Blockchain transaction happened but not what transaction happened.
Blockchain is one of the emerging technology in recent years, which follows the distributed leger principle for maintaining a tamper proof record of all the transactional data. It stores the data in a decentralized database that is managed by peer-to-peer networking systems. All the systems in the network will have same transactional history instead of one company that holds one database, and the data will get validated by everyone in the network at the same it constantly validating itself.
So how secure is Block Chain
All the transactions are stored in cryptography, so basically we can see that a transaction happened but not what transaction happened. Parties initiating the transaction need not to trust each other but trust the consensus algorithm between them, so basically it eliminates the need for a trusted third party to complete a transaction.
Two primary components which Block Chain, decentralized network facilitating and the electrical ledger that network maintains.
Blockchain algorithm uses cryptography to display the transaction data. Over the decades cryptography has been vastly used, and which were thought to be unbreakable has been broken and we witnessed some defective implementations of crypto code where, even a single error can lead to a critical failure.
So hackers might attack,
· Cryptographic algorithms and libraries it’s built with and the random number generator that’s used to create keys – random numbers with insufficient entropy lead to weak encryption.
· Computer participating in a blockchain and replace its encryption libraries with defective ones. You might use a key logger to collect a passphrase that a user has to enter to participate in a blockchain (or access their crypto wallet).
· Exploit vulnerabilities like the recent CPU flaws SPECTRE and MELTDOWN to gain access to otherwise protected memory and try to read or tamper with data before it’s actually encrypted and added to a blockchain’ s distributed ledger.
· Fire up your quantum computer and use it to simply break the encryption used by a blockchain. I suspect that of these approaches this is the least likely to succeed, but I wouldn’t want to disappoint quantum computing buffs by leaving it out.
So even a well-designed blockchain algorithm or protocol which looks completely secure, the implementation and the applications build using it, may not be completely secure.
Obstacles in front of Block Chain
· Education, How to explain someone what it means to “create a new block” on the blockchain? What is a “block” in the first place? What’s actually happening?
Facilitators should also consider who really needs to buy into using blockchain technology in order for it to scale.
However, every single consumer needs to fully understand how to build a block on the blockchain. For instance, users don’t really know how the Internet works, but they have basic understanding on how to use the programs built on top of it. So users need a language understandable enough.
· Scaling the technology, here it is less to do with understanding, and more to do with how the technology will scale as mass adoption begins
This issue can be viewed from a few different angles. Currently, there are mostly public ledgers with a handful of permission ledgers but a permission ledger, at the end of the day, is starting to feel very similar to a database.
This raises a question, What if every company or every industry has their own permission ledger?
The main obstacle, would be to have the public ledgers store data and able to anonymously transfer serial numbers to large-scale adoption of blockchain.
· Regulations, entities sometimes trail technology innovation, and that is surely the case with blockchain. New products and services are rising based on blockchain transactions, but there are currently no regulations on how the transactions should be written. Even though tamper proof and transparency are major benefits of blockchain, highly regulated industries may require to have new regulations for blockchain
Blockchain itself is not an actual application but, it is a tool that we use to do other things. In other words, it is part of a technology stack using other tools and we use it to build applications.
Experts claim that, blockchain not only has a place in cryptocurrency exchanges but could also be used to improve security solutions.
Neither one of the above obstacles will be solved overnight. It takes time for new technology, to evolve, especially something as innovative as blockchain. Going back at the early 90s, these were the same obstacles that confronted the Internet. People tussled to understand it, and others suspected how such complicated tech would scale to mass adoption.