Introduction.
Blockchain have become part of our daily financial life's, this is the reason many people are curious to know if Blockchain can be hacked. The answer is; no. Blockchain is an immutable ledger.
However, Blockchain transactions can be manipulated, they can also be stolen. Moreso, in many ways, Blockchain adjacent-process can be hacked, this is reason(s) for Blockchain security.
Security is a very vital aspect of human existence. We have security at banks, companies government houses our private residence etc to protect sensitive properties, informations, documents and lives.
In this contests, Blockchain security is aimed at ensuring that the integrity of the digital system is maintained. By preventing unauthorized access, theft, data breaches and other security risks.
Blockchain and security defined.
Blockchain:-
blockchain is a distributed ledger with growing lists of records (blocks) that are securely linked together via cryptographic hashes.[1][2][3][4] Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data
Security:-
the state of being free from danger or threat.
"the system is designed to provide maximum security against toxic spills"
Blockchain Security is therefore the protection of Assets and Data within a Blockchain network. It is a very complex risk management system for Blockchain networks. It also incorporates cyber framework, assurance services and best practices, all geared towards mitigating risks of fraud and cyber attacks,
Types of Blockchain.
Before diving into how Blockchain provides security, let's briefly talk about the various types of Blockchain
1. Private Blockchain.
This is a Blockchain operated by a group of people or an organization. There is more control and privacy under a centralized Blockchain than public Blockchain. It is most commonly used in enterprises.
2. Public Blockchain.
Just like its name, this type of Blockchain is open to everyone to participate at all levels. Examples of public Blockchain are Bitcoin and Ethereum.
3. Consortium Blockchain.
This type of Blockchain is semi-decentralized. It involves a group of organizations that come together to operate a Blockchain. This type if Blockchain is like a hybrid of public and private Blockchain. It offers a balance.
Security features of blockchain technology.
* Immutability.
This entails that, once data is recorded on the Blockchain, it can not be altered. This is the base of the integrity of the Blockchain.
* Transparency.
All participants have the ability to see all the transactions going on within the network. This makes it very difficult for fraud to go on unnoticed.
* Cryptographic security.
This means that Blockchain makes use of cryptographic algorithm to create new units and protect transactions.
* Decentralization.
Here, distributed ledger technology makes sure that there exists no single point of failure. This decentralized nature make Blockchain resilient against attacks.
* Consensus Mechanisms.
There are many consensus mechanisms, examples are proof of work (POW) and proof of stake (POS). They are consensus mechanisms, who ensure that the state of the Blockchain is always in agreement. This helps to enhance security.
Examples Of Blockchain Security.
a. Coinbase.
This is a cryptocurrency exchange platform where people trade their assets. It is based in California. It runs strictly on encryption. It stores wallets in a very secured database. All her employees are subjected to very strict screening before they are employed. This is to ensure safety of users assets.
b. Mobilecoin.
This is also a cryptocurrency company based in California. Mobilecoin is working on a user-friendly, secured and affordable security for companies that can not afford the ledger security. It will work with Facebook messenger, signal and whatsapp.
It aims at replacing third party transaction, by keeping all the data for each transaction encrypted at both ends.
c. Hashed Health.
This is a hethcare firm, based in Tennessee. Her vision is to help the healthcare industry to implement Blockchain technology.
What made up this firm are;
- Hashed labs.
- Hashed enterprise and
- Hashed collective.
Each component is focused on different aspects of Blockchain.
Hashed health is helping to see that hospitals and healthcare companies builds very secured digital Blockchain network.Their aim is to enhance the confidentiality of internal communication channels and customers information sharing.
d. Lockheed Martin.
This is the first company to implement Blockchain security. Martin is a defense contractor based in the United States. He is working very hard to see that Blockchain security is incorporated into the engineering system, supply chain and software development.
His goal is to leverage on Blockchain to protect every step of weapon development.
e. J. P. Morgan.
This is the largest and one of the most populous financial institutions in the United States. He developed "Quorum" which is an enterprise focused version of Ethereum, using Blockchain technology for private transactions.
With this "Quorum", he uses smart contracts to create transparent and cryptographic transactions.
Contemporary Blockchain concerns.
Because Blockchain technology is on the lips of everyone world over, it's used cases vary even as it is vast. It many include; Cryptocurrency, voting, supply chain etc. As days pass by, Blockchain technology continues to develop and grow, so also does it's security challenges. Security challenges spans beyond fraud, cyber attacks, and the loss of private keys.
Bellow, we will interrogate other security concerns to prepare our minds for the future of Blockchain and digital security.
a. Privacy concerns.
Its true that Blockchain is designed to be transparent and immutable, there are a few privacy issues with the technology. For example, because the transactions and balances are visible to the public, public Blockchains are vulnerable to monitoring and tracking.
b. Centralization concerns.
In principle, Blockchain are supposed to be decentralized, but in practice, majority Blockchains are centralized. This means that a small group of people controls majority of the network processing capacity, which is tantamount to a major security problem.
c. Regulatory compliance concerns.
This will become a very crucial aspect of Blockchain as it gains popularity more and more. It will help to stop fraud and help sefegaurd assets of users. This will be possible when laws like know your customer (KYC) and Anti Money Laundering (AML) are implemented and made essential for all users.
d. Security flaws of smart contracts.
These are self executing agreements that automatically uphold agreements between two parties. However, it might have its lapses, through which criminals can breck in and steal.
e. Scalability concerns.
Scalability is one of the biggest problems of Blockchain. This is because, as many people join the network, the demand for computing power bandwidth goes up, causing congestion on the network.
f. Interoperability concerns.
This is the capability of Blockchains to interact with each other. When interoperability is lacking, it's challenging to monitor and verify transactions across the Blockchain. This can pose security risks.
g. Malware and phishing attacks.
In the internet space today, malware and phishing scams are prevelent, this also affects Blockchain. When one losses his private keys, he is exposed to either of these scams. This is why users are advised to protect their keys properly.
h. 51% attack concerns.
This happens when a person, group of people or and organization hold more than 50% of the total share of the organization. This puts them at position, where they can manipulate the network, engage in double spending or alter deals.
i. Quantum computing concerns.
The algorithm used by Blockchain (the encryption algorithm) can be compromised by a new paradigm known as; quantum computing. This is capable of exposing the Blockchain to hackers.
Future of digital security.
As Blockchain continue to evolve, it is petinent to be abreast with steps we can take as individuals and organizations, towards improving the security of Blockchain.
They may include;
- Been informed about the new security threats and and tools.
- Ensuring that smart contracts and other other Blockchain components are frequently audited and loopholes patched up.
- Robost authentication and access control measures that will help protect private keys should be implemented to check unauthorized access.
- Investments should be made in cutting-edge security tools like multi-factor authentication.
- There should be a transparent framework on governance, to facilitate a speedy decision making process.
Conclusion.
Granted, Blockchain has the capacity to revamp many sectors of the economy and human existence, but it also posses some security risks. Therefore, organizations and individuals should try their possible best to ensure that Blockchain is safe and reliable.
This they can achieve by planning for the future through addressing all the concerns raised above.
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