems are also major targets for hackers, making them more vulnerable to breaches and data theft.

Benefits of Decentralized Data

Schneier: The important change is not about where the data physically lives, but about disconnecting applications and data. This has many advantages. Within an organization, systems are interoperable by nature. Data can be reused for a new purpose without being copied elsewhere, and all data about a user can be organized around the user, rather than being tied to the application it first came from. When this kind of reorganization is done with the cooperation of the users, it improves both the trust and the customer experience.

At a higher level, distributed data puts people back in control of their own data. Your data is distributed in the sense that no organization can control it, but in a sense it is also “centralized” around you. You can share it, or not, with whoever you want.

So when we’re online, we often enter the same data over and over on different websites, usually forgetting who we’re sharing our data with in the process. In addition to a more private and secure model, the interoperability of Solid, a technology from Inrupt, makes systems generative. New ideas come from linking things together, but we can’t link our data from different parts of our lives together these days because it’s stuck in centralized systems.

Disadvantages of Centralized Data

schneier: Companies that manage single-purpose, internal-only data sets that don’t contain personal information about users may not see the benefits of a distributed data system like Solid.

VB: What are the biggest challenges for data management in a centralized system versus a decentralized system?

schneier: Besides challenges [in] in accordance with privacy regulations, centralized data systems create high-value attack targets – for example, a single database of 10 million credit card numbers – that attract hackers with many resources. Distributed data focused on the user completely changes the incentives of hackers and makes breach threats more manageable for most organizations that are not part of their core business. cybersecurity.

VB: What route does your company generally advise customers to take, and under what circumstances?

schneier: Inrupt’s business is built around Solid’s distributed data approach. Our approach at Inrupt is to help businesses and governments see the benefits of storing their user data in a ‘pod’, that is, a data store that is focused on the individual user. The key differentiators here are interoperability, data quality and compliance at scale.