Blockchain is the technology that works on digital currencies like Ethereum, Litecoin, and Bitcoin. The technology allows the digital information to get distributed but not copied, that means an individual piece of data can have only one owner. The information on Blockchain technology is regularly updated and is stored in many locations. As there is no central location, technology is hard to hack. Blockchain technology was first invented in 2008, but it became popular after the launch of Bitcoin.
What exactly is Blockchain technology?
Blockchain is a ledger that allows people to make instantaneous transactions on a decentralized network. All the records are kept on the Blockchain transactions, and the strong algorithm makes sure that no transaction is hacked or altered. Each block is a ledger that lists the order in which the transactions have occurred.
Blockchain allows individuals and businesses to make instant transactions without the involvement of any middlemen. Transactions are completely secure and are recorded. Cryptographic encryption ensures that no record gets altered.
A Blockchain is a chain of blocks that have data held together in a particular order. The data stored have all the information regarding the transaction. This information is expressed in Hash.
Is Blockchain vulnerable?
Every time a new technology is launched, there is a specific set of questions related to that. Blockchain is no exception. Since the time it has started making headlines, it has attracted the attention of investors for its vulnerability to get hacked. The supporters have their side of the story, but we can hardly ignore that every technology is prone to vulnerability, and so does the Blockchain.
Why can Blockchain not be hacked?
Blockchain technology is a group of technologies that can be used together to build different applications and results. It can be easily customized as it’s open code. Blockchain is a decentralized ledger of transactions which are verified in the way that is appropriate for a specific Blockchain application.
The verified transactions are grouped together and sealed cryptographically in a data block, which is called Hashing. Hashing is capable of converting the data into a string of symbols. No one can reverse the Hash back into original data, which makes the data immutable. The new transaction has the stamp of each prior data of the Blockchain, which is needed to verify the current asset holder. Assets are transferred only by authenticating the transaction history.
The blockchain transaction ledger is decentralized, which is why there are copies that exist on numerous nodes. Computers that participate in Blockchain applications are called Nodes. In public Blockchains, the number of nodes can reach to millions. To make a change in Blockchain, at least 51% of the nodes participating must verify. While theoretically, it is not impossible to reverse a hashed block, but the number of permutations that a processor has to go through is overwhelming. In addition, 51% of the nodes also need to be hacked.
Why are some people questioning the Blockchain safety?
There has been news that a group of hackers “51 crew” attacked Krypton and Shift. They took control of 51% of the network, which caused a loss of $65 million Bitcoin from Bitfinex. Another incident happened in 2016, May, when hackers hacked DAO, which lead to the forking of Ethereum. Such incidents make us think if Blockchain is a full-proof system that it claims to be.
Is Blockchain actually useful?
Privacy is something that lacks in our digital world. The bank where you keep your money knows exactly where you are spending your cents. This information is sold to credit agencies and insurance companies. Blockchain technology was created to control our financial privacy. There are few cryptocurrencies that focus only on privacy like Monero, Beam, and Zcash. These are created in different blockchains, but the technology makes them private, trustless, and possible. You can keep your privacy intact by using privacy-focused cryptocurrencies. As these data are not shared with banks, they cannot share, sell, and judge the data that they don’t have.
Blockchain technology is at its nascent stage, and hoping it to work with 100% efficacy is not a justified demand. Although the propagators of the technology believe that it is impregnable, the series of attacks force us to rethink. We still lack the laws and legalities surrounding Blockchain technology, but with passing time, the adoption base for the technology will grow, making the Blockchain technology to mature over a period of time.