Blockchain Technology: two vital features that make it secure
Blockchain technology is secured with cryptography, a tool that merges cryptocurrency and cryptoeconomics, the study of the economics behind blockchain. Learn more here
If there is one reason why many people trade cryptocurrencies and are interested in the blockchain, it has to be the security. People can literally complete transactions without having to trust the other party involved. In this article, we’d be sharing two vital features that enable blockchain technology to be secure.
What is a blockchain?
Blockchain technology is a decentralized and distributed ledger technology. This ensures that digital assets records are transparent and unaltered. Blockchain technology is protected with two significant tools: the cryptographic and crypto-economic tools. These tools help grant robust security to the blockchain.
Blockchain technology is secured with cryptography. Here's how:
Cryptography plays a vital role in blockchain technology by ensuring that cryptocurrency units stored in wallets get maximum protection. In addition, it provides maximum protection of the transaction records that are being made on the ledger.
Firstly, a blockchain is a collection of digital blocks….
- A blockchain is a collection of digital blocks that store transaction information.
- Each block is linked to every other block in the sequence.
- Thus, for a hacker to tamper with a single record, he would have to alter the block containing the record and other blocks linked to it.
Secondly, cryptography uses a hashing algorithm that identifies data……
- Blockchain technology security depends on the cryptographic tool because it uses a hashing algorithm that identifies data.
- This hashing also converts data blocks into a unique pair of numbers and alphabets. This aids the security of the blockchain.
- The cryptography hashing is of great importance. They function by obtaining input data of any size and returning (hash) output in a fixed and predictable size.
- The block hash relies entirely on the data included in the block; hence any change made in the block will also require a change in the block hash.
Finally, this cryptographic tool gives you a private key….
- The cryptographic tool prevents anyone from accessing funds that are reserved in the cryptocurrency wallet.
- Only the private key holder may permit these funds eliminating the unnecessary worries of investors.
- As long as the private key remains uncompromised and unshared, which has 99% not to. You're to be assured that your funds are in safe hands.
How Cryptoeconomics protects the Blockchain technology
In simple words, cryptoeconomics is the study of the economics behind blockchain technology and protocols. It also provides potential outcomes designs that may be present because of its participants' behavior.
Cryptoeconomics is critical in ensuring that blockchain technology remains secure against hackers. Crypto economics is very similar to the "game theory." This theory classifies decision-making by analytical performers in situations. They're able to achieve this by regulations.
Cryptoeconomics and the proof of work.
- The proof of work in the agreement algorithm used in mining Bitcoin offers you the best example about crypto-economics configuration if you're still confused.
- It’s almost impossible to alter a particular block in a cryptographic chain because a consensus process validates and agrees on all the transactions within the blocks, ensuring that each transaction is credible and correct.
Cryptoeconomics and nodes
- Cryptoeconomics also normalizes node behavior in the blockchain network.
- These nodes are electronic devices that ensure the system is continually working. They also store blockchain copies.
- Cryptoeconomics protects blockchain technology by providing more extraordinary grounds for the nodes to act transparently always.
Cryptography and Cryptoeceonomics are vital to the security of a blockchain...
- As a result of the communal efforts of cryptography and cryptoeconomics, blockchain technology has become indomitable by hackers and spammers.
- They also ensure a high level of security in the blockchain as a result of their decentralized and distributed systems.
- The security systems of blockchain technology will continue to progress as blockchain technology develops for the ultimate satisfaction of its participants.
- Finally, cryptography and cryptoeonomics provide essential safety to the blockchain, encouraging many investors to participate in cryptocurrency investment.