Enhancing Blockchain Security: Advanced Cryptographic Techniques

Blockchain technology has risen in fame and popularity in recent years due to its vital use cases for industries and businesses. Originally associated with Bitcoin, Blockchain has evolved over the past decade to encompass many applications beyond digital currency. Although the rise of Blockchain is not without its issues, in the past year, more Blockchain security breach incidents were reported than ever, resulting in losses exceeding $4 billion.

These incidents included familiar attacks like phishing and network attacks and new threats specific to Blockchain infrastructure, such as cryptojacking, rug pulls, and 51% attacks. This year, however, is different due to practices adopted by businesses and industries, and the attacks have dropped by over 70%. Let’s look at some of the best tips and tricks that can help maintain Blockchain security in businesses and industries.

Fundamentals of Blockchain Security

Blockchain and its work is easy to understand, but Blockchain security is a different sphere. Each transaction is encrypted and linked to the previous one, forming a chain of blocks. Blockchain security includes different techniques to ensure protection from unauthorized access, hacks, and attacks. Blockchain security relies on several key components, such as:

Cryptography

This uses mathematical techniques to encrypt data, ensuring its confidentiality, integrity, and authenticity. Different techniques to encrypt and decrypt data are used; we will discuss some later in this blog.

Consensus

The agreement among the nodes on the validity and order of transactions, preventing double-spending and malicious attacks. Different consensus mechanisms like proof of work and proof of stake are popular among Blockchains.

Decentralization

The distribution of power and control among many nodes reduces the risk of single points of failure or corruption. Blockchain has taken decentralization to the next level by distributing the work among thousands of worldwide nodes.

Smart contracts

The self-executing programs that define and enforce the rules and logic of transactions eliminate the need for intermediaries or trusted third parties. Once deployed, these contracts cannot be changed, and the transactions will follow the terms mentioned while deploying them.

However, Blockchain security could be more flawless. There have been several cases of Blockchain security breaches. There was a crypto attack in 2016 where an attacker exploited an issue in one of the smart contracts of The DAO, a decentralized autonomous organization, and stole about $50 million worth of ether, the crypto utilized by Ethereum. In.

One of the biggest Bitcoin heists in history happened in 2014, when hackers broke into Mt. Gox, a leading cryptocurrency exchange, and stole about 850,000 bitcoins. The stolen coins were worth a staggering $450 million at the time. In another instance in 2017, a user accidentally triggered a bug in a smart contract of Parity, a popular Ethereum wallet, and locked up about $280 million worth of ether.

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