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One of the great technological feats of the 21st century was the advent of blockchain technology. Nevertheless, blockchain was meant to be the backbone for bitcoin-type cryptocurrency, and it’s been adopted in fields like finance, healthcare, logistics, and supply chain management.
One of the most compelling reasons why blockchain is being so widely adopted is its secure, transparent, tamper-proof systems.
While the idea of blockchain is attractive, its security is a complicated and layered issue.
In this article we are going to dig into blockchain security and the basic idea that drives it, basic theoretical ideas that should be present there, and also the means to be independent of its attacks and fraud.
First, we should understand how the blockchain works before we consider moving to blockchain security.
Moving to a blockchain security solution doesn’t mean blindly jumping into the world of blockchain security. In the simplest of terms, the concept of blockchain is a decentralized distributed ledger that entails giving consent to a transaction and is secure, transparent, and immutable.
It’s just a chain of blocks inside it, with each block simply containing a set of transactions, and they’re all chained together with cryptographic hashes.
They can be public, i.e., open to anyone (e.g., open-source), or they can be private, i.e., running on a closed group or consortium, i.e., shared between different organizations.
The fact that they are decentralized means you no longer have to rely on some kind of overseeing central authority, and blockchains are immune to tampering, censorship, or fraud.
Blockchain Security
The data stored over the blockchain is protected using blockchain, which protects the data from problems of integrity, confidentiality, and availability.
Inherently more secure as it doesn’t rely on a single point of control, he also says far from that, blockchain is unlike a traditional centralized system.
There are, however, different ways that vulnerabilities are introduced into the blockchain (e.g., bad coding, human error, or malicious attack).
Blockchain Security Key Principles
Most of the security concerns about the blockchain stem from several fundamental principles on which the blockchain design and operations depend. This ensures there are no possibilities for these networks to perform in a secure, transparent, and utterly reliable manner.
Decentralization
Another pillar of blockchain tech is decentralization. This means banks and governments had to depend on centralized control, so only one authority would control and process a transaction.
However, blockchain networks where transaction validation is spread among a number of participating nodes (nodes) are subject to an increased risk of fraud and corruption.
There’s no central point of failure to hack, because the network doesn’t exist. An attack would therefore require enough nodes compromised within the network that it could instigate one; a tall order especially when the network is large and diffuse.
Immutability
The property that makes the blockchain immutable is that it records data. Once posted on the blockchain, it is too difficult to change and delete. If the data is kept using cryptographic hashing and the number of blocks that link them, it is done.
In a hard-encased chain, the hash of the previous data of the block is for all blocks.
To change any data in any block would involve calculating the hash of that block and then every block that followed; that’s a lot of computational power. As such, blockchain is a tamper-proof and anti-fraud transaction medium that cannot be tampered with or fraudulently altered.
Transparency
Since it’s a public blockchain, everyone who’s in that chain has access to that transaction history, meaning you can’t wrong or put something in the system that isn’t there.
It’s very transparent and very auditable and verifiable, which is very important to be able to do because you sometimes need compliance warranties for compliance with regulations and standards.
However, the public data on the blockchain is also worth noting that it’s all pseudonymous. While participants are identified by their public keys, they are allowed to remain anonymous but, while still publicly viewable, personally identifiable information is preserved in order to maintain accountability while still maintaining privacy.
Consensus Mechanisms
To have consensus mechanisms in place to enable blockchain networks to reach consensus about what the state of the blockchain should be is a must.
All the participants in the network use consensus mechanisms in order to come to a valid consensus on the transactions.
Some common consensus mechanisms include:
Proof of Work (PoW): In PoW transactions, miners use this mathematical jigsaw game to try to validate the transactions.
However, it takes a lot of time and resources to accomplish this, and attackers cannot just alter it on the blockchain.
Proof of Stake (POS): POS allows you to validate other people’s transactions (for a charge determined by the chain) by staking a predetermined number of tokens as collateral.
When you stake on the validator, you have the opportunity to be one yourself and choose which block to attach, which is enough to make it honest. This is the magic.
Fourth Delegated Proof of Stake (Duos): Unlike POS, POW pays its individual miners in the coin, which acts as a reward for accepting or ‘mining’ transactions.
The second type of POS and known as Duos, only several chosen individuals are to validate the specific transactions, create new blocks and receive the fee.
In private and consortium blockchains, where a set of nodes must agree on the legitimacy of a transaction, a technique known as practical Byzantine fault tolerance, or PBFT, is used to reach consensus.
