A blockchain, as the name signifies, is a chain of digital “blocks” that contains records of transactions. Each block is connected to all the blocks before and after it. This makes it difficult to tamper with a single record because a hacker would need to change the block containing that record as well as those linked to it to avoid detection.
So, that is why the term blockchain itself is seen as something very secured. But what is the technical part or mechanism of it that makes blockchain secured?
Decentralization basically means to not have one single entity to store your information. In other words, if you want to have an interaction or transaction with someone, you don’t need to go through a third party.
A simple example of the difference between centralized and decentralized network is in the transaction of money transfer. In a centralized environment, you need to get approval from the bank or financial institution, whereas, for decentralized nature, you don’t have to, even if it is cross-border. Simply put, only you are in charge of your money.
Since decentralized system is based on various components, it is more difficult and expensive to be attacked or damaged or manipulated.
Cryptography means to encrypt and decrypt data using mathematical theories and computation in order to secure the integrity and authenticity of information stored. Does this sound very alien to you?
It was for me too. So, let me explain it as simple as possible. Cryptography is essentially the art of hiding secret. Let’s say you and your colleague are going to gossip about your boss, in the office. Therefore, you create a box with a lock to put a letter with whatever you got to say to your colleague.
Each of you will have a key to open the box to read and reply the letter. So, the box is blockchain, the keys are the ciphers. The process of locking the box with letter is encryption and to open the lock and read is decryption. How blockchain is secure than the box is that, blockchain is scalable and unbreakable.
Consensus in general means a process of making decision as a group where each party needs to be involved and agreed. Same goes to consensus for blockchain, the nodes (users) on the network agree on the same state of a blockchain, in a sense making it a self-auditing ecosystem.
This is security feature because once it is agreed and stored, it cannot be disputed, removed, altered nor questioned without the permission of those who agreed. Unlike a centralized system where the authority of accepting, rejecting, maintaining and updating a data is relied on a central administrator.
In such a dynamically changing status of the blockchain, these publicly shared ledgers need an efficient, fair, real-time, functional, reliable, and secure mechanism to ensure that all the transactions occurring on the network are genuine and all participants agree on a consensus on the status of the ledger.
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Although the blockchain technology is in the verge of evolving, the security flaws are patched up quickly or better still a greater version (hard fork) is generated. So, without a doubt, decentralized blockchain is for sure a safer and secured solution for storing and exchanging data and digital assets.
Thence, all these factors make it extremely easy to trust the blockchain technology and can be easily embraced for most of the business, governance and administration needs.
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