Blockchain can be hacked or not?

For a while, the media was rife with news of scams, hacks, and widespread uncertainty regarding blockchain and its related entities. It is futile that most of the society is still largely ignorant or misunderstood about this technology and generalizing its abuse, especially in the aspect of cryptocurrency, leads to a complete abandonment of blockchain. carelessness.

If you're reading this, chances are you've heard about blockchain or Bitcoin from an acquaintance and are curious to learn more while you're neutral on the subject. When it comes to security, the question “Can blockchain be hacked?” remains of interest to new entrants.

Essentially, Blockchain is decentralized. When you take away the intermediaries and distribute the authority or functionality of a central authority over a large network, there is greater transparency throughout the system, allowing for greater efficiency, more trust. and lower costs. In addition to decentralization, the blockchain is also secured by cryptographic algorithms.

The way this thing works is when a transaction takes place and is processed on-chain to be verified. Once verified, it is grouped with other newly verified transactions and cryptographically sealed together, also known as 'hashing', in a block of data of fixed block size. determined. This happens cyclically to continuously update the blockchain and all blocks of data are stored in a linear and temporal manner. Each newly generated block of data will contain details of hashed information, e.g. timestamps, traces of blocks before it, and transaction data. The ever-growing list of blocks of data or records linked by cryptography is why the technology has its name: Block-chain or Block-chain. So for any given asset traded on the blockchain, you can see who owns it at any given time and the events that occur during its lifetime.

Blockchain is designed to be resistant to data modification. In other words, once a block of data is completed on-chain, it cannot be changed and the transactions contained in it are immutable. For one, since encryption is involved, it is almost impossible to reverse the hash of a block of data. Hash algorithms are specifically designed for one-way operations to give a result that is not (easily) recomputable. To produce a hash output, the number of possible inputs is infinite.

Perform a simple math operation like addition, which takes 2 inputs to produce an output.

Given 2 input data, we can easily calculate the output:

4 + 6 = 10

But given the output data, there are infinitely many possible combinations of the two inputs:

1 + 9, 2 + 8…

A hash function works in a much more complex and intense way than illustrated above, so you can see why reverse engineering a hash function is a high-end command that takes a lot of time compared to the complexity of a hash function. the current computing power we have.

Even if someone reverses a single hash and somehow changes the contents of a block of data, the stamped details will disagree with the hash information of the rest on the block trail. linked and the system will automatically reject the wrong data block. To successfully change and deploy a single block, a hacker would need to change every individual block on the blockchain afterwards. Recomputing all those hashes would certainly require a huge amount of computing power and would be nearly impossible to do.

Furthermore, the 'consensus' process helps to filter out incorrect or potentially fraudulent transactions from the database. Decentralized means that many computers or nodes on the network keep a copy of the blockchain ledger. To modify information on the blockchain, 51% consent or consensus from the entire network of nodes notices and verifies the change.

One could argue for a hypothetical scenario whereby a bad actor gains control of more than 50% of the network's computing capacity, or what is commonly known in the industry as a '51% attack'. Fortunately, established blockchain networks like those of Bitcoin and Ethereum have countless participants so capturing 51% of the network is extremely difficult. For blockchains that rely on ‘mining’, the offender has to buy a lot of hardware to power 51% of the network’s computing power. For blockchains that rely on 'staking', the offender has to buy all the liquidity out of the exchanges to get 51% of the tokens staked on the network, which is ironically damaging to the interests of the exchange. their own interests. In any hypothetical hacking event of either of the two examples above, network hijacking becomes extremely unattractive and therefore highly unlikely.

Many people confuse hacking of cryptocurrency exchanges or online wallets with an attack on blockchains, with headline news focusing on exchange sites where people trade and hold cryptocurrencies. . (*Note that blockchain is not equivalent to cryptocurrency, which functions as a resource on the blockchain network in relation to token usage. For example, Ether is a cryptocurrency derived from the Ethereum blockchain.) Most These thefts can be blamed on poor basic security practices, or failures at the end-user level or the organization's own centralized model. For instance, a hacker can gain access to cryptocurrency held on an exchange in a user's wallet by stealing the credentials needed to facilitate a transaction, before the funds are transferred. stole it in my wallet. However, these are all potential criticisms of the cryptocurrency system and not the security of blockchain technology.

With explaining blockchain technology at a more fundamental level and explaining the hacks that the public hears about in the media, can we conclude that blockchain is completely safe from attacks?

On the other hand.

A 51% attack happened before and the cryptocurrency is still quite susceptible to it; people are also discovering security holes and weaknesses, such as bugs in smart contracts/programs. However, blockchain is still relatively safe, secure, and preferred over other existing transaction methods today; when people really understand the value of transparency, immutability and some of the advantages that blockchain can offer to consumers; when it is used properly compared to the traditional methods we are so used to. Blockchain technology actually consists of a group of different technologies combined and customized for different needs, and will continue to be developed and improved for a multitude of possible real-world applications. Hopefully this reading has enlightened you to some extent, to see a little bit of difference beyond the fear that the media, government, and human ambition are sowing.

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