Use of Blockchain Security for the Safety of Transaction Data: How Does it Work?

blockchain security

Today blockchain is everywhere. It has two main components: a decentralized network enabling and verifying transactions and the immutable ledger that the network up keeps. Each one in the network can see the shared transaction ledger, but there would be no single point of disaster. Hence, nobody can hack or corrupt records or digital assets. It is this decentralized trust that makes blockchain security worth using for the safety of your transaction data.

And if you think that blockchain is limited to bitcoin, then you are wrong. Blockchain is the robust data structure that permits Bitcoin, and other emerging cryptocurrencies, to thrive. It does so via a mixture of anonymity, decentralized encryption, immutability, and global scale. Moreover, on the blockchain, the procedure of transaction verification and recording gets immediate and permanent. The ledger gets distributed across numerous nodes, which means the data is replicated and gathered instantaneously on each node throughout the system.

When you record a transaction in the blockchain, specifications like an asset, price, and ownership are recorded, verified and established within seconds across all nodes. Any confirmed change registered on any single ledger is even simultaneously available on all other replicas of the ledger. Since every transaction is transparently and permanently saved across all ledgers, open for anybody to see, you do not need third-party verification.

Cryptography in blockchain safety Explained

Cryptography is the concept of forming protocols that avert third parties from seeing private data. Advanced cryptography integrates the disciplines of computer science, math, physics, engineering, and more like:

  • Encryption – Encoding text into an incomprehensible format
  • Decryption – Reserving the encryption – changing a muddled message into its original form
  • Cipher/SHA 256 – a robust algorithm used for performing encryption or decryption precise steps to be followed.

The point is blockchain Technology employs cryptography in manifold diverse ways. Some of these are like for secure transaction, security wallets as well as privacy-preserving protocols.

Public Key Cryptography in Simple Words

Mainly one uses public-key cryptography for encrypting messages between two individuals or two computers securely. You can use someone else’s public key to encrypt a text or message. However, once encrypted, the only way to decrypt that message is through the corresponding private key. It is the main ingredient of blockchain technology. You can take it as the characteristic technology for transactions and wallets. Once being a user create a wallet on a blockchain, you are generating a public-private key pair.

Private key Cryptography  

A private key is a particular type of cryptography that enables a user to access their cryptocurrency. It is private blockchain wherein the key is secret. Furthermore, a private key is an essential aspect of bitcoin and alt coins. Hence, the security makeup helps to protect a user from robbery and unauthorized access to transaction data or funds. Moreover, private keys may take a couple of different forms, generally shown as a series of alphanumeric characters. It all makes it challenging for an attacker or hacker to crack.

Cryptographic Hashing

Many companies use cryptographic hashing for their secure transaction. It is another critical piece of blockchain technology and is directly accountable for generating immutability, one of the blockchains’ most crucial features. However, remember that people mainly use hash functions for authentication, but businesses are using it for other purposes too, like:

  • To ensure data integrity,
  • Protection against unauthorized modifications,
  • Guard stored passwords, and

Usage of Secure QR Codes

You all have heard about QR codes. But a secure QR code is blockchain-based. Now, if you have a blockchain-based QR code on your transaction data, you can be sure that there is a unique hash value to it. The hash value on the QR code is associated with another hash value recorded on the blockchain network. Once anyone tries to access the transaction data by scanning the QR code through a QR reader, the system matches the hash value in the QR code with the hash value in the blockchain network. Hence, if it does not match, it turns out to be invalid. In other words, just like biometric and DNA security, blockchain-based QR codes are permanent and future proof.

The bottom line

Blockchain technology is still in an initial stage, and cryptocurrencies are just its first primary use case. Beyond cryptocurrency, blockchain technology is slowly changing how you transact and how you record and confirm transactions. Whether Private or public blockchain, it is here to stay. Soon you will see blockchain as an essential part of all industries for transaction data and overall security. Talk to us at Proofeasy, if you want to get started with blockchain. We will be happy to assist you in the right direction.