What Makes Blockchain Different And Secure?- Hitesh Malviya, Bitcoin expert- itsblockchain.com

The distributed ledger technology underlying bitcoin – blockchain technology has a lot more to offer in value and is not just confined to the crypto-currency that it supports. It is due to the security feature that distributed ledger technology or DLT offers that people have diverted their focus on to it and are exploring possibilities beyond crypto currency. It is important to make sure that the initial rules that are being formulated to reap future security benefits do not set us up for security problems later.

Private blockchain finds its use primarily in enterprise markets and offers their operator nodes, managing capability over who can read the ledger of verified transactions, submit transactions, and verify them. The applications for private blockchain make many business transactions possible that might involve multiple users simultaneously who do not necessarily trust each other completely. For example there are tests being conducted for private blockchain systems that support land records, commodities market, and supply chain management.

During the development and evolution of these systems, situations might come up that cause an impact on the security of the system and assets that are being managed by it. When appropriate measures are taken at the early stages of development to create a robust security framework the chances are low of having to create fundamental changes in the product to deal with a possible security flaw in a short time.

The security begins at the architectural level

Designing the architecture of the private blockchain is the key aspect of its set up. It is through communication that blockchains accomplish consensus on their ledger. This communication is crucial for approval of new transactions and writing them on blockchain. The communication is carried out between the nodes, each of which maintains a replica of the ledger and communicates to the opposite nodes the latest information about newly submitted or new verified transactions. It is in the control of the private blockchain operators to provide access to any node. In this communication, a node with higher number of connections has greater advantage as it receives information a lot faster as compared to those with fewer connections. To be considered active, these nodes need to keep up a minimum number of connections. In cases where a particular node restricts transmission of any information or transmits incorrect information, it is the node that is held accountable and may be removed in an effort to keep the integrity of the system intact. The underlying assets on a blockchain can grant more-central positions within the network to established trading partners. This is needed to keep up a connection to at least one of those central nodes as a security measure to ensure it behaves as expected.

The way to treat non-interacting or intermittently active nodes is one more security concern pertaining to the establishment of network architecture. There is always a possibility for the nodes to go offline, but the network needs to be designed in a manner that would enable it to work even without the offline nodes (to get consensus on transactions that have previously been verified and to verify new transactions. In such cases the system should also have the capability to bring the systems back up to speed if and when they do return online.

Transaction Reversibility

Private blockchain operators, especially the ones that handle physical assets must come up with a way to resolve the problem of lost identification credentials. For example even if no one would need to prove the ownership of an oil barrel, but the barrel needs to be housed somewhere. At the moment there is no solution for those who have misplaced their private keys and the stolen bitcoins are impossible to recover. This is o because the transactions submitted with stolen keys are indistinguishable from legitimate transactions for a validating node.

It is the private blockchain owners who have to take decisions like which circumstances warrant the reversal of a verified transaction, especially in case the transaction is proven to be illegitimate. There is a possibility that transaction reversal may undermine the confidence in the immutable nature of the system. On the other hand, a system that allows intensive losses due to exploitation of bugs will result in lost users.

Consensus Protocol

The operators in the private blockchains can choose to allow only certain nodes to actually perform the verification, and it is these trusted ones that hold the responsibility to communicate these verified transactions to the rest of the network. One of the most crucial security decisions made by the blockchain system operator is granting access to those nodes or expanded set of trusted users.

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