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What algorithm is adopted to protect the security of Blockchain?

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What algorithm is adopted to protect the security of Blockchain

If you have been following cryptocurrency over the last decade, you must have heard the word “Blockchain”,  the record-keeping methodology behind the Bitcoin network. Blockchain technology is basically a distributed database that keeps a continuous rising list of protected records from external emendation. Approximately 5% of the world population use this technology. But, is blockchain completely secure? Well, this can be estimated by evaluating the workings of a blockchain platform. This article will look into essential aspects of blockchain that make it an efficient and safe platform for digital transactions. 

Table of contents 

  • How does a blockchain network work?
  • Algorithm to protect blockchain security:
  • Private and public key
  • Hashing
  • Peer-to-peer network
  • Zero-knowledge proof
  • Closing thought

How does a blockchain network work?

The blockchain network dwells across a system of nodes. When new transactions happen, the blockchain is ascertained across this distributed system before these new transactions can be incorporated as the following blocks on the chain. Hence, the alliance of nodes is needed to put that block into the blockchain. Each block keeps collections of unique transactions and the outcomes of any blockchain executables.  The blockchain platform is trustable because an exact copy of the series, showing every transaction, is attached to the entire network. If somebody tries to cheat the system, they can be identified easily. 

However, sometimes a few things can go wrong in other areas of a blockchain-based application resulting in loss and compromise. For instance, weak access controls, inadequate communication security, certificate management protections, and loose key. For this reason, blockchain uses several algorithms to increase security and provide each user with a safe environment for carrying out transactions.

Algorithms used to protect the blockchain security:

  • Private and public keys

Blockchain technology makes use of asymmetric cryptography for securing transactions among users. In such networks, each user acquires a private and public key. These keys are created with random strings of numbers that are cryptographically linked. No user can surmise another user’s private key by looking at their public key. All users have an address that is emanated from the public key by utilizing a hash function. These addresses are used for sending and receiving investments on the blockchain, I.e. cryptocurrency. Users can view previous transactions and activities on the blockchain as blockchain networks are shared with all parties.

Users’ identities are kept hidden; Senders and receivers of prior transactions are embodied and implied by their addresses; 

This strategy prevents  a malevolent user from observing a specific address’s past transactions  to disclose information.

Private keys protect users’ identities and keep them secure through digital signatures. Private keys let users access personal wallets and funds on the blockchain; this adds a layer of identity authentication. Whenever individuals send money to other users, they should submit a digital signature produced and provided with the private key. This procedure prevents the theft of funds.

Before building transactions into blocks, blockchains hash every transaction. Hash pointers tie each block to its forebear by carrying a hash of the data in the previous block. Hence, a change made in any transaction will generate a completely different hash, which will then modify the hashes of all successive blocks. To produce a modification across the blockchain, around 51% of the system would have to agree to it. This process is termed a “51% attack.”

However, different blockchains employ different cryptography algorithms. The Bitcoin blockchain utilizes the SHA256 algorithm, which generates a 32-byte hash. Litecoin and Dogecoin both use Scrypt. It is one of the lighter and faster cryptography algorithms.

  • Peer-to-peer network    

In big corporations, an enormous amount of users’ personal data is stocked on solitary devices, which increases the risk of losing data if the system got hacked, mishandled, or lost. Blockchain intends to eliminate this dependence on a central authority. To accomplish this, blockchain works in a way where nodes in a blockchain system can affirm the legitimacy of a transaction instead of a third party.

Transactions between clients like sending and accepting digital money are conveyed to each node in the network. Nodes ensure credibility of transaction, before it gets documented as a block on the blockchain and check past transactions of the sender to make sure he/she didn’t double-spend or spend a more extensive amount of funds than they acquire.

Later on, agreement protocols like verification of work and confirmation of stake are sent by miners. These protocols permit nodes to arrive at an agreement state on the order and sum of transactions. When a transaction gets checked, it is distributed as a block on the blockchain. Users’ protection is expanded through the decentralized nature of blockchain, and no need for a central authority.

  • Zero-knowledge proofs

Zero-knowledge proof is a Consensual decision-making process in which one party confirms to another party that data is credible. In this process, the “prover” does not disclose any data about the transaction. This can be achieved through detailed cryptographic techniques. This maintains the decentralized nature of blockchain while reducing transparency; zero-knowledge proofs reflect nothing regarding a transaction except its validity.

Closing Thought

Through the combined use of different algorithms, blockchains are able to fulfil high degrees of security as a distributed system. However, these fields of knowledge must be appropriately assigned. By understanding the algorithm, a user can become a blockchain expert. A careful symmetry between security and decentralization is essential for building a dependable and effective cryptocurrency network. 

To learn more about Blockchain technology and become a Blockchain expert, check out various courses as well as certifications available with Blockchain Council.

What algorithm is adopted to protect the security of Blockchain?

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A detailed history of blockchain: From the Establishment to Broad Adoption

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A detailed history of blockchain From the Establishment to Broad Adoption

Blockchain has gotten an ample amount of appreciation in the most recent couple of years, with the potential to come across as an extraordinary power to transform businesses. Blockchain technology is a computerized record of an action that is copied and conveyed across the whole organization of the blockchain platform through computer networks. Sounds confusing, isn’t it? Truth to be told, Blockchain is much easier to understand than the above description.

For understanding the concept, it is feasible to look back at its historical background and learn about its origin to significant turns of events and innovations. Bits of knowledge into the background of Blockchain will assist us with addressing these queries like the exact meaning of the term,  working environment, problems it can solve, and where it can be implemented. All these insights will help us to place the right expectations for its future.

