Block chain is secure.
Blockchain is based on a decentralized ledger that can lessen costs by withdrawing
the intermediaries such as banks and by creating the effective decentralizing
trust between the organizations and customers. The blockchain supplements the entries
to the ledger which are formalized by the wider user-community rather than by a
central authority.
Each block stands for a transactional record and the chains that are
linked with them. The blockchain sustains the records distributed among
computer networks and lists the blocks of transactions sequentially. For the
further understanding, read carefully the given picture below.
Bitcoin is a good example to understand why the “blockchain” is
considered too secure. In Bitcoin’s blockchain, the shared data is the history
of every Bitcoin transaction ever made. You can also say it’s just like an
accounting ledger. The ledger is stored in multiple copies on a network of
computers, called “nodes.” For the confirmation of transactions validity nodes
are being checked each time when someone submits a transaction to the ledger. A
subset of them compete to package valid transactions into “blocks” and add them
to a chain of previous ones. The owners of these nodes are called miners. The
people who makes the addition of new blocks profitably will be able to earn
bitcoins as a reward and knows as minors.
So, the question arises here is “the block
really immutable?”
The answer is definitely no!
The complete mutation is not possible in the blockchain like any other
networks, the blockchain is proficiently inclined to the alterations. The
reason is that just because the computers, or nodes, on a blockchain network
are distributed, and the mathematical puzzle and computing power required to
make changes makes modification nearly seems impossible. A person would require
to take control of more than 52% of computers in the same distributed ledger to
modify a chain and all of the transactional records within a very limited time
approximately within 10 minutes for Bitcoin. Until now, this has never
happened.
Blockchain can handle security and privacy concurrently by enabling
secrecy through “public key infrastructure” that protects against malicious
attempts to modify data, and by maintaining the size of a ledger which is too
difficult in a conventional information system. The wider and more distributed
the network, the more secure and authenticate it is supposed to be.
Security levels of
Blockchain:
1.
Transaction Level
A big concern of the people
who are involving with blockchain trading is about transactions validity. This
is a minimum level for a well-functioning blockchain required to authorize the
transactions with assurance and predictability at the end of the consensus
cycle. That’s the point where the consensus method perform its assignment of assuring
the transaction completeness.
2.
Account Level
On a second level we are
concerned about the security of accounts of our customers. There are two
scenarios of this problem is well provided by the Blockchain. First, there might
be a hosted account for the interchange or secondly, perhaps there is a user
account which can be self-managed by means of an exclusive wallet. The main
purpose to use self-managed wallets are to distribute cryptocurrency to the
masses.
On the other hand, hosted
exchanges and wallets contributors are well performing an important role, so
they need to become really good at it. For example Facebook is not the Web.
It’s a walled garden performing their tasks very well and astonishingly more
secure than the Web at wider scale.
3.
Programming Level
The most crucial part to
develop any technology is the programming. This is where smart contracts or
scripts could be accommodated. Smart contracts might have accountability from
which we can gain benefits in form of resulting a drainage or disappearance of
funds. The best part is that blockchain allowed us to program money, and we
need to be careful in doing it.
4.
Distributed Organizations
Level
At distributed
organizations level, smart contracts marked as “law” that becomes a house of
cards that wants to be self-governing and independent. Self-determination has
its own threats, but the first priority of an organization should be
self-testing to get a chance to run their company independently. The
organizations who only count on technical experts rather than organizational
experts results in the form of fundamental flaws in associations with the
operations of a company to blockchain contracts.
5.
Network Level
Physically and virtually, blockchain operates
on a peer-to-peer network. This network builds where the consensus methods
operates. It is also being noticed that this is exactly the area we hear about
the 51% attack susceptibilities, i.e. when theoretically, an attacker can spend
enough money and hash power to “hijack” the transaction validation process in
their favor. This category of security will concern itself with the soundness
of the actual algorithms, protocols, incentives and consensus economics
(whether mining or transaction costs related).
6.
Governance Level
This is an unformed area for the application
side of decentralized consensus. At this level we have only go through rare
cases of decentralized administration. The two mostly discussed and popular cases
are Bitcoin (block size) and Ethereum (hard fork) governance. The factors that
influences primarily in long term security of a blockchain are those deliberate
decisions which are taken over decentralized governance. We are still learning
by trial and error as we figure out the best practices of decentralized
governance. On one hand, Bitcoin could be criticized for being too firm on
governance related changes, whereas Ethereum could be distinguishable to have
been a little too slack with their recent hard fork decision process. Maybe one
day, the pendulum will swing to the middle.
Why people use Blockchain?
In the era of 21st century, the most crucial decision is to
trust on someone, especially in terms of trade and businesses. There is no one
here whom you can trust 100% so, the people who are involving with you in trade
and are not so much trustworthy the blockchain is being built up which share
valuable data in a secure and transparent way.
The logic is that the blockchains store data using revolutionary math
and unconventional software rules that are extremely difficult for attackers to
manipulate. To theoretically build up the tamperproof system we need two things:
a cryptographic fingerprint unique to each block, and a “consensus protocol,”
the process by which the nodes in the network agree on a shared history.
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