According to you, How Secure Is Blockchain Technology?
Although many firms tout blockchain technology as a secure platform, there is much more to explore when it comes to its security. Security has always been a concern for business enterprises, financial app companies, and cryptocurrency companies. With blockchain security, online security has become tightened. Companies often tout blockchain as a secure technology. But there is more to the blockchain security story. According to the Fortune Business Insight report, the blockchain market was at 4.67 billion USD. The market projection says that the capital will grow from 7.18 billion USD in 2022 to 163.83 billion USD by 2029. It will reflect a compound annual growth rate of 56.3 percent from 2022 to 2029. If you are wondering how robust blockchain security is — this article is for you.
What is blockchain technology?
Blockchain technology is an immutable, shared, decentralized, and consensus-based ledger that serves as a secure database to store details about the ownership of various digital assets. It uses a distributed ledger that is non-modifiable. The faster it obtains the data, the more accurately it works, & the more promising the system becomes. The technology is innovative because it assures complete integrity, fidelity, and safety of digital records within the system. It does not require any third party to manage it. There are four distinct blockchains types. These are public blockchains, private or managed blockchains, consortium blockchains, & hybrid blockchains. Blockchain is the ideal technology to provide shared yet secure information. It provides immediate and completely transparent details about a digital transaction stored on an immutable ledger. These immutable ledgers can be accessible only by network members with proper privileges and permissions.
All the data and transaction details get recorded in real-time without human intervention. It serves as a transaction record and makes tracking digital investments easy. Today, we use blockchain technology for securely storing intellectual property (IP), patents, logos, healthcare databases, brand trademarks, NFTs, etc. The most popular use of blockchain technology is in developing cryptocurrencies. In future, Metaverse development companies are planning to use blockchain technology o uniquely store digital assets, payments, and user information. According to Customer Market Insight, the blockchain technology market will reach 69 billion USD in 2030 from 4.8 billion in 2021. The application of blockchain is expanding exponentially because of its robust security.
What is blockchain security?
The answer to the question, as per the article title, is yes. Blockchain is secure. 100% security is not possible in anything. So, blockchain also comes with security postures. Blockchain security talks about the complete risk management principles and mechanisms within the blockchain network. This security mechanism incorporates cybersecurity frameworks, audit mechanisms, assurance services, & cybersecurity best practices to mitigate risks against cyber attacks and digital frauds. Furthermore, financial companies are using additional measures to secure Decentralized Finance (DeFi) [written by me] against cyber threats.
Why do we consider blockchain so secure?
The complex interplay of various characteristics like robust encryption, distributed ledger technology (DLT), consensus concept, and immutability make the technology secure. Let us zoom into the secure minting of the new block of data.
· Every new block within the blockchain receives a unique address.
· Each block also comprises a link to its previous block. This sequence or chain of data blocks is why we call this technology blockchain.
· Each link remains protected by data encryption and goes through data-validating transactions. The linkage formed with the previous block is unchangeable, hence immutable.
· Every new block entering the existing blockchain gets confirmed by a particular set of validation nodes (consensus concept). This process mints a fresh token to match the data block.
How secure could blockchain technology be?
No financial system is 100% tamper-proof. Hence, blockchain is no exception. But blockchains are extremely difficult to hack or breach because of their specially-crafted design. But two ways can take over the security of a blockchain and its established security mechanism. Both these techniques utilize a massive amount of computation and processing.
The first attack technique is the 51 percent attack. Blockchains often rely on the majority for their network management principle. Thus existing nodes can leverage this gap to double-spend cryptocurrency coins, insert fake blocks, or perform something illicit if someone controls more than half (hence the name 51 percent) of all verification nodes. But such an alteration or modification often requires massive computational resources.
Lots of enterprises and apps are using blockchain technology. Developers often leave bugs in such systems that hackers can exploit. If bugs can allow the insertion of incorrect data blocks in any way, the blockchain becomes insecure. Thus developers should remain cautious while preparing blockchain-based tools and solutions.
Other factors for security breaches are cryptojacking, cryptocurrency exchange attacks, DDoS extortion, etc. To learn more about such blockchain-based security threats, visit this article.
Conclusion
Blockchain also helps in maintaining data privacy & establishing a decentralized form of data storage. Due to its exceptionally robust security measures, enterprises and security researchers use it in numerous use cases. This article covers blockchain technology, blockchain security, & a quick walkthrough of why we consider blockchain so secure.
If you want guidance on implementing blockchain technology into your existing system & enhance security, tap Packetlabs. They have expert security professionals in this domain who can guide you to tamper-proof your system through blockchain security.
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