To achieve these goals, each of these approaches has its own security benefits to accomplish the task of verifying that blocks are created only to record legitimate transactions while maintaining the security of a network.
While each of these approaches has a different definition of security, and as we shall see has its trade-offs, the aim is to maintain the ‘integrity of the network’ and only allow ‘ legitimate transactions’ to be written on the blockchain.
Security In Blockchain
We provide an overview of the fundamental characteristics of the consensus protocols, cryptographic techniques, and financial incentives utilized to safeguard the blockchain. We’ll examine those security measures in more detail here.
Hash Functions in Cryptography
Blockchain security would not be conceivable without cryptography. Each of the blockchain transactions uses a cryptographic hash function to hash the transaction data into a fixed length character string. Important characteristics of hash functions include the following:
Deterministic: It consistently gave back the exact hash output that a certain input provided.
Quick Computation: Hash functions operate incredibly quickly.
Prior to imaging Resistance: Computational; the original input’s hash cannot be reverse-engineered.
Collision Resistance: The likelihood of two distinct inputs producing the same hash is extremely low.
Small Change Sensitivity: It will be a complete hash again if you enter a hash that is marginally different from the one you previously had.
The blockchain application contains a chain, or hash, of the data from the previous block. If any data in a block was ever changed, the chain becomes easily detectable as the hash also changes.
This eventually means that the blockchain will be immutable and secure.
Electronic Signatures
Transaction confirmations use participant ID logos incorporated in digital signatures. When a participant wants to start a transaction, it must be signed using your private key in this system.
This helps to confirm that your private key was not compromised, and your coins are being spent by hackers. Qualifying this transaction also enables other participants to corroborate the precognitive role of participant’s public key.
Asymmetric encryption is used by blockchain networks, and each user has two keys: The identifying factor is comparable to a public key and a private key in certain ways.
There for public key and private key is used to sign the transaction, and it also acts as proof of ownership of assets.
Consensus Algorithms
Consensus algorithms are the foundation of blockchain security. They will make sure that everyone in this network is agreed upon what state the blockchain is in, that they will only deal with valid transactions on the ledger.
Proof of Work (PoW): PoW runs these public blockchains
In order for everyone to solve the cryptographic puzzle, everyone has to solve it at once, as the first miner to solve it then gets to add the following block to the blockchain.
Such an attack needs a lot of computational power, and so the attack is expensive and time-consuming to launch.
Proof of Stake (POS): In a POS system, the validation is provided, and validators are run when a new block is created based on the amount of cryptocurrency they have pledged.
POS is supposed to be more energy efficient than PoW, but it secures the network nonetheless.
Other Consensus Mechanisms: There are also some pros and cons to other consensus mechanisms besides PBFT and Delegated Proof of Stake (Duos)—such as security, efficiency, and decentralization.
It’s the strength and security of a blockchain network’s underlying infrastructure, and the strength of its underlying network infrastructure, that make it a strong (and secure) network.
However, as it can be quite insecure to have a network run by many people, a blockchain network can be vulnerable to distributed denial of service (DDoS) attacks, man-in-the-middle attacks, and Sybil attacks (creating a lot of fake identities to make you feel you are safer); hence, the importance of log-level property.
Mitigation techniques Rate Limiting: It means keeping the network from being flooded with too many requests within a specified time period.
Cryptographic Protections: The communication between the nodes needs to be kept encrypted from the malicious actors.
Node Reputation Systems: building a rep system where if the nodes are dishonest, they are stripped of the network.
Blockchain Security Threats
While blockchain is as secure as beasts, as is the case with any technology, it also carries threats and the types of vulnerabilities that exist with any technology.
Examples of Known attack
51% Attacks: If an attacker had more than 50% of the power of some PoW blockchain’s mine, they would basically change the blockchain and do a double spend on coins.
Smart Contract Vulnerabilities: smart contracts have become vulnerable to bugs or flaws that attackers can exploit to drain funds or change contract behavior.
Private Key Theft: if the private key of wallets is compromised, attacker can take all the funds in wallets so private key is sensitive and needs to store at safe place.
Conclusion
On account of decentralization, cryptography, and consensus protocols for decentralized transactions. While blockchain security practices are as good as possible, it’s not a complete process.
Blockchain is an emerging technology, and as the technology grows, understanding fundamental blockchain security basics is imperative not only for developers but also for organizations and users to protect blockchain from attack and fraud.
We will continue to see blockchain mature into one of the most secure technologies in a broad range of applications with continuous innovation and continued the best security practices.
