In recent years, blockchain technology has remarkably grown in popularity and adoption. Today, even traditional banking firms are now embracing the innovation to make their operations seamless, consistent, secure, and faster. Similarly, other organizations have also adopted the tech to effectively manage distributed databases, digital transactions, cybersecurity, and many more.
This thus serves as a hint of how the use cases of blockchain have grown in the last few years. The decentralized finance (DeFi) sphere which is an application area of the innovation presently holds value worth $44 billion. Also, the cryptocurrency market capitalization is worth $1.18 trillion, other blockchain-based sectors like the NFTs and Metaverse have as well attracted massive investments over the years.
Certainly, the adoption of blockchain brings bountiful advantages to the involved firms or projects. However, despite its numerous benefits, it has been vulnerable to security issues in recent times. This thus birth conversations as to how to better secure this tech as it grows in adoption. Notably, this article will focus on how to achieve and sustain security on blockchain. But before this, it is pertinent to briefly discuss the functionalities of this tech.
What is Blockchain?
Blockchain tech functions as a distributed network that facilitates the decentralization of data stored in blocks. This data can then be accessed by any entity that wants to process it through verification, validation, and consensus. Before, people usually attribute the innovation to cryptocurrency only. However, its usage goes beyond the crypto world. Today, the tech provides enablement for organizations to store and process their data. Example of blockchains with various use cases are Polygon, Ethereum and Solana.
Meanwhile, blockchains are immutable. This means any data stored on the network is certainly irreversible. More so, they are decentralized, thereby averting the need for third parties. It also aids transparency. By virtue of this, transactions on the network are viewable through a node or explorer. Notably, each node possesses its own copy of the chain which gets updated upon the confirmation of new blocks. However, records stored on the chain remain encrypted to make it possible for only the assigned person to reveal their identity. This feature makes the blockchain to make the user anonymous while preserving its transparency.
The blockchain is secure due to its production of structured data. The technology is based on the principles of cryptography, consensus, and decentralization. The principles provided the innovation with sound security features and ensure authenticity in every transaction. Also, the blockchain splits data into blocks, with each of them containing information and value that cannot be tampered with. To incorporate a new value or figure, the blockchain produces new blocks that are connected to existing blocks in a cryptographic chain.
For more security enhancement, all transactions within each block are agreed upon through a predetermined consensus mechanism. This validation process helps ensure that information and value in the new blocks are correct. Meanwhile, in the blockchain space presently, Proof-of-Stake and Proof-of-Work consensus mechanisms are the two most prominent methods of validation.
Having numerous validators confirming a transaction on the blockchain further strengthens it. This is due to the elimination of a central body to determine the approval of a transaction. Additionally, the blockchain relies on the participation of members across various distribution networks to help verify transactions. By it, the blockchain gains security support as a sole user cannot alter the information or value stored in each block.
Likewise, the security structure of blockchains differs based on the type. Mainly, there are two types of blockchains; private and public blockchains. The purpose of the two categories is to help determine those that’ll have access to the network. Similarly, it also determines how network participants gain access to the blockchain.
It is worth mentioning that decentralization at times can affect the security of a blockchain. Having too many malicious network participants on the blockchain can pose harm to the smooth running of the network. Nevertheless, through decentralization as well, the blockchain can effectively curb any malicious validator that can hamper the smooth running of the network.
However, the outstanding security features of the innovation have earned it trust of various institutions, organizations, governments, and projects. They now trust the innovation to serve as a base for their respective projects. With assurances that their data are safely secure without any fear of manipulation.