How Secure is Blockchain?

The air around Blockchain is full of enigma.

Some assume it to be the next frontier of data security and privacy. While others think that it’s still nascent, and some totally regard it as a hoax.

Leaving the last claim, all others have significant reasons to exist. Blockchain is both, a vision of the future and a reality of today that needs more attention across the tech community because its benefits are tremendous.

Coming back to security, let’s see what makes Blockchain worth the security hype, what are the drawbacks and what it all means for the general user.

What is Blockchain?

Let’s take this layman explanation.

Blockchain can be compared to a ledger system, similar to a classroom’s attendance register.

Just like a student’s attendance details contain,

• time of attendance,
• roll number
• type of lecture,
• and the absent or present mark,

Blockchain records certain entries made to it.

Starting from the first student in the attendance register, each student is linked to their previous roll number mathematically.

A particular classroom with the attendance details of all its students represents one “block”. Each classroom is linked to its adjacent classroom in a series which forms the block-chain.

This chain forms a distributed network running across the campus of the school. The attendance data is encrypted in a way that the attendance of the last student of the chain depends upon all the students that come before them.

The security lies in the following four fundamental principles of the blockchain;

• Immutability — No attendance entries once made can be edited or deleted.
• Decentralization — The attendance data is distributed in a network spanning all the classrooms, rather than one.
• Encryption — The attendance details are mathematically hashed in order to prevent unauthorized access.
• Anonymity — Because the data is hashed, it doesn’t reveal the identities of the students without proper authentication.

These principles find use cases in a plethora of real-world applications, that need an advanced level of security. From banking to land records to the legal domain, Blockchain offers ways to upscale security like never before.

Is Blockchain Uncrackable?

While cracking a blockchain is not impossible, it’s nowhere near easy. There are several ways to look at the security features provided by Blockchain.

When we talk of security, we talk about the integrity of data. The data should be theft-proof, which means someone without the rightful access shouldn’t be able to tamper with it.

So far, Blockchains have been attacked but via loopholes in the surrounding environments.

For example, the famous attack on Ethereum — one of the largest blockchains, was made possible by a fault in an integrated smart contract. A smart contract is an automated program that facilitates transactions based on certain events.

Furthermore, the human aspect of a blockchain, which is both irrevocable and prone to error at the same time, can contribute towards a less or more secure blockchain.

For example, Bitcoin’s worst attacks have been perpetrated by Cryptocoin Exchanges — platforms for selling and buying crypto-coins, which involves lapses in the platform management fronts.

Ways to Defeat a Blockchain

Blockchain relies on a complex cobweb of mathematical structures that can be defeated in their own game. The two most popular ways are “Eclipse Attack” and “51% Problem”.

Eclipse Attack

Blockchain’s key to the successful operation are its nodes. Two participating parties in a transaction — lender and borrower can be considered as two nodes.

In this method, if hackers are able to take over the communication of blockchain nodes, they can make a particular node verify fake transactions. This’ll allow the hacker to waste the resources of the Blockchain infrastructure, and cause a system failure.

51% Problem

Blockchain is decentralized for the very reason that no single miner owns more than 51% of the stake. If that happens, they can disrupt other 49% of nodes and subsequently control the blockchain as per will.

Theoretically, this is only possible if the Blockchain is too small or has rogue miners involved in it. Large blockchains with massive mining capacities would be very hard to defeat.

Should the General User Worry?

For the general user who’s using a blockchain-based application, the real question to ask is — what and how much is on stake?

If the what means money, you need to be careful before investing in a cryptocurrency that hasn’t got sustainable attention.

The team operating a blockchain poses the real test of trust.

Money isn’t the only thing that the blockchain is used for. There are several applications of the concept from protecting intellectual property to land assets.

For instance, look at some of the following use cases for blockchain;

IBM Food Trust — Tracking food supplies

Brooklyn Microgrid — Electricity sharing grid based on blockchain tokens

Block66 — Crypto Mortgage Platform

PodMiners — Ad fraud protection for Podcast monetization

All of these implementations have their own set of scenarios and breakpoints. If you’re part of the above platforms, you’ll have something different at stake every time, making it less or more important.

Conclusion

In the end, it’s safe to say that Blockchain offers highly stringent security standards if they’re implemented properly. As more research is put into the problem, the level of security will keep climbing up. Right now, it’s wise to speculate the blockchain you’re going to interact with in order to avoid the loss because even if the Blockchain isn’t faulty in itself, the team behind it can be.