HOW SECURE IS BLOCKCHAIN TECHNOLOGY ?

Blockchain is the proponent of distributed ledger technology, and is the best way to secure the transactions. The question arises on how blockchain provides more security than the traditional processes?

Blockchain as the name says is a chain of digital blocks which records the transactions. Every block in the chain is connected to the blocks present before and after it, which makes it difficult to tamper a single record. The hacker needs to change the data of the targeted block along with those that are linked to it in order to avoid the detection. This alone feature is not much of deterrence but blockchain includes various other characteristics which provides an additional means of security to the cryptocurrencies.

Cryptography is the technique which secures and records the transactions on blockchain. The new participants on the network are assigned with private keys to the transactions they make and these keys act as a personal digital signature. In case if the record is altered then the signature becomes invalid and the network of peers will know right away as something is wrong. As prevention is better than cure, early notification is crucial so as to prevent the future damage.

The blockchain which is decentralized and distributed across the network of computers is continually updated and kept in sync, which is an unfortunate thing for those ambitious hackers. As the system is not placed in a central location, blockchains do not have a single point of failure and changes cannot be done in a single computer. It requires a massive amount of computing power to access every point of the blockchain and alter all of them at same time. The bigger the network of peers is the blockchain is more tampered resistant.

Blockchain includes some desirable features which help to secure the transaction data, and to consider blockchain for business, it needs to fulfill the requirements and conditions. It is important to be aware of the fact whether the blockchain technology chosen has enough security required or not. It needs to be done with a thorough evaluation, at present the block chain is divided into two main types, which is a public and private one with a number of variations to it. They differ in a number of key ways which can affect the security levels they provide.

The biggest difference and the most obvious one is that the public blockchain uses a computer that is connected to the public internet in order to validate the transactions and place them as blocks into the ledger. This system is open to any computer which is connected to the internet and join the network. On the other hand private blockchain are typically permitted to known organizations to join the network and form a private network called as the business network.

This difference makes a lot of implications in terms of where the information moved through the network is saved and who can access it. This small difference can show how the public blockchain is not suitable for the enterprises. Another difference is that public blockchain are designed particularly on the principle of anonymity, and private blockchain use the identity to confirm and access the privilege, so that the participants in the network know what they are exactly dealing with.

Another way which differentiates the public and private blockchain is on how the transactions are verified, for a transaction to be added to the blockchain the participants in the network need to accept it is the only version of truth and it is done through the consensus means of agreement. Bitcoin is an example of public blockchain and achieves the consensus through mining. In Bitcoin mining the miners on the network try to solve a complex problem using cryptography to create a proof of work. But the only drawback is it requires an enormous amount of computing power and large scale public blockchains.

In a private blockchain a consensus permission network is achieved through a process called as selective endorsement, where the transactions are verified by known users. The advantage of this blockchain technology to businesses is that participants with appropriate permissions can access and maintain the transaction ledger. To establish a private blockchain the user needs to decide on which is the best platform to deploy. Ideally, an infrastructure with integrated security should be chosen which can prevent the root users and administrators from accessing the sensitive information, Deny the illegal attempts to change the applications and data within the network. The encryption keys needs to be carefully guarded by using the high grade security standards.

Blockchain be it public or private is always considered to be a secured way to store information. It is designed to be tamper proof, immutable and democratic which can be achieved more or less through defining characteristics such as cryptography, decentralization and consensus. These complex interplay characteristics are what which secure the blockchain transactions. The decentralization feature creates the single version of truth by distributing the same information to every node on the network, when a change is made the network first validates it and then the miners add the transaction to a new block, it is then added to the blockchain. This is the process of decentralization which has a single version of truth but has no single version of failure. If one block is changed the subsequent blocks also needs to be changed.

Decentralization is considered as the bones and cryptography as the muscle, the data on the blockchain is cryptographically hashed which is processed to hide the true identity. Hashing is something similar to a password protection; it acts as a unique ID for the sensitive data. Each block has a unique hash derived from the blockchains transaction and also the hash of its previous block. The private key used to move and access the bitcoins is hashed to become a public key, so that the users can send the bitcoins without being stolen. The best thing about hashing is that it makes reverse engineering impossible.

Blockchain is an evolving and emerging technology with every passing day and in extreme cases they result in a new version of blockchain technology called as the hard fork. Thus, blockchain technology is highly secure and is used in wide variety of fields. The whole concept of cryptocurrency is powered by Blockchain technology. Today, there are numerous online casinos or bitcoin casinos accepting bitcoin and other cryptocurrency as their payment option.