Is Blockchain Completely Secure?

Dec 21, 2021
4 min read

The whole point of using a blockchain is to allow people — especially people who do not trust each other — to share crucial data in a safe and secure way. The blockchain uses complex statistics and new software rules for storing data, and it is difficult for an attacker to manipulate. However, the security of even a well-designed blockchain system can fail when luxury statistics and software rules interact with humans, and people are skilled cheaters, and in the real world, things can become totally messy.

Blockchain is often referred to as a secure way to store information, but how secure is it?

Although nothing is 100% secure, the blockchain is designed to remain consistent, flawless, and democratic.

With the popularity of its applications, blockchain security has become increasingly important - not just for cryptocurrency investors.

Blockchain Security Basics

Blockchain is not Immune to Hacking

The blockchain is not immune to hackers' attacks, but decentralized provides a better blockchain defence line. To change the chain, hackers or criminals need to control more than half of the computers in the same distributed ledger (this is unlikely, but it is possible).

The largest and most popular blockchain networks, such as Bitcoin and Ethereum, are public, and anyone with a computer and internet connection can participate. Having more people in a blockchain network tends to improve security rather than create a security problem. Many participating nodes mean that most people look at each other's work and identify bad actors.

The Role of Miners in Blockchain Security

As Bitcoin and other forms of cryptocurrency become more and more popular, the mining process is also becoming more and more popular. For speculators, cryptocurrency mines are a way to accept cryptocurrency or tokens. With cryptocurrency itself, mining contributes to blockchain security because it is a way to ensure the integrity of the blockchain is fundamental to their currencies.

Miners verify transactions to ensure valid and compliant blockchain code. Popular cryptocurrencies such as Bitcoin and Litecoin submit Proof of work (POW) algorithmic evidence supporting or prohibiting each transaction and receiving payment in coins.

How Blockchain Security Prevents Double Spending

In payments and shipments, the blockchain can be used to prevent "double use" attacks. This attack is a major cryptocurrency issue. In a double-spending attack, users will use their cryptocurrency more than once. This is a non-financial problem. If you spend $ 5 on a sandwich, you will no longer have $ 5 to spend. But with crypto, there is a risk that users will use crypto several times before the network is detected.

Blockchain helps prevent this. In a given cryptocurrency blockchain, the entire network needs to agree on the sequence of transactions, verify the latest transactions, and publicly publish it.

Bitcoin is the first type of crypto to solve the problem of double-spending. It is an example of how blockchain can help protect the financial integrity of all records. If someone wants to spend the same bitcoin in two places by sending the same bitcoin directly to two recipients at the same time, then two transactions will first go into an unconfirmed trading pool.

The first transaction to be verified will be added to the coin blockchain as the next data block in its transaction history. The second transaction - connected to a block that has been added to the series - will not be chained, and transactions will fail.

Blockchain Security Risks

However, even if the blockchain environment itself provides security, coupled with a global network of nodes and miners continuously ensuring and protecting blockchain integrity, there are still risks.

1. No Human Safeguards

One risk is also a perceived advantage: blockchain creates a seamless way of making a transaction. No manual intervention is required to send or receive funding, which removes some of the most humane safeguards that have emerged over time. While these technologies help to ensure the ownership of the goods or the integrity of the information involved, they do not know the sender and receiver at all. There is a place where the Central Clearing House can exercise important insights.

2. Costs

Some critics point out that the cost of maintaining a network that makes blockchain work is high. The process of mining these coins is as important in their credibility and viability as operating currencies, and they use a lot of energy. According to Morgan Stanley, the total power consumption of the Bitcoin network equates to the electricity needs of 2 million American homes.

How to Choose a Secure Blockchain Network

Users can take certain steps to ensure that the cryptocurrency exchanges of their choice are secure. Here is a checklist that you can use when you choose to swap:

· Does the market hire auditors to detect system errors?

· Are the goods of the exchange store in "cold storage" (somewhere without an internet connection - think of a paper wallet with a secret key)

· Do they offer security options such as suspicious activity alerts? Two-factor authentication? The transaction of multiple signatures?

Best Practices for Blockchain + Security Examples

Given the fact that blockchain security issues exist, it is best for individuals and businesses to establish their own blockchain security infrastructure from the inside to protect their blockchain operations.

This is to understand the cyber threats listed above related to blockchain technology and how to control these threats. Adherence to the best cybersecurity practices is very helpful in protecting our data stored on the blockchain network.

To do this, please consider the following steps to improve your blockchain security:

· Use a VPN to encrypt your online activity and avoid router attacks.

· Do not share your key with anyone to avoid being robbed.

· Do not leave your devices unattended to prevent malicious characters from accessing them.

· Learn how to detect criminal attempts to steal sensitive information by recognizing suspicious or unfounded news.

· Do not modify data in the blockchain to avoid revoking your user rights.

· It also gives you peace of mind with these examples of how organizations and companies are using blockchain technology to protect your data.

Final Thoughts

In the blockchain, security is an advantage and a concern. Cryptocurrency transactions — including paying with crypto, investing in crypto, and crypto lending — are unknown and partly protected by how blockchain technology is developed. But like many other technologies, it is not entirely immune to tampering.