Why the blockchain is secure

Supply chain management, charity donations, healthcare databases, government – just a few examples of business domains using blockchain technology. 

What else do they have in common? Correct, they all do need a high level of security.

You have probably heard that blockchains are secured by advanced cryptographic techniques and mathematical behavior models, like game theory, which is extremely hard to manipulate by attackers. 

Still, blockchain security is not this simple, and it is essential to understand the initial concepts granting its robust safety.



Consensus + Immutability fuelled by Cryptography

The two most basic concepts of blockchain security are consensus and immutability.

Consensus

That is a fault-tolerant mechanism for blockchain systems. The consensus is used in distributed blockchain networks to achieve the agreement on the true state of a data value or a state of the network and transaction validity.

Blockchain operates as decentralized systems and involve contributions from thousands of participants working on verification of transactions. 

Thus, blockchain changes its status very dynamically and needs a reliable, secure, real-time mechanism to ensure all network transactions are authentic, and all network participants agree on the status ledger consensus.

Achieving consensus depends on the implemented consensus algorithm, a set of rules defining the blockchain networks participants’ contributions (PoW, PoS).

Immutability

That is an ability of the blockchain ledger to remain unchanged. There is no possibility of altering the data or transaction in a blockchain. 

Thus, if the participants have already confirmed the transaction, nobody can change it thanks to blockchain’s immutable nature.

Put together, consensus and immutability ensure blockchain network data security:

 

 

  • consensus guarantees that everybody follows the rules, and all network participants agree on the true state of the transaction,
  • immutability verifies the data and transaction integrity after each block is added, and its validity is confirmed.

Cryptography

Blockchain security mainstay is cryptography, or rather its hash functions. 

A hash function algorithm’s killer feature is its irreversibility. It receives input data (of any size) and returns a predictable size output (called a hash).

Hash explained

What is a hash? 

That is a data block unique identifier hiding its true identity.

How does it work? 

Each block hash is generated concerning the previous block, creating a chain of linked blocks. Hash unique identifiers ensure blockchain security and immutability.

Cryptographic hash functions features:

 

  • fast to provide the hash for any data type,
  • impossible to extract the initial input data from its value,
  • unattainable to find two messages with the identical hash,
  • even the smallest change in the initial message leads to receiving a completely different hash (aka avalanche effect).

Also, consensus algorithms employ hash functions for transaction validation.

Lessons Learned

Summing up, the high-level blockchain security features are as following:

  1. Blockchain architecture: that is a chain of blocks. Each block owns a hash with the value of the previous block, forming a chain.
  2. Transparency and confidentiality: while blockchain participants are enabled to see authorized transactions only, all transactions and the ledger’s true state managed transparently, using consensus algorithms to reach consensus among all participants.
  3. Cryptology: cryptographic hashing functions enable secure transactions and make blockchain immutable.
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