Unlike at the beginning of the decade when only a few people owned cryptocurrency and there were no much fears about security, many investors are faced with plenty of risk and instability today. The threats experienced in recent times have not only been consistent but have also been so damning. Whether it’s about a fake cryptocurrency scheme, a phishing attempt to steal private cryptographic keys, or a fake wallet established to deceive unsuspecting users.
Keeping your bitcoin safe and secure
In a bid to help secure transactions, as well as the cryptocurrency, many users have now begun to turn to the blockchain. This is basically a distributed ledger technology which unlike the traditional transaction processes provides more security for storing and transacting bitcoins. With these blockchain solutions, investors now know how to safely store their cryptocurrency.
The blockchain development has helped to do away with the need of investors holding their bitcoin. Rather, it provides a unique solution by a way of using the private key which allows them to access their bitcoin address safely. This has not only helped to secure the use of cryptocurrency on the blockchain but has also gone a long way in making the use of bitcoin more intuitive and convenient.
Today, there are many bitcoin investors using private keys to access their cryptocurrency in their wallets. But is that the main essence of using a blockchain? Actually, there is more to the use of blockchain technology. This is a system established to enhance effective transactions among people who do not trust one another.
The blockchain development encourages the allocation of valuable data in a secure, tamper-proof manner. Basically, blockchains function by using highly innovative software rules and sophisticated math to effectively store data thereby preventing undue manipulation and making it extremely difficult for hackers to access data.
Now, apart from the fact that investors can employ efficient blockchain solutions to share valuable data, it is interesting to know that your bitcoin is safe and secure in a uniquely accessible location. Nevertheless, it is extremely important to note that things can really get messy when crooks — skilled cheaters — come in contact with the fancy math and software rules.
Basically, this is just to let you know that even the very best-designed blockchain technology is not invulnerable to attack. When the security system of a blockchain is breeched, failure is bound to occur. To this end, it becomes imperative to analyze and understand those things that make blockchains secure in principle.
What makes the blockchain secure
Bitcoin is a typical example of secure blockchain technology. This is one effective and efficient blockchain that enhances accurate transactions through the use of an accounting ledger. It’s a technology that tries to present the history of every transaction made on the network in the form of shared data.
There is a need to understand the blockchain development process in order to effectively evaluate its level of security. Basically, the bitcoin blockchain works by storing the ledger in several copies with a network of computers that are commonly referred to as “nodes.” Ultimately, these computers (nodes) are established to always verify the validity of any transaction submitted to the ledger by a person.
This implies that no one on the network can spend a bitcoin except they’ve got one to spend in their wallet. It is interesting to note that some of these nodes can help to improve the entire blockchain development process by competing to package valid transactions into blocks before integrating them to a previous chain of blocks. These nodes are owned and managed by some people known as “miners.” They are responsible for adding new blocks of bitcoins earned as mining reward to an existing chain.
So, what then makes the blockchain technology secure? Theoretically, there are two things that make the system tamperproof. They include a consensus protocol and a cryptographic fingerprint. While the later involves a technological process by which various computers on the network consent to a shared history, the former involves a cryptographic fingerprint that is basically distinctive to each block.
Generally, it takes a lot of computing time and energy to generate a hash (i.e. the fingerprint). One major reason Bitcoin is believed to operate with a proof-of-work protocol is that the hash serves as proof that the miner actually performed the computational work to earn the reward (bitcoin) which was then added to the block on the blockchain.
As you already know, a new hash will always be generated once the block is altered. To this end, this is meant to serve as a kind of seal that should function as part of the blockchain solutions. It is very easy to verify whether the hash matches its block or not. This is why the nodes are fully represented. The verification process must be done before their respective copies of the blockchain are updated with the new block. In the industry, this is practically referred to as the consensus protocol.
The last security element to consider is the immutability of the blockchain. Each block on the blockchain is designed in such a way that it features the unique hash in the previous block. This implies that the hashes can also double as the links in the blockchain. To this end, you will need to calculate a new hash both for the existing block and every other block on the chain so as to be able to retroactively change an entry in the ledger.
Obviously, it is outrightly difficult for a hacker to successfully break through the protocols offered by these blockchain solutions as they will need to make the process faster before new blocks are added to the chain by other nodes. So even if they have computers that are more efficient than the other nodes combined, they can still not gain access as their alterations will be automatically rejected. This is because there will be a conflict between an added block and the already existing one. This is mainly why the bitcoin blockchain is said to be immutable.
Author Bio:
Melissa Crooks is Content Writer who writes for Hyperlink InfoSystem, a mobile app development company in New York, USA and India that holds the best team of skilled and expert app developers. She is a versatile tech writer and loves exploring the latest technology trends, entrepreneur and startup column. She also writes for top app development companies.