How Secure is Blockchain Technology?

How Secure is Blockchain Technology?

Blockchain Technology and Data Security

When it comes to security, computers have never been considered as the most reliable ones. Someone always finds a way to gain access into your computer and misuse the data. This is where blockchains make their entry. In simple terms, a blockchain is an ever expanding list of blocks or records which are connected and secured with cryptographic methods.

Blockchains are used to share precious data over a secure medium. They store data with advanced mathematics and software that are not very easy for hackers to invade.

Let us understand why blockchains are considered secure. In a bitcoin blockchain, the data that is shared contains information about all the bitcoins that have been mined. This can be referred to as an accounting ledger which is stored as a number of copies on a computer network called ‘nodes’. Each time there is a transaction, the nodes ensure that it is a valid one. Valid transactions are added to the other blocks.

How secure is blockchain technology

Why can blockchain security be considered as hack-proof?

This technology is considered secure with respect to two things:

  • Cryptographic fingerprint (hash) assigned to blocks which are unique to them
  • The process of sharing history on a network by the nodes also called ‘consensus protocol’.

Generating a hash is time and energy consuming. It involves a huge amount of computational power to earn a bitcoin. It acts as a seal too, because if the block is modified, a new hash is created. Hash verification is easily done by the nodes and the blockchain is updated.

Another feature is that hashes are the links in a blockchain. Each block carries its predecessor block’s hash. When an entry in the ledger has to be modified, a new hash needs to be calculated for all blocks. This has to be accomplished at a lightning speed or else other nodes will keep adding blocks. To achieve this, supercomputers much powerful than all the nodes put together are needed. Else, the added blocks will interfere with the existing ones and nodes would reject them. This process makes the blockchains secure, theoretically.

Any technology is subject to loopholes. Hackers have innovative ways to break into blockchains. There are ways to destabilize a blockchain and a hacker can control a node’s transactions by tricking it. There have been certain cryptocurrency hacks, in recent times where hackers have invaded the e-wallets. But hacking onto a blockchain is not worth the trouble. Since it is very expensive and consumes tons of computational power.

In conclusion, blockchain technology is indeed sturdy, private and secure. You cannot ignore it since it solves enormous problems everywhere, including businesses. After rigid testing practices in pilot cases and by governments and companies, blockchains have proved to be tremendously secure. Institutions everywhere are fast adopting it for their day to day transactions. The advantages are far more significant than the risks it poses. All systems are vulnerable in a world of technology.  Blockchains are still in the nascent stage and have a long way to go to achieve tamperproof perfection.

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