The future of technology is poised to change the way we live, and blockchain is set to revolutionize almost every aspect of our lives. While cryptocurrency was the catalyst for the buzz around blockchain, the technology extends far beyond just crypto or bitcoin.
Before businesses or governments shift to blockchain, it is essential to understand the security aspects of the technology. This article will cover the following aspects of blockchain technology:
- What is blockchain?
- How does blockchain work?
- Why is it necessary to keep blockchain secure?
- What are the ways to secure your blockchain?
Blockchain is a distributed ledger that stores digital data in a secure and decentralized database. Each block in a blockchain acts as an information container, linked with each other via cryptographic keys. Once a block is filled with data, it is chained to the previous block through a cryptographic key or signature, making the blocks chained together in chronological order.
Unlike traditional approaches, blockchain eliminates the need for a middle man or centralized control network. All transactions are verified by the specific blockchain protocol participants, thereby bringing in reliance on the data.
How Does Blockchain Work?
Once deployed, blockchain allows storage and distribution of data on a decentralized ledger. The data cannot be altered, and changing recorded data is not permissible with blockchain. Instead, it is stored onto a new block which indicates that “X changes to Y” at a specific instant.
Blockchain forms a system of immutable data or records of a ledger that can neither be altered nor deleted. A cryptographic key links every new blockchain with the previous block. Every time a block is added to the ledger, it instantaneously gets broadcasted to all the nodes of that blockchain network.
Why Is It Necessary to Keep Blockchain Secure?
While blockchains are immutable and decentralized, users must ensure secure transactions for a few reasons:
Blockchains are not immune to cyberattacks. Tampering with blockchain through cyberattacks has been a growing concern. In 2021, almost $14bn worth of crypto crimes were reported, making it necessary to address the risks associated with blockchain solutions to ensure security.
Several vulnerabilities are associated with blockchain-based protocols, such as a lack of control over decision-making, policy compliance, and access control. Risks concerned with fraudulent transactions, critical data loss, security breaches, leakage of funds, and audit and compliance issues are frequent phenomena with blockchain platforms.
Ways to Ensure Blockchain Security
To ensure blockchain security, users can take the following measures:
Enforce security controls unique to blockchain: There are almost 1000 different blockchain platforms, and every platform has its own unique features. Enforcing identity and access control, defining appropriate endorsement policies, taking care of the hardware security models, and adopting data classification approaches are a few ways to keep your blockchain secure.
Secure core blockchain technologies: Cryptographic keys that connect one block to another and ensure the originality of a smart contract are the fundamental security foundation of the blockchain network. This makes it imperative to safely generate, secure, and secure crypto keys.
Enforce safety access control to smart contracts: Smart contracts are a fundamental part of blockchain solutions. A certified blockchain security company providing auditing solutions for smart contracts is of utmost importance. A thorough review of one’s smart contract can prevent the chances of vulnerabilities like leakage of funds, gas optimization, and others, preventing your smart contract from a financial catastrophe.
Secure blockchain communications: Secure storage of crypto keys, providing a safer methodology for exchange of data and governing authentication to ensure secure integration of all blockchain transactions.
Blockchain technology has spread its wings worldwide, especially with the wider use of smart contracts to deploy one’s business on a blockchain protocol. While the decentralized technology promises security, it is not hack-proof and requires attention to prevent blockchain security breaches.