Well, we have heard a lot about Blockchain and Bitcoin. It is said that this is undoubtedly going to be the technology of tomorrow. It is going to transform the way business is done and how things work. But, amidst all this, we want to know if this system is really what it’s claiming to be or its just a bubble. Imagining a system which is full-proof and free from any loop is unbelievable. So, lets put on our learning glasses and start exploring, we used resources like https://thebitcoinsystem.io/ to discover if Blockchain is full-proof and is not vulnerable?
Where is Blockchain hosted?
After going through so many articles and news about Blockchain, a person would naturally think, where is this thing hosted, where does it come from, etc. Well, frankly, Blockchain can be hosted anywhere. All you need to ensure is that you must have high availability so that users can submit transactions. Bitcoin does that by having 5000 nodes spread across the globe.
You would have often heard about types of the Blockchain, but for our question here, we will stick to consortium Blockchain which is a more generic one.
In this system, the consensus process is managed and governed by a pre-selected set of nodes. For example, there ten financial institutions which operate at each node. Out of these five must sign every block to make it valid. In simple terms, in case of the private Blockchain, the nodes belong to a regulator who comes together to work.
In real terms there is nothing called as the Blockchain, rather it is merely known as DLT or Distributed Ledger Technology which means scattering of nodes within the regulator. There is no access to the third party as the regulation of the same lies within the system.
Is Blockchain vulnerable?
Any new technology that comes up comes with a specific set of questions. The Blockchain is no different. Since the time it started making headlines for good, it also garnered the attention for its vulnerability to get hacked. Well, the propagators have their side of the story, but we cannot ignore the fact that every technology is prone to vulnerability, and same is the case with Blockchain.
Why can Blockchain not be hacked?
If the propagators and supporters of Blockchain are to be believed then, hacking this system is difficult since it is a decentralized one. The most significant problem for the hacker would get a powerful computer to bash the current Blockchain mechanism. It can only be done if there is a creation of quantum computer
What makes us question Blockchain safety?
The reason we are talking about this is that in August, “51 Crew” a group of hackers attacked Shift and Krypton, Blockchain clones. They took control of around 51% of the network which led to the loss of about $65 million Bitcoin from Bitfinex (a Hongkong-based exchange).
Another incident dates back in May 2016, when the hackers hacked the DAO or the Decentralized Autonomous Organization. It led to the forking of Ethereum Blockchain. Another incident of DNS attack on Blockchain.info makes us think if this system is full-proof which it claims to be.
How to handle the hacks?
It surely doesn’t mean that we cannot come up with a better system wherein the information is safe and secure. Here are some of the shortfalls from the previous attacks and suggested measures which can help in resolving the issues:
|Stealing of private key||Better key management system|
|Software vulnerability||Better written smart contracts|
|Network Takeover||Alternative consensus mechanism|
|Integration Risks||Non-dependency on single system|
The Final Verdict-
We already know that Blockchain Technology is at a nascent stage and expecting it to be work 100 percent efficacy is not a justified demand. Although there are claims that this is an impenetrable technology which is difficult to hack, the series of incidents makes us rethink. Any technology matures over a period where it comes with rebuttals to all the proposed dangers and challenges. Similar to this, Blockchain will also mature over a period. We still don’t have laws and legal procedures in place; many nations are still thinking about making it a part of a mainstream financial functioning, etc. Amidst all this, the sets of benefits which offer are commendable. But, to say that this technology is 100 percent safe will be an overstatement for now.