As the name implies, blockchain involves a chain of blocks that record transactions. Every block has a connection with the block after it, and those before it. As a result of which, it is virtually impossible for someone to tamper with one record. This is because an attacker will have to modify a chain of blocks in order to avoid the possibility of detection. While this might not seem like a big trait for security, there are a wide number of additional characteristics of blockchains that result in additional security.
Cryptography is primarily used to secure the records in the blockchain. At the same time, the participants on a network carry their private keys, assigned as a result of the transactions that they have made. These keys work as personal digital signatures. In case any record gets altered, this digital signature will not be valid anymore and the peer network will figure out that something has gone wrong.
Moreover, blockchains are decentralized. This is one of the major qualities of blockchain that significantly increase its level of security. For instance, it is distributed across networks that are connected to peer-to-peer. These are constantly updated, and hence they remain in sync. As there is no connection to a centralized location, there is no single point of failure or access. As a result of this, a massive amount of computing power or at least control over 51% of the blockchain will be required to alter it. This is extremely unrealistic for even the most ambitious attackers and hackers. As a result of which, blockchains are highly resistant to tampering and fraud.
However, do note that blockchain security is often described as too mighty. Most people fail to recognize that even blockchain security can have its downside. Hence, there are a number of reasons why it is important for the blockchain community to understand the scope of blockchain security better.
While decentralized systems are certainly very safe, they are not invincible.
For smaller systems, where mining is not much of concern, hackers will not have any weak point to the target. However, for bigger systems, where everyone can become a part of the network, some security concerns do arise. One possible solution, in this case, could be the verification of potential members on the network. However, again, how do we exactly decide who will determine and verify the participants? Would not such a system ruin the essence of decentralization?
Another example is the attack on the Nice Hash marketplace in December 2017. The Nice Hash marketplace is one of the biggest marketplaces of Bitcoin. After getting hacked, $60 million were lost. While this did not exactly happen because of the Bitcoin vulnerability, however, the lack of marketplace security resulted in a lot of loss to the investors of Bitcoin.
Hence, blockchain technology can still be made more secure. New methods of attacks will continue being developed, and the same is the case with better ways to stop them. Nevertheless, blockchain technology still offers an unmatched level of security.Published: Jun 11,2019 05:25:00 PM IST