Blockchain Security – A Delicate Balance Between Keeping Hackers Out and Letting Users In

HodlX Guest Post  Submit Your Post

Originally created to support Bitcoin, blockchain technology is becoming more popular as people discover its uses beyond cryptocurrencies. One study found that 81 of the 100 largest companies in the world are actively pursuing blockchain-related solutions. In light of this newfound popularity, concerns over blockchain security arise.

So, let’s explore blockchain security and how it works, as well as some practical examples. But before we start, let’s all take a moment to appreciate the irony of blockchain security being questioned when it was created to provide more security in the first place.

As someone who has been involved with Web 2.0 and Web 3.0 development for years, I know security is never taken lightly. Keeping your product secure without compromising its usability is another challenge – much like keeping your house safe without locking the door.

Understanding blockchain security requires grasping the key security attributes of a blockchain network. To put it another way, what are the main focus points when it comes to making sure that a blockchain network is secure?

Transaction integrity

To begin with, blockchain transaction contents should not be changed during transitions. In other words, the transaction’s integrity should remain intact. It all comes down to the very definition of a blockchain, which is a chain of blocks that contains transaction records.

Once the transaction has been validated by all nodes in the network, it becomes immutable, (i.e., it cannot be altered after validation). Every transaction in the chain is verifiable, immutable and time-stamped.

Tamper-resistance

In order to be tamper-proof, a blockchain must prevent tampering, both with the objects within an active transaction, as well as with the historical data already stored in the blockchain blocks. This is ensured by using methods like the SHA-256 hashing algorithm, public-key cryptography and Digital Signature.

As an example, the Bitcoin blockchain discourages tampering because it would result in automatic exclusion from the network. A node operator responsible for approving transactions and adding new blocks to the chain is actively discouraged from tampering with the records as it will be easily discovered.

If a node becomes inactive and no longer in consensus with the rest of the network, the node operator stops receiving mining rewards. To put it another way, Bitcoin node operators don’t have any…