Everyone is concerned about cybersecurity, which is understandable given the growth in cyberattacks. But it seems like every time a new development occurs, people immediately ask how safe it is.
Blockchain was initially developed to support cryptocurrencies like Bitcoin, but as interest in the technology grew, an increasing number of people and companies realized that blockchain has applications outside of cryptocurrencies. Naturally, this rise in popularity raises concerns about the reliability and security of blockchain.
In this article, we look at blockchain security to see what it is and how it works.
What is Blockchain security technology?
Blockchain technology collects and stores data in collections, often known as “blocks,” and each block has a limited amount of storage space. The term “blockchain” refers to the chain of data that is created when a block reaches its capacity and is attached to the previous entire block.
The data structures created by blockchain technology include built-in security features. It is based on cryptographic, decentralized and consensus concepts that guarantee the integrity of transactions. Data is organized into blocks in most blockchains or distributed ledger technologies (DLT), and each block contains a transaction or set of transactions.
In a cryptographic chain, each new block is connected to all previous blocks in a way that makes manipulation almost impossible. A consensus mechanism verifies and accepts each transaction contained within the blocks, ensuring that each transaction is accurate and true.
By incorporating assurance services, cybersecurity standards, and best practices to reduce the risks of fraud and cyberattacks, blockchain security is a comprehensive risk management system for blockchain networks.
Four types of blockchain
Public blockchains, private blockchains, hybrid blockchains, and consortium blockchains are the four basic varieties of blockchain networks. Each of these platforms has advantages, disadvantages, and ideal applications.
1: public blockchain
Anyone with Internet access can join a blockchain platform to become a permissioned node because a public blockchain is open and permissionless.
This person has access to both recent and old data and can perform mining operations – complex calculations necessary to confirm transactions and add them to the ledger.
On the network, no legitimate records or transactions can be altered, and since the source code is usually open source, anyone can verify transactions, look for errors, and suggest solutions.
2: private blockchain
A private blockchain is a blockchain network that operates in a restricted environment, such as a closed network, or that is governed by a single institution.
Although it functions similarly to a public blockchain network in terms of peer-to-peer connectivity and decentralization, this particular blockchain is substantially more limited in scope.
Private blockchains often run on a small network within a company or organization, rather than allowing anyone to join and contribute processing power. They are also known as enterprise blockchains or permissioned blockchains.
3: hybrid blockchain
A hybrid blockchain allows companies to establish a private permission-based system and a public permissionless system, allowing them to control what data is made available to the public and who has access to it.
Transactions and records are typically private, but can be validated as needed by granting access through a smart contract. Although protected within the network, sensitive information can still be verified. A private organization can own the hybrid blockchain, but cannot change the transactions.
An individual who joins a hybrid blockchain has full access to the network. Unless they make a transaction, other users cannot know the user’s identity. The opposite person is then informed of your identity.
4: consortium blockchain
In the sense that it has public and private blockchain elements, a consortium blockchain, sometimes called a federated blockchain, is comparable to a hybrid blockchain. However, it differs in that numerous members of the organization use a decentralized network in collaboration.
A consortium blockchain essentially functions as a private blockchain with access restricted to a certain group, eliminating the dangers associated with having a single entity controlling the network on a private blockchain.
Consensus processes in a consortium blockchain are managed by predetermined nodes. It has a validator node that initiates, receives, and validates transactions. Member nodes can send or receive transactions.
Conclusion
Blockchain technology is gaining ground among both consumers and businesses. Each of these varieties of blockchain has potential uses that could increase trust and transparency while producing better transaction records.
However, even the best designed blockchain systems can fail in situations where complex mathematical and software regulations come into contact with people who are experienced cheaters, which can make things chaotic.
The sole purpose of adopting a blockchain is to allow people, especially those who do not trust each other, to share important data in a secure and untouchable manner. This is because blockchains use advanced arithmetic and cutting-edge software standards to store data, making it very difficult for attackers to modify the data.
