Blockchain Security: A simple explanation for human beings

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Blockchain Security: A simple explanation for human beings

The introduction of blockchain technology by Satoshi Nakamoto in 2008, with the creation of Bitcoin, marked a significant milestone in our digital world. The unique security aspects of blockchain technology-rooted in principles of encryption, block dependency through hashing, computationally intensive hashing mechanisms, and decentralization-are critical for its robust security. This article explores these concepts and their historical significance.

Encryption and Quantum Resistance

Encryption, in the simplest terms, is like a secret language that keeps information hidden from prying eyes. It's been around for centuries, as far back as Ancient Egypt, with secret hieroglyphs scrawled on the walls of the pyramids. Today, the language of encryption has changed, but the purpose remains the same - to secure our information. In the world of blockchain, this secret language takes the form of something called public-key cryptography, a system that makes use of two distinct 'keys': public and private keys. Think of these keys in terms of your email account. Your email address, which everyone knows, is like your public key. Anyone can use it to send you an email (or in blockchain terms, encrypt a message). But to access and read your emails, you need a password, something only you should know. In the realm of public-key cryptography, this password functions like your private key. It's used to decrypt the messages or transactions encrypted with your public key. This dynamic duo, public and private keys, introduced by Whitfield Diffie and Martin Hellman in the 1970s, forms the bedrock of secure and anonymous transactions in the blockchain world.

However, as our digital universe expands and evolves, new threats emerge. One such threat is the rise of quantum computing. Quantum computers are like super-powered versions of our regular computers. They can process information at mind-boggling speeds, so fast that they could potentially crack the secret language of our current cryptographic algorithms, including the public and private key system. But fret not, the guardians of blockchain are already working on a solution. The blockchain community is researching and developing what's called quantum-resistant encryption algorithms. These new algorithms aim to upgrade the secret language of encryption, making it so complex that not even a quantum computer can crack it. This effort will ensure that our public and private keys, the core of blockchain transactions, remain secure and resilient against any quantum threats, safeguarding the integrity of blockchain technology for the future.

Block Dependency through Hashing

The process of hashing may seem complex at first glance, but it can be understood as a sort of "digital fingerprinting". Born from computer science advancements in the 1950s, hashing is a method that takes any amount of data and returns a unique, fixed-length string of characters. It's like a magical blender: You can put in anything, say an apple or an orange, and out comes a smoothie. Regardless of what you put in, you always get a smoothie of the same size, but the taste and color will be unique to the ingredients. In the context of blockchain, each block is like a page in a ledger book, and the hash is like a unique stamp on each page. Every block contains a record of transactions, its own unique hash, and the hash of the previous block. Think of it as the current block holding hands with the previous block in a long chain, creating a series of interconnected blocks - hence the name "blockchain". Here's where the true beauty of hashes in a blockchain comes in: if someone tries to tamper with a block (say, to alter a transaction), the hash of the block changes - the smoothie's taste and color alter.

Because this changed hash no longer matches the one recorded in the next block, the alteration breaks the chain of hands, signaling a problem. And it doesn't stop there. Because each block's hash is tied to the one that follows, the change would cascade down the entire blockchain, meaning the tamperer would have to alter every single block that follows the one they tampered with, all before the network creates a new block. Given that new blocks are created every few minutes in most blockchains, you can see how this becomes virtually impossible. This unique attribute of blockchain makes tampering with transactions extraordinarily difficult and secures the integrity of the entire system. In essence, the magic of hashing creates an interconnected chain of trust that forms the backbone of blockchain technology.

Computationally Intensive Hashing

Imagine trying to solve a very complex jigsaw puzzle where you need to find the right piece among billions, in a limited amount of time, while competing against others. That's essentially what's happening in a process called Proof-of-Work (PoW), one of the key pillars reinforcing the security of blockchain technology. PoW, an idea first suggested by Cynthia Dwork and Moni Naor in 1993 to thwart cyber attacks, is a puzzle-solving protocol in the world of blockchain. It requires miners-those are the people trying to add new blocks to the blockchain-to solve intricate mathematical problems. This is where the concept of 'difficulty' comes into play. The difficulty of these problems automatically adjusts to ensure that the time it takes to solve them and add a new block stays consistent, regardless of how many miners are participating or how powerful their computers are. Solving these problems doesn't contribute to the transaction data in the block, rather it's like a test. Only by solving the puzzle (finding the right piece) can miners prove they've done the necessary 'work' to add the block to the chain. This requires substantial computational resources and energy, creating a costly entry barrier for anyone who might want to tamper with the blockchain.

However, PoW's high energy consumption led to the development of a less energy-intensive but equally secure method known as Proof-of-Stake (PoS), first introduced with Peercoin in 2012. PoS is a bit like a lottery system, but instead of buying tickets with money, participants 'stake' their own cryptocurrency. The more currency they hold and are willing to stake, the higher their chances of being chosen to validate transactions and create a new block. While this system consumes significantly less energy than PoW, it still maintains the 'cost' of participating, ensuring security. This cost is the risk of losing their stake if they attempt to approve fraudulent transactions. Both PoW and PoS are designed to ensure that altering the blockchain's history is extraordinarily difficult, time-consuming, and expensive. These puzzle-solving and lottery protocols form part of the magic recipe that keeps blockchain technology secure.

Decentralization

When we talk about decentralization, it's helpful to imagine a fishing net. Unlike a single fishing line, a net is made up of numerous interconnected strands. If one or two strands break, the net continues to function because the other strands pick up the slack. This is the core idea behind decentralization - it's a structure that distributes responsibility and function across many points, rather than centralizing it in a single location. Blockchain's decentralization takes inspiration from the very structure of the internet. In a decentralized network, data isn't stored in a single location or controlled by a single entity. Instead, it's distributed across numerous 'nodes' or computers worldwide, each maintaining a complete copy of the entire blockchain. Each of these nodes, from New York to New Delhi, verifies and records transactions, creating a network that operates 24/7. This decentralized structure enhances the security of the blockchain in two key ways. First, it increases the network's resilience. Even if some nodes are compromised, others can continue the network's functions, preserving the blockchain's integrity. It's akin to the fishing net - even if some strands break, the net as a whole continues to work. Second, decentralization makes it extraordinarily hard for any malicious actor to alter the blockchain. To successfully change a transaction, they'd have to control more than half of the nodes on the network simultaneously, a feat which is virtually impossible given the vast and global distribution of nodes. This decentralization principle, the power of many over one, is a key factor in blockchain's robust security. It ensures that the blockchain is not just a chain of blocks, but a globally distributed, resilient, and secure network of trust.

Conclusion

In summary, blockchain security weaves together centuries of cryptographic and computational evolution with cutting-edge advancements in quantum-resistant encryption. Its ingenious combination of encryption, hashing, and decentralization has resulted in a highly secure, transparent, and tamper-resistant system, paving the way for its continued adoption across various sectors.

Gianluca De Novi is a co-founder of Circular Protocol, a faculty at the Harvard Medical School, Harvard Extension School and is Director of the Medical Device and Simulation at the Massachusetts General Brigham. He holds a Ph.D. in Robotics and Control systems from the University of Bologna (Italy) and is an expert in High Performance Computing.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author's alone and do not necessarily reflect or represent the views and opinions of Circular Protocol.

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