Table of content

  • What exactly is Blockchain?
  • When did the Blockchain first appear?
  • Who is behind blockchain technology?
  • How is Blockchain created?
  • Identifying a suitable Use-case
  • Selection of Suitable Consensus protocol
  • selection of a suitable platform
  • Node designing
  • Designing the Blockchain parameter configuration
  • APIs
  • Building admin and user Interfaces
  • Adding smart technology
  • Closing Thoughts.

What exactly is Blockchain?

A blockchain is a disseminated network that comprises computer systems associated with the Internet, which all together keep the account of transactions. In the Blockchain, one record is dispersed and protected across the system. Each computer in the group approves the exchanges. However, nobody has power over the network, not like various clients functioning in a centralized network. 

A blockchain incorporates a sequence of blocks, which are information units used to store value-based data of the organization. To add a block into a blockchain, these steps ought to occur:

  • When an exchange is performed, then it should be confirmed by a group of computer networks. The exchange should be compiled in a block; after getting approval from the network group. The digital signature of the sender and the receiver and the dollar’s value has to be stored in a block. 
  • A block should be given a hash to separate it from different blocks. This block additionally contains data of the hash of the newest added block into a blockchain. When hashed, this block can be put into the Blockchain.
  • After the inclusion of a new block in the Blockchain, the complete information of this exchange will be public, and any user in the network can explore this exchange data, for example, who sent it? Who received it? Who added this exchange to the block? When did the exchange occur? And so on. The information is apparent and auditable yet not editable.

A block is only digital data. A “chain” is characterized as a common information base. In this way, when we say Blockchain – we intend to discuss the digital data which is kept in a public data set.

When did Blockchain first appear? 

The very first appearance of Blockchain was seen in 2008. It was introduced by an individual named ‘Satoshi Nakamoto.’ Nakamoto improved the blockchain structure effectively, utilizing a Hashcash-like strategy to keep records of time and date of added blocks without expecting them to be endorsed by a central party and embedding boundaries to balance out the rate at which blocks were to be added to the chain. Next year, this blockchain structure was recognized as a central part of the cryptocurrency bitcoin, where it acts as the public record for all exchanges carried on the network. 

In August of 2014, the size of stored records of all exchanges that have happened on the bitcoin blockchain network filled up to 20 GB. In January 2015, the size had reached nearly 30 GB. This size expanded from 50 GB to 100 GB between January 2016 to 2017. While reaching halfway to 2020, this record size exceeded 200 GiB.

Who is behind Blockchain technology?

It is essential to learn about the historical background of Blockchain for Blockchain supporters and Blockchain prospects. Thus, to help readers to comprehend the Blockchain advancement, let us learn the  history of this technology:

1991-2008: Creation Period of  Blockchain Technology

Blockchain emerged in 1991  when W. Scott Stornetta and Stuart Haber deliberated what the world has come to know as a “Blockchain.” Their early work included shaping a cryptographically secured blockchain where nobody could alter timestamps of records. 

In 1992, they updated their technique to consolidate Merkle trees that improved proficiency hence providing the assortment of more reports on a solitary block. Nonetheless, in 2008, the term “Blockchain” began to acquire importance when Satoshi Nakamoto ingrained his idea of Blockchain in the blockchain space. 

Satoshi Nakamoto is credited as the master of blockchain innovation. There is not much knowledge about Nakamoto as individuals speculate he could be a single person or a group that molded Bitcoin, the primary application of digital roster technology.

How is a Blockchain created?

Here are steps that are needed to create a blockchain:

Step 1: Identifying a suitable Use-case

There are three use-cases where blockchains do very well:

  • Data Authentication and Verification: It focuses on encryption, inflexible storage and digital signatures, creation of private and public keys, and verifying digital signatures.  
  • Smart Asset Management: This focuses on disbursement, revenue, trade, bond, and retirement. In crypto, real-world properties are represented in the form of a token, for example, land, infrastructure, gold, silver, oil.
  • Smart Contracts: This focuses on trade between dealer and buyer with smart contracts.

Step 2: Selection of Suitable Consensus Protocol

Depending on your requirements, you need to choose the right consensus protocol among:

  • Deposit based consensus
  • Proof of stake
  • Delegated Proof of Stake.
  • Derived PBFT
  • Byzantine fault-tolerant
  •  Federated Byzantine Agreement
  • Redundant Byzantine Fault Tolerance
  • Federated consensus
  • Proof of Elapsed Time
  • Simplified Byzantine Fault Tolerance
  •  Round Robin

Step 3: Selection of a Blockchain Platform

This depends on your choice of consensus protocol. Many of them are cost-free and open source. Here are some examples:

Ethereum, Hyperledger Fabric, Quorum,
HydraChain, Stellar, Hyperledger Iroha,
Open chain, Hyperledger Sawtooth Lake, and many more.

Step 4: Node designing

Blockchain systems can be designed as private/public,  permission-less as well as with permission, or even hybrid. 

Another important factor to be considered at this step is whether the nodes are running on-premise or in the cloud. Also, the selection of operating systems and tasks related to hardware configuration such as processors, and memory and disk size is to be done in this step. 

Step 5: Designing the Blockchain Parameter Configuration

Usually, blockchain platforms require a thoroughly plotted configuration for elements like permissions, atomic trades, key management, asset issuance, multiple signatures, address formats, hand-shaking, etc.

Step 6: APIs

Most platforms offer pre-built APIs, while others don’t. The issues that you’ll need APIs for are: 

  • For developing keys and addresses.
  • Conducting auditable processes.
  • Performing data verification by using hash and digital signatures.
  • For holding data and its recovery.
  • Managing smart-asset, I.e., distribution, bond, donations, business, etc.
  • Creating smