Since the launch of Bitcoin in 2009, blockchain technology has been resilient in keeping the cryptocurrency safe.
People often ask if Bitcoin is a safe investment, not because of legendary market volatility, but because they are concerned about the safety of the digital asset. Bitcoin is one of the most popular cryptocurrencies in the world and has been around since 2009. Since then, in more than a decade, the network has proven to be very resilient and powerful at protecting vital information. Over the past few years, the blockchain technology that Bitcoin runs on has become more prevalent as the cryptocurrency takes center stage in many markets. The Blockchain technology that powers the virtual currency is known for its unmatched security and one of the main reasons for its rapid adoption, with Bitcoin being one of the technology’s top success stories.
What is blockchain technology and how does it work?
Blockchain is associated with cryptocurrencies like Bitcoin, Ethereum and others, as a platform for digital money transactions. It is a database of all cryptocurrency transactions worldwide, but this technology has also been used to collect other types of data like medical records, humanitarian aid data and more. Blockchain technology is like a digital ledger and is open to the public. It provides a secure way to conduct and record transactions. All transactions made with cryptocurrencies are recorded and stored as data in blocks. All of this information is time stamped. .
Is blockchain technology safe?
The easiest way to understand blockchain technology is to memorize it as a series of blocks that store data. Each of the blocks has a unique hash number and a link that connects it to the previous block. Each block is an important part of the sequence and it cannot be changed, if there is a change the hash sum would be changed and the block would no longer be valid. This invariance is the foundation of blockchain security along with three other aspects that we will see below:
Cryptography
All blockchain transactions are protected by cryptography. Each block essentially contains a unique and private key that can be verified with a public key. If the data of the transaction changes, the block’s unique key becomes invalid. As a result, the block is discarded from the chain.
Decentralisation
Blockchain technology is secure because it is decentralized and distributed. There is no single point of failure, which makes corruption much more difficult. Hacking into one part of the system cannot affect other parts. In the case of a private blockchain, however, this benefit is partially lost as they have a single control point and a limited number of nodes that prevent users from making changes to the ledger. Organizations operate this type of blockchain for their internal use as it allows the company to control its own processes. .
Consensus
All blockchain technologies work according to a consensus model that checks whether a transaction has taken place and legitimizes it. Most consensus models run on protocols that include proof of work, proof of engagement, proof of authority, and so on.
What makes the Bitcoin blockchain safe?
The cryptographic system makes transactions irreversible, i.e. Once a block has been created in the chain, it cannot be changed, but information can be added to prevent people from undoing a transaction that has already been made. The Bitcoin blockchain is public. While the words transparency and publicity don’t sound safe, they do in the case of Bitcoin. Despite the anonymity of the user, all transactions on the network are publicly available, which makes it difficult to hack or defraud the system. It’s decentralized. The Bitcoin network is distributed and has thousands of nodes around the world that keep track of all transactions in the system to ensure that if something goes wrong on one server, others have to take over. Hacking a server is pointless. That’s not to say it’s foolproof or impossible to hack, but it certainly isn’t easy either – with Bitcoin and other cryptocurrencies, you’re more likely to suffer losses from a bad investment or be tempted to give up your coins, than they’ll get hacked away from you.
