Blockchains, in simple terms are database that maintains a list which is continuously growing and maintain a list of records which is called Chain. Each of the blocks or chain contains a timestamp and a link to the previous block. The blocks are so secured that once the blocks are recorded it cannot be modified. These are open-source agreements or licensed from an independent vendor and are de-centralized software ledgers that make transactions visible to multiple parties.
They are robust and secure and can help speed up business with high security. So there is need of centralized systems maintain by companies and organizations. Many companies and organization like Banks, insurers, shippers etc can use them to set up smart contracts/agreement that automatically respond to events, results into time saving communication and e-mail chains. Blockchain are so secured that hackers cannot take access easily by taking over individual computers in a network.
How does BlockChain security work?
The underlying technology or algorithm behind BlockChain technology is a type of mathematics called RSA Cryptography.
In RSA Cryptography, a Secret Key is created to 'sign' the transactions and a Public Key is created to prove that a transaction was 'signed' by the Secret Key. For example if person X have to pay some amount to person Y then person X will create a transaction for transferring the money form his account to person Y account and will 'sign' it. There will not be a case of any dispute since person X has signed it using his secure key. Any other person can easily identify the transaction by checking the transaction signature against his Public Key, Thus, making it secure transaction.
A third person or hacker cannot create the transaction or access it without permission; if they intended to do so then they would need the Secret Key. A Hacker need not to access your private residence or place of work to access the key what max can be done is, guessing it! The BlockChain is stored on computer.
Even though the system is so secured and robust but still there are many threats like.
It is a new type of computer chip which are more powerful and can able to process records much more faster that today’s super computers. BlockChain is secured by some algorithm that assumes that the today’s generation computer will not be able to process the data fast enough which can hack or break the logic behind storing the identity of each block, Therefore, if quantum computing becomes reality, there is a possibility that the system will become powerful enough to process the algorithm which can reveal the identity system of each blocks in BlockChain.
High Speed of Quantum Computing
The current computer processing is handles data using the digital wave, which understand data using signals, either On or Off’ (1-0-1) to store and process data. Whereas Quantum computing uses parts of an atom to store multiple states of signals (on, off and a superposition of both). This is significantly more 'faster' than current computers.
Just to indicate the improvement in speed, there is an exponential link between the size of a printed circuit and its enhancement. Today’s smallest Intel chips on the market are around 15nm. An atom is 0.1nm with its quantum components being tiny fractions of that.
Today, quantum computing is not a practical reality. There are inherent problems with quantum computers, particularly around the stability of data storage in the quantum realm although companies such as Google are working on error-correction systems on these, but, some think it's just a matter of time.
Blockchain has given regulatory something to think about. Regulators are still working out to finalize their approach towards IoT data and payment transfers. Just for example
1. How to go with cross-border payments or transfer.
2. How does the taxation will apply?
3. Who will be responsible for any fraud?
4. How to legalize this kind of transaction etc.
There is still no clarity on this and regulators have to spend a lot of time in regulating these things.
At the moment the speed of this kind of BlockChain or bitcoin transaction is limited 6-7 transaction per second (as per a study), but as we move on, the number of users and the number of transactions will going to increase exponentially. In the Era of superfast network the amount of transaction should not be limited to countable numbers every seconds or minutes. One more risk will be of the security, as more the number of transaction there are more chances of the security risk. The security concern will be major issue as we increase the throughput in BlockChain.
Adoption By Mass
Even though the BlockChain are getting popularity day by day, but still there are many people who are not aware of this, we have to see that how the people are going to adopt this in their day to day life and what will be the response, till then I think this will remain a potential risk for Blockchain.
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Anil Kumar Pandey