What Makes Blockchain Secure?
The blockchain is a distributed, digital ledger built in a series of encrypted blocks. Each block, transactions recorded and time-stamped to preserve integrity, encrypts or “hashes” every 10 minutes. That record is distributed across countless nodes (computers) worldwide and linked to the blocks before and after it.
Attempts at tampering a transaction record are evident as the entire block would also need to be altered for tampering to remain undetected.
The complexity of this process makes it an excellent deterrent to hackers. In this article, Lantah narrows in on some of these mechanics.
The sanctity of the blockchain network
There is more than one blockchain, and each blockchain is it’s own network with participants or peers.
The peers in a unique blockchain, for example, a local licensing office, will have private keys and personal digital signatures that allow their transactions to remain private.
Anytime a record is altered, let’s say payment for a business license, that signature becomes invalid, and right away, other peers can see that the fee has been tampered with.
Evidence that something is not right about the transaction will prevent more problems with other peers and would allow the one issuing the license to take steps.
The more extensive the peer network, the less likely a hacker will be able to tamper with data.
Public and private blockchain networks
The blockchain comes in 2 basic varieties---public and private. Not unlike data centers and cloud storage, as blockchain privacy levels increase, so does potential security.
Public blockchains connect to the public Internet. That is where they bundle blocks and validate transactions to add them to the ledger. That situation increases potential exposure. However, public groups allow peers to transact anonymously. That protects peer identities and personal data from being hacked.
Private blockchains are more exclusive to their specific organizational network and only allow pre-qualified groups to participate. Personal privacy is more of a problem. Private blockchains are less private on a personal identity level, where membership and access privileges require links to persons and organizations.
Bitcoin mining provides a well-known model for achieving public blockchain consensus. By consensus, we mean that all parties agree there is one version of the truth. The Bitcoin community does this through solving cryptographic problems. This generates a proof of work.
The downside is that this process takes up enormous amounts of power, generates heat, and is quite slow.
Private blockchain achieves consensus through selective endorsement. In this process, users verify transactions. Since peer groups are small, this process is far less demanding in terms of computational resources. The downside here is the potential for insider threats.