What Makes a Blockchain Secure?

A blockchain is a distributed public ledger that stores information permanently. This technology is widely used in cryptocurrencies to maintain transparency and ensure digital currencies are not double spent.

The security of a blockchain arises from its decentralized and immutable nature. This technology uses cryptography to ensure records cannot be counterfeited. In this article, we are going to explore the technology behind the security of blockchain.

Blockchain Is Immutable

The immutable nature of blockchain points toward the inability to alter any single record made on the blockchain. Since the blockchain stores information in chronological order, every block is linked to the previous one. Just like a book of accounts where business transactions are recorded sequentially. Deleting an old record will alter the whole account as the new transactions are dependent on the history of the preceding ones.

This same principle applies to blockchain. To alter any record demands altering millions of preceding records. To succeed with this act, a hacker needs to be in control of 51% or more copies of the blockchain.

This will also require immense computing power and resources, hence making such an adventure unrealistic.

The blockchain is programmed in such a way that doing the right thing is more rewarding than involving in a dubious act. The immutable nature of blockchain ensures data integrity and genuineness of transactions.

Decentralization

Decentralization means that no single entity is in charge of the blockchain. This can be likened to having a multi-signature bank account. Before any transaction can be made, all the signatories to the account must affirm it.

Decentralization is an important concept behind blockchain technology. It allows several people to have a copy of the database at different locations. Even if a person tries to alter the data, he would have to do the same on millions of other copies. This prevents the blockchain from having a single point of vulnerability. The decentralized nature of blockchain helps to secure and maintain transparency in the network.

The Blockchain Is Secured Using Cryptography

Cryptography plays a vital role in the security of a blockchain. It is the act of encrypting and decrypting data. When a user stores value on a blockchain, he is given private and public keys. These keys are long alphanumeric strings generated using cryptography which is peculiar to a user. The public key is used to receive information while the private key is used to decode.

In cryptocurrency, an individual wallet is secured using cryptography and only the owner can sign transactions using his private key. These keys are peculiar to a user and very hard if not impossible to guess. With the aid of cryptography, the authenticity of information stored on the blockchain is guaranteed.

Consensus Algorithm

The blockchain uses different consensus algorithms to ensure the validity of information stored. This ensures that all the participants on the network agree before any information is validated on the blockchain. This can be achieved using algorithms such as Proof-of-Work (PoW), Proof-of-Stake (PoS), etc.

Bitcoin, the first and most popular cryptocurrency, uses the PoW mechanism. There, miners are incentivized to solve complex mathematical puzzles, and the first to get this correctly shares it with all the network participants and the transaction is validated.

This mechanism ensures that everyone on the network holds the same copy of the database at any point in time and that only valid transactions are added to a block. To validate a fraudulent transaction will require lots of computing power, and any fake transaction can easily be detected and flagged off. Consensus algorithms guarantee the security and transparency of the blockchain.

Conclusion

Although not 100% free from attacks, the blockchain has proven to be a secure and transparent means of storing information and value. The transparency of this technology makes cryptocurrencies more exciting as it is the underlying structure behind digital currencies.

As the technology is evolving, it can be applied in different business settings, and even government operations like the voting process. This will make rigging very difficult as no one can alter its information. The secured and transparent nature of this technology is a sign that it might be adopted in multiple sectors in the coming decades.