This new type of money was known as Bitcoin, and it started in 2008. It was supposed to be safer and more private than regular money. However, there was something more amazing hiding behind Bitcoin, a technology known as blockchain. Blockchain allows people to deal with strangers and to do business without trusting the other party involved at all. It was like magic, only using math.
In contrast, you didn’t have to trust the person you were dealing with Bitcoin. A special book recorded all of this, visible to everyone. It was very safe because many computers worldwide copied it.
Would such people be confident they can trust such a new system? What if someone can hack it, or it’s not fair? This article will explain why the system is suitable, why it is almost not possible to cheat, and why it is a very hard nut to crack. Therefore, yes, you can rely on it.
It is not only regarding Bitcoin, but it also works with other blockchains such as Tron and Ethereum. They’re okay as long as they’re big and genuine.
It is almost 13 years now, and the world is not the same as it used to be. There are several ways in which people are putting money into Bitcoin and other cryptocurrencies. However, cryptocurrencies have yet to become real money, but many industries use blockchain. It is gaining popularity among more and more businesses and ordinary people.
So, What Exactly is a Blockchain?
You can imagine a computer system called a blockchain. It is like an ultra-secure digital diary that stores the essential records, like who holds how many items like Bitcoins.
One good thing about a blockchain is that it writes data into it. It cannot be changed, just like a real treasure map that no one can corrupt. That’s why large organizations, like banks and the government, want to take advantage of it.
A blockchain divides information into blocks, just like a toy set of building blocks. Each block contains a particular amount of data. It occurs the same way one adds a new page to a notebook when one block is full.
They put all new information into the new block at the end of the chain. Thus, everyone in the network will have the same information, and no one can cheat. A block behaves like a locked box that nobody can open. It also includes a time stamp, displaying the order of addition, similar to a time tag.
Moreover, there is some advanced mathematical stuff that ensures no intruders can alter the content in the blocks. When someone tries to tamper with it, the system knows it’s like someone tripping the alarm. Therefore, we depend on blockchain for the safekeeping of our details.
Is Blockchain Secure?
Sometimes, you know about issues in the world of cryptocurrencies. Such narrations often make headlines since they are interesting. Before worrying about your digital money, ask yourself a crucial question: Was the issue due to blockchain security, or did websites mishandle user accounts?
It’s worth noting that hackers have targeted Bitcoin websites and exchanges, but they have never compromised the Bitcoin system itself.
For instance, in 2014, MT Gox got hacked. And then, in 2019, Coinbase, one of the most well-known platforms, had a case. The crafter succeeded in tampering with a chunk of Coinbase, altering transaction histories. It allowed people to use one currency twice. Coinbase experienced a hack, so it’s important to realize that not all platforms can ensure their clients’ safety.
It explains why many companies embrace it because it is innovative and powerful. Some of the latest smartphones from Samsung incorporate blockchain features to make them more secure. Despite the high security of blockchains, there are still several tricks that an alert person can employ to exploit loopholes.
Half the Network Plus One
To hack a blockchain, someone must control over 51% of the computer power in the network. These attacks are called 51% attacks.
Why 51%? Okay, each network computer carries the blockchain with it. Most computers will disapprove of the fake blockchain because it does not match their version of the real one. However, if they own 51%, the other 14% must take the phony version.
Is a 51% attack possible? Yes, in theory, but it’s really hard in practice. That would mean having a lot of money, equipment, and expertise. Additionally, you’d have to change every block in the chain and the fake ones to every computer in the network.
For example, consider the Bitcoin network. Most computers are in China, but there are more in other parts of the world. No one, even governments, can practically control 51% of those computers.
In addition, there are also other things to keep an eye out for, like the loopholes in smart contracts. These are just like computer programs that transfer cryptocurrency upon meeting certain conditions. Bugs present challenges because they demand the execution of blockchain transactions.
Blockchains are quite complicated. We have been taking Bitcoin as an example, but there are other advanced blockchains like Ethereum. Those are even trickier, and they are similar to the operating system of a computer, which means that they are more complex.
Some people will still abuse blockchains, even though others can access them. Cryptocurrency platforms are hacking targets for hacking specialists who learn to make money on media that have weak security. However, it’s important to remember that the platforms on top, not the blockchains themselves, are the ones that get hacked.
Blockchains should be extremely secure to be more than cool technology and prevent hackers. And more importantly, the public has to believe they’re safe, too, especially if we use them to conduct a secure election.
Blockchain Safety, Point by Point
Now that we’ve outlined the overall security landscape in blockchains, let’s examine the different components that guarantee blockchains remain unhackable.
Open-source and Decentralized Software
Peer-to-peer networks powered by open-source software are the dominant dynamics in blockchains. It offers several advantages. To begin with, anyone with the necessary equipment may participate in a blockchain. Second, it provides a high level of openness, which increases public faith in the system.
The network’s decentralization, which is one of its key advantages, ensures that the system as a whole cannot fail. If a single node fails, the other nodes will continue functioning normally. Decentralized networks are analogous to perpetual motion machines. Once turned on, you can’t turn them off. You cannot kill a headless snake because there’s no head to chop off.
Algorithms for Hashing
Mathematical tools in cryptography and hash algorithms function uniquely by being irreversible and lacking an analytical representation; you can’t express a hash as a formula because it’s an algorithm. The concept is that they reduce a large number to a small number so that the chances of various inputs producing the same result are insignificant in practice.
A resolved hash precedes every new block. Because soups are not analytical, addressing this problem (a collision) requires massive computational power and cannot be faked or reverse-engineered.
Creating new Bitcoins happens when you solve the network’s problem. If you compute the hash input required to start a new block, you earn a few Bitcoins in exchange for your efforts.
The 51% Issue
Yes, that is feasible. But only if you have unlimited processing power and money, as well as an extensive understanding of blockchains and cryptography. If you can, you can conduct a 51% assault on any network and win. In other words, 51% of assaults are theoretically viable and can bring any blockchain down.
Now, let’s get serious. Each person or group needs help to gather enough resources to launch a 51% attack on a network as large as Ethereum or Bitcoin. And even if they did, the cost would be so high that the payoff would be insufficient to compensate for the effort. If someone has that much money to burn, numerous alternative options are either more profitable or more enjoyable.
What Will Happen in the Future
There is no hacking of any blockchain. Such people on the inside work with outsiders to make some bad things and any problems you hear about. Therefore, although blockchains may have issues, it is quite difficult for evil people to succeed, and today is not a serious problem.
The blockchain network increases its strength over time, with more and more computers joining it. It is more difficult to breach into bigger networks. Hence, the probability of hacking a blockchain is becoming less and less.
Also, blockchains were launched by one or a few experts when they were new. However, plenty of bright computer scientists and mathematicians are working on them nowadays. It makes the entire cryptocurrency world much stronger and solid.
Bugs present challenges because they demand the execution of blockchain transactions. Taking into account what we know now.