The Issue of Security in Blockchain

Blockchain is perhaps one of the most creative inventions of recent times. It was initially built for Bitcoin to store its transactions, but its potential could be further maximized. It was designed by a group of people who go by the pseudonym of Satoshi Nakamoto. Two prime features of Blockchains makes it all the more accessible. The first feature is its Peer to Peer (P2P) capability that essentially means that it is easily accessible to anyone with an internet connection to view these transactions which we will later discuss how. This leads us to the second feature which is that it is decentralized record system that makes it open to anybody who wants to view it. So, this makes it transparent and incorruptible. Given these features, much more potential could be unlocked and integrated with other domains like bringing transparency to the elections or creating crowd-sourced venture capital funds. This public ledger, that is Blockchain, can have various business applications. It is dubbed as a New Web 3.0.

This introduction leads us to a bigger question at hand; what is the blockchain technology and how does it work? To start off with this technology, we must identify it as a network of Nodes. It is an end user that is connected to the network to perform tasks of validating and relaying transactions. Every node is an administrator of the Blockchain. We must jump to the second prong of this technology that is Mining. This role is, in the vast majority of instances, related to cryptocurrencies such as the likes of Bitcoin which enables the end user or the node to win Bitcoins through mining. Cryptocurrency is won by solving computational puzzles. Blockchain mining is to add transactions to the existing network or ledger which, since it is open to all users, it is distributed among all participants of the network. These group of transactions are referred to as a Block and it cannot be corrupted. This process goes through the steps of Authentication, a verification that the member initiating the transaction meets all rules for this nature of transaction and Validation which occurs after the authentication. It is then when a new block is created to secure that transaction.

Despite all of its robust capabilities, it is still at times at threat of being hacked into. This was specifically the case when hackers emptied Ethereum wallets, a crypto cmmodity, by breaking the basic infrastructure of the internet. This pushed the companies to invest much more in Cryptosecurity, which in essence, protects the data of transactions through encryption. Ideally, only members or the participants of the network have access to these records of transactions. However, these records can land into unauthorized hands. This where cyptosecurity comes in where through tools of encryption, the robustness of these transactions can be enhanced that that they are not extracted further. There are cryptocurrency firms that help you achieve that. These include the likes of BitGo, Shift Cryptosecurity, CipherTrace and so on. Crypto investment bank, Galaxy Digital has very recently invested $15 million in cryptosecurity with CipherTrace. The goal is to ensure an anti-money laundering solution.

Although it is still in its nascent form, many companies and individuals are buying into this idea of protection for their digital and industrial assets. Given that it is incredibly secure, the prospecting of integrating their current IT infrastructure and their model is very appealing. Cryptocurrency is in and of itself a digital asset. This, along with crypto commodities like Ethereum and many tokens or digital coupons require security. It becomes pivotal to use blockchain technology to secure this digital asset. In the Industrial world, the shift towards blockchain technology is apparent. For instance, Toyota, a leading participant in the automotive industry is currently using the blockchain technology to track parts from multiple countries, manufacturers, and suppliers to the final assembly line. This decentralized network maybe very expensive to develop but the benefits may significantly overweigh the cost.

Lastly, it all boils down to the idea of trusting this technology. The prime reason why this is being adopted to protect transactional data is because companies are beginning to trust its discretionary nature and robust network. This is primarily due to the decentralization of technology encapsulated in its Peer to Peer use which makes it even more worth the investment.