Introduction to Blockchain Security
Blockchains are codes and most blockchain networks aim to be open-sourced projects meaning that anyone can access, alter, and utilize their core program.
However, blockchains include security mechanisms such as cryptography and consensus models that ensure that the transaction records present on the network are authentic and prevent any type of exploits or cybersecurity issues that can harm the users.
Another area where a blockchain requires security is ensuring that the transaction data present in the form of distributed nodes remains immutable and secure. There are various areas where blockchain where the network needs to incorporate security measures.
What is Immutability and Consensus?
Immutability is the quality of a blockchain to remain unchanged. When it comes to security measures on a blockchain, investors will only make transactions on a globally accessible blockchain network if they are sure that the data available on the platform is immutable.
The blockchain network needs to ensure that no one is able to change, edit, or manipulate transaction records present on a blockchain once they are verified to ensure integrity for the blockchain network.
However, before the transactions are verified blockchain systems run the danger of changeable records on the blockchain network. Therefore, a network incorporates consensus model to ensure that all the nodes on the blockchain can reach a consensus to make sure that the transaction record available on the block are corroborated and validated.
The data recorded on the distributed ledger is not limited to token transactions but it can also exist in the form of non-monetary information.
Use of Cryptography in Blockchains
Blockchains often use encryption technology to ensure data security. When a user makes a new transaction on the blockchain it is secured by cryptographic hashing feature. Hashing is a function to ensure that algorithm receives data input of variable size and generates an output that has a predictable and uniform size.
Even when the output is always going to be of the same length, if the input shifts at any time the output is going to change completely. In the same manner, if the input remains the same the output is always going to remain unchanged.
Therefore, hashes work as unique identifiers for data blocks. The hash for a new block is interlinked with the hash of previous block.
In this manner, a series of block is stack resulting in a blockchain. The block hash contains data within that block. Therefore, if any changes are made in the data block the entire block hash needs to be edited.
In this manner, hashes ensure the security and immutability of a blockchain network. Bitcoin blockchain uses the hashing function called SHA-256 that converts input data into 256 bits or 64 characters long hashes.
Another important role of encryption is to generate public and private keys to protect the blockchain wallets. Public keys work as addresses that users can paste or share as their digital location for token transfers.
Meanwhile, private keys are like codes or passwords that act like digital signature allowing blockchains to authenticate the ownership of their wallet accounts.
Blockchain Security: Importance of Cryptonomics
Cryptonomics is a new term associated with a blockchain. It also plays an important role in ensuring the security of a given blockchain. It is based on principles of game theory to predict and streamline the behavior of nodes. A blockchain incorporates the mechanisms to ensure that nodes are incentivized to act honestly rather than opting for malicious intent.
Therefore, blockchains may use consensus model such as PoW that ensures that each participating node incorporates considerable time and money to verify the transactions.
In this manner, only honest nodes are incentivized to stay while others are expelled. At the same time, this type of system prevents placing the majority of hash power in a single entity or group.
In case, a mining operator is able to account for more than 50% of the total hash contribution they can launch a 51% attack allow them to double-spend. However, the intrinsic complexity of blockchain the chances of such an event are miniscule.
Blockchain incorporates security measures at various layers and aspects of the network such as Byzantine Fault Tolerance or BFT. These systems ensure that blockchains continue to operate in an effective manner while maintaining their integrity and ensuring security for their users.