Posted: 29.07.2021 | 03:54
What Makes Blockchain Secure?
Blockchains are secured by various mechanisms, including advanced cryptographic techniques and mathematical models of behavior and decision-making. Blockchain technology forms the infrastructure of many crypto money systems. It prevents the copying or destruction of digital currencies.
The use of blockchain technology is also being considered in other contexts where data immutability and security are paramount. But blockchain security is not an easy situation. It is therefore essential to understand the fundamental concepts and mechanisms that provide robust protection to these innovative systems.
Immutability and Consensus
While there are many security-related features in blockchain, the most important concepts are consensus and immutability. Consensus means that nodes within a distributed blockchain network can agree on the true state of the network and the validity of transactions. The reconciliation process is based on reconciliation algorithms.
Immutability is the name given to the ability of blockchains to prevent the modification of transactions that have already been approved. These transactions are generally related to crypto money transfers as well as records of other types of digital data that are not related to money.
Consensus, combined with immutability, forms the overall framework for data security in blockchain networks. Consensus algorithms ensure that system rules are followed and that all parties involved agree on the current state of the network, while immutability ensures the integrity of data and transaction records after each block considered valid.
What is the Role of Cryptography in Blockchain Security?
Blockchains use cryptography to secure data. One of the cryptographic functions that is very important in such a context is hashing. Hashing is the name given to an algorithm known as a hash function that takes an input of data and in turn creates a specific output that contains a value of a certain length. Regardless of the size of the input, the output is always the same length. If the input changes, the output will be completely different. But if the input does not change, the resulting hash will always be the same, no matter how many times the hash function is run.
Within blockchains, these output values, known as hashes, are used as unique identifiers for data blocks. The hash of each block is generated based on the hash of the previous block. This is the most important event that connects blocks and creates a blockchain. The block hash depends on the data contained in that block. The change to be made in the data also requires the change of the block hash. In short, the hash of each block is generated based on both the data contained in that block and the hash of the previous block. Hash identifiers play a huge role in providing blockchain security and immutability.
Hashing is also used in consensus algorithms used to verify transactions. For example, while the Proof of Work (PoW) algorithm is used to achieve consensus on the Bitcoin blockchain, a hash function called SHA-256 is used to mine new coins.
The role of cryptography is to ensure the security of wallets used to store cryptocurrencies, in addition to providing protection for transaction records in ledgers. Public and private keys that enable users to receive and send payments are created with asymmetric or public key cryptography. Private keys are used to create digital signatures for transactions and make it possible to verify who owns the coins sent.
Cryptoeconomics is a study of economics within blockchain protocols and the possible consequences of their design on the behavior of participants. With the crypto economy, security is based on a greater incentive for nodes to act honestly rather than committing harmful and wrong actions in blockchain systems.