Cryptocurrencies gain momentum. Blockchain Security The biggest security factor on the blockchain is the distributed book, which is decentralized. Thanks to the information distributed among all participants, all of them are on the same level with the blockchain, and thus, all data is transparently visible to everyone. This leads to an almost impossible data manipulation. Therefore, if a participant wants to change the information later, he needs to have a majority over the miners (51% rule) in order to change the calculation of the old block. If this is done, but all the same, all network participants with old available information. And they cannot be changed. More than 50% of miners (= full nodes) must be honest to avoid attacks on full nodes.
An “honest blockchain” will grow faster than fraudulent ones. To modify an earlier block, the attacker will have to repeat the check of all the blocks that followed them in order to overtake an honest blockchain. This computational effort is so great that it is difficult to control or not worth it. High power consumption. Due to the high computing power for checking the blocks and the associated high power consumption, it can flow to the central location of the server (miner) in a decentralized network.
In Bitcoin, the largest miners are already in China today.
If you add the top 5 largest miners, you will be higher than the corresponding 51% share. This is the biggest weakness of blockchain technology.
The accounting book consists of a chain of chronologically stacked blocks containing several transactions. Books are updated by adding new blocks to an existing chain. To avoid improper data storage, a verification and approval process takes place. In this case, the transmitted data (information or transaction) is checked for correctness and admissibility, and a decision is made as to whether they are ranked and in what order.
The prerequisites for the update are confirmation of work and confirmation of the bid or the minimum number of users who confirm the validity of the transaction. They serve as a kind of “automatic intermediary” for reconciling transactions and preventing abuse or duplication. Before participants can complete a transaction, they must authenticate using their own digital signature. In principle, you can set up a network open (public) or closed (private) and distribute any information in it and save it. In a private book, only certain individuals or institutions have the right to access or change data.
The peculiarity is that it allows direct electronic transfer of value without the participation of third parties. This is currently not possible in the existing financial market, since at least one intermediary is needed in payment transactions, and several intermediaries are needed depending on the institutional distance between the sender and the recipient. Compared to payment transactions, the number of intermediaries in securities trading is much larger and more complex. Stock exchanges, CSDs, bidders, clearing houses, banks participate in the settlement of securities in processes and interfaces.
Why do entrepreneurs prefer cryptocurrencies? In the future, smart contracts can make labor-intensive and costly workflows, especially in industry and logistics, more efficient. In real estate, owners, thanks to a safe and unchanging chain of blocks, have great advantages in their long-term rights to prove and apply. Retail – Food Safety. An American IT company wants to use blockchain to solve the global problem of contaminated food, which causes 420,000 deaths every year.
In collaboration with a retail group, he is currently working on a food safety project. Customers need to get security and transparency about products. And in a few seconds. How should this work? Study. A distributed book has great potential for optimizing the supply chain. A block chain can be used to document each segment of a production chain. What was done with the product, who dealt with it, and where it was everywhere. In this way, the customer can follow the entire product path step by step. From which farm did the meat come from, with what temperature was it stored, and was everything correctly stated? These questions should be safely answered in the future.