In blockchain, transactions are created by an application called a client or wallet, collected by a miner and stored in a block. The block is then appended to the blockchain data store using a consensus algorithm. A blockchain is an immutable list of linked blocks. Each block contains a list of transactions.
Blockchains include a layer of cryptography that makes tampering with the data in the network very difficult, giving it the potential to improve security and traceability in many types of transactions.
The more data that gets added to a blockchain, the more secure it gets. Since each new block is building on the shared accuracy of the last block, anyone trying to break in and edit the data deceitfully would have to edit all previous blocks as well and all blocks across the network.
While blockchain can help prevent fraud, it’s not a foolproof method against sloppy security and poor data practices. It does promise, however, to improve the security of transactions for people and “things” in real time. While the use of blockchain technologies is still in the early stages, blockchain is actively being investigated as a new type of distributed data environment for many virtualized network systems applications.
Is Blockchain Secure?
Blockchain technology accounts for the issues of security and trust in several ways. First, new blocks are always stored linearly and chronologically. That is, they are always added to the “end” of the blockchain. If you take a look at Bitcoin’s blockchain, you’ll see that each block has a position on the chain, called a “height.” As of August 2020, the block’s height had topped 646,132.2
After a block has been added to the end of the blockchain, it is very difficult to go back and alter the contents of the block. That’s because each block contains its own hash, along with the hash of the block before it. Hash codes are created by a math function that turns digital information into a string of numbers and letters. If that information is edited in any way, the hash code changes as well.
Here’s why that’s important to security. Let’s say a hacker attempts to edit your transaction from Amazon so that you actually have to pay for your purchase twice. As soon as they edit the dollar amount of your transaction, the block’s hash will change. The next block in the chain will still contain the old hash, and the hacker would need to update that block in order to cover their tracks. However, doing so would change that block’s hash. And the next, and so on.
In order to change a single block, then, a hacker would need to change every single block after it on the blockchain. Recalculating all those hashes would take an enormous and improbable amount of computing power. In other words, once a block is added to the blockchain it becomes very difficult to edit and impossible to delete.
To address the issue of trust, blockchain networks have implemented tests for computers that want to join and add blocks to the chain. The tests, called “consensus models,” require users to “prove” themselves before they can participate in a blockchain network. One of the most common examples employed by Bitcoin is called “proof of work.”
In the Proof Of Work (POW) system, computers must “prove” that they have done “work” by solving a complex computational math problem. If a computer solves one of these problems, they become eligible to add a block to the blockchain. But the process of adding blocks to the blockchain, what the cryptocurrency world calls “mining,” is not easy. In fact, the odds of solving one of these problems on the Bitcoin network were about one in 17.56 trillion in August 2020.2 To solve complex math problems at those odds, computers must run programs that cost them significant amounts of power and energy.
Proof of work does not make attacks by hackers impossible, but it does make them somewhat useless. If a hacker wanted to coordinate an attack on the blockchain, they would need to control more than 50% of all computing power on the blockchain so as to be able to overwhelm all other participants in the network. Given the tremendous size of the Bitcoin blockchain, a so-called 51% attack is almost certainly not worth the effort and more than likely impossible.
Blockchain allows us to be sure — for the first time — that was is written will endure. This has sweeping implications across computer science, industry, and society.
In particular, I believe that the immutable storage provided by Blockchain technology will revolutionize Legal Document Management, Accounting, Intellectual Property, Government, and Information security.
If you are a Blockchain developer and interested in harnessing the power of structured Blockchain data, I urge you to visit the website www.covalenthq.com click the relevant button on the homepage, or simply email them and they can retrieve it from there.
