Why you should know Blockchain in the 21st century
There are only two types of companies : those that have been hacked and those that will be. ~Robert Mueller (FBI Director, 2012)
Security issues can affect any company and can cause serious loss. There are new security concerns each day and it is quite important to secure the data stored and minimize the risks to ensure safety and protection. Most popular emerging threats and vulnerabilities are concerned with transparency, click jacking, middlemen issues, centralized systems and so on. Most of these can be solved using blockchain technology.
Blockchain has come a long way from a simple peer to peer network created by Satoshi Nakamoto. Satoshi described “blocks” and “chains” as a way of organizing and securing records, such that once entries had been made into a shared database, they could be proved mathematically correct and to have remain unchanged. It is a publicly accessible i.e. open digital ledger with high transparency among the users and ensures immutability of the data stored i.e. recorded transactions. Simply put, it is a trusted record keeping system. Some popular use cases include Bitcoin cryptocurrency platform, Ethereum, Hyperledger, etc. However, it is to be noted that blockchain can be used beyond cryptocurrency applications as well. The key traits of blockchain include distributed, immutability and transparency. These features differentiate this internet database from a regular centralized database. Let’s discuss each of these in detail in the forthcoming sections.
Key traits of Blockchain
This section shall dig deeper into the features of blockchain and they make it different from a usual database.
Open : The ledgers and records stored are publicly accessible to everyone on the network that means anyone can read and access the data without any permissions.
Distributed : There is no central database which records all the transaction and no central authority to control and monitor the transactions. It is a completely decentralized/ distributed platform i.e. a peer to peer network. It is managed autonomously by the peers in the network. This clearly minimizes the risks of making wrong decisions and frauds that would arise in case of a single controlling authority.
Transparent : It’s obvious by now that there is high transparency maintained among the peers. Everyone would be aware of all the transactions and data storage. So there is no scope of frauds occurring in the network as each user would have knowledge of each other’s data for example cryptocurrency balance, transaction history and so on due to the shared copy of the ledger. This clearly shows that there would be no privacy maintained, all your information would be public.
Immutable : Once the data is entered into the blocks, it can not be modified or deleted at any cost due to the cryptographic hashing that takes place. Each block has a unique hash value which is generated using the previous block’s hash value. Considering the fact that hash values are unique for each input, it is very easy to detect any changes in the data stored as the hash would change completely. Thus integrity can be ensured. Also, if any data is to be altered, a new hash has to be generated which means all its previous hashes have to be altered as well as they are all interlinked. Hence, the data is never modified and is permanent.
Verifiable : Each transaction that takes place in the network is strictly verified and validated by validators and miners. Since the data is publicly available to all, each user can verify that the transactions are legitimate and minimize errors and frauds as they are verified multiple times.
Anonymity : No user ID is shared, no peer will have true knowledge of the peers. Only details like wallet ID will be used which wouldn’t reveal anything about the user. So there won’t be any privacy concerns as your true identity is never exposed. Sometimes, this can be problematic to track down fraudsters.
This is how blockchains can be a much better solution to the current security threats and outperform the regular centralized database systems. However, there’s more to blockchain like its key components, working procedure, some security threats which are supposed to be known and shall be discussed in the forthcoming posts.
Thanks for stopping by this article and I really hope you did find out something new and useful today 😊!
Have fun learning. See you next time! Until then check out my other stories at AskPranaviSree.
Byee!
