Analysing The Security Of Blockchain Network

Introduction

Cryptocurrencies are digital assets that were developed to be a medium of transaction using the complex blockchain technology to power it. The intention behind the development of cryptocurrencies was to make online transactions faster around the globe. Blockchain technology not only assures secure transactions throughout the network but also enhances transparency and it is due to its secured system, several industries are adopting it.

Understanding blockchain security

Blockchain technology generates a structure of data with inbuilt security standards.

• It is mainly established on the concept of cryptography, decentralization and consensus which together safeguard the procedures involved in transactions.

• The data in most of the DLT or Distributed Ledger Technologies, is structured into blocks and every separate block stores a transaction.

• The new block connects to the rest of the blocks ahead of it in a cryptographic chain in a way that cannot be altered or re-structured by anyone.

• The transactions inside the blocks are authenticated which further ensures the security and correctness of each transaction.

• Through the participation of members beyond the distributed network the blockchain technology facilitates decentralization which further enhances the security of the system and reduces its chance to fail. The beginners looking forward to Bitcoin trading can click to bitcoin mining to know more about the techniques involved in trading.

All blockchain are not made equal

In present times, there are two chief types of blockchain namely, public blockchain and private blockchain with certain alternatives. These two types of blockchains vary in a couple of ways that might influence the way of security provided by each.

• The basic difference is that a public blockchain uses computerized systems connected to the public internet to authenticate transactions and bunch them into blocks to sum up to the ledger. Any computer system linked to the internet can attach itself to the party.

• On the other hand, private blockchains only allow recognized institutions to join. They form a member exclusive network of business altogether.

• Another chief way in which public and private blockchain can be differentiated is on the way the transactions are authenticated.

• Mainly for a transaction to be summed up to a blockchain, the participants of the network must agree that is the only category of truth. That is done through consensus or agreement. The most well known public blockchain is Bitcoin and it acquires consensus through what is known as ‘mining’.

• On the other hand, a private blockchain comprises a private network in which agreement is achieved through the process of “selective endorsement”, where the verified users confirm the transactions taking place.

• However, in this process there are some issues involved which includes the threats from the users inside the system but, this can be avoided due to the highly secured infrastructure.

Uses of blockchain technology security

The security benefits involved with blockchain have initiated large corporations to incorporate the technology into their systems.

• Maintaining security of important records and verification of identities especially, in the banking sectors. With the help of blockchain technology data manipulation can be easily spotted at an early stage, permitting banks to go above asymmetric encryption. The placement of blockchain enables verification of data of its users and tools without any protection from the password.

• Securing the internal communications are mostly subjected to leaking of data and cyber surveillance. The exposure of sensitive information can take place when end-to-end encryption fails to cover the meta data. In blockchain oriented systems, the meta data used for communication is spread across the distributed ledger and cannot be brought together at any particular centralized point.

Conclusion

Blockchain is a popular name among large corporations and businessmen for its well- known security facilities. It has played a major role especially in the banking sector due to the transparency of the transactions that are offered by blockchain. Cryptography is the chief reason that contributes to the security features of a blockchain.