With new blockchains popping up on the scene all the time, things can start to feel a little overwhelming. Maybe you’ve heard about an exciting new blockchain project that seems too good to be true. That’s great! But maybe rein it in a little cowboy – is blockchain secure?
Well, that’s where we come in. We’ve compiled some tips for you to ensure that the new blockchain on the, ahem, block is as secure as it seems. Let’s dive in.
What is a blockchain?
So, first thing’s first: What exactly is a blockchain? In short, a blockchain is a system (software or network), which holds a ledger of transactions made in Bitcoin (BTC) or other cryptocurrencies. It’s essentially a type of IOT or Internet of Things. Blockchains are maintained across multiple different computers and are linked via a peer-to-peer network. The first blockchain was invented in 2008 by Satoshi Nakamoto, the founder and creator of Bitcoin (BTC).
Is Blockchain Secure?
Blockchains are secured via a large variety of cryptographics and mathematical techniques. As a structure that defines both how we use cryptocurrencies and how they function, it’s incredibly important that blockchains are as secure as possible.
There are so many different features that come into play when it comes to securing a blockchain, but arguably the two most important concepts are that of consensus and immutability.
Big words, we know. Let’s break it down.
Consensus is essentially the ability of nodes within a decentralized network (blockchain) to validate transactions. This process is dependent on consensus algorithms, which really just refers to the process by which the various nodes come to an agreement on a single data value, within the decentralized system, that is then added to the ledger. Whether the transaction involves cryptocurrency, it doesn’t really matter – blockchains can be used to transfer many forms of data.
Immutability is a little more simple. It just refers to the ability that blockchains have to prevent any changes being made to transactions that have already been validated. These transactions usually take place in the form of cryptocurrency transfers, but other non-monetary forms of digital data can be transferred over a blockchain.
The concepts of consensus and immutability are what provide the framework for a secure blockchain.
So, how do you know if the blockchain you’re investigating is secure? Read the whitepaper! Or at least skim it. These two processes are super important, so if the whitepaper mentions them they likely know what they’re doing in terms of security.
I still don’t know if this blockchain is secure!
If you’re having reservations about a blockchain’s security you should probably go with your gut. Do your research, plan carefully and take it slow! Ultimately, the concepts of consensus and immutability should guide you – read the whitepaper carefully and ensure that you’ve done enough investigating into the blockchain in question, particularly if you’re looking to buy or transact with cryptocurrency. Is blockchain secure as a whole? It definitely can be, but each project is different and you’re always advised to DYOR.