06 May 2022

How Secure is Blockchain Technology?

Nowadays security is the biggest concern in the digital world and for transaction related issues. After the launch of Cryptocurrency

How Secure is Blockchain Technology?

Nowadays security is the biggest concern in the digital world and for transaction related issues. After the launch of Cryptocurrency, blockchain suddenly came into the limelight because of security reasons.
Blockchain proved to be a powerful technology for protecting the integrity of vital information. But that does not mean it is entirely safe.

Basics of blockchain security

Blockchain gives a structure of data with inherent security qualities. The principle of this technology is based on cryptography, Consensus, and decentralization, which ensure trust and security in the transaction. In the blockchain, data are structured into blocks and each block relates to one other and all blocks are secured with a unique hash number, which is impossible to temper because when someone will try to change the hash number it will automatically become invalid and get disconnected from other blocks.Blockchain technology allows decentralization through the participation of members across a distributed network. There is no point in failure, and a single user cannot change the record of transactions.

Public vs private blockchains

The security of blockchain differs by its types, like who can access the data and is allowed to participate. These things are labeled under the public or private blockchain.

Public Blockchain

This type of blockchain is allowed for everybody to join this network, read or write on it. The biggest example of this type of blockchain is a cryptocurrency, which is gaining more popularity these days. It can also be used by the government for voting purposes or health care solutions. This type of blockchain is more about B2C solutions.

Private Blockchain

Private blockchain requires verification of each user because it defines the access they have. This type of blockchain is mainly used by enterprises to control the resource and action that everyone carried out also it permits faster transactions and are more energy-efficient to maintain. The owner or operator has the right to override, edit, or delete the necessary entries on the blockchain as required. This type of blockchain is the go-to solution for corporate and B2B scenarios.

Roles of Miners in Blockchain Security

Mining contributes to the security of blockchain Miners verify every transaction to make sure that they are valid and in line with the blockchain code. For popular cryptocurrencies like Bitcoin and Litecoin, they submit their proof of work (POW) and algorithmic evidence about supporting or denying each transaction and receive payment in the form of coins.

Security Risk

There are four possible ways to threaten blockchain by hackers and fraudsters.

1. Phishing attack – It is a type of scamming attempt to attain a user’s credential. Scammers send wallet owners a well-designed email to look as though they are coming from a legitimate source. Through the email, they ask the user for their credential using the fake hyperlink and once someone enters their credential then he or she can lose their user data and blockchain network.

2. Routing attack – In routing attacks, blockchain holders typically cannot see the threat; everything looks normal on their end. But behind the scenes, the scammer has extracted confidential data.

3. Sybil attack – In this type of attack, scammers create many false networks to flood the network and crash the system to get your credential.

4. 51% attack – As we know that mining requires a heavy amount of computing power, especially for the public blockchain. Miners, who got more than 50% of the resources can easily manipulate the network.

For blockchain, Security is both a strength and a concern. Every modern technology has its own concern related to security and blockchain is also one of them. However, as more industries are adopting it, more security shields are being created and deeper investigations into the blockchain are being carried out.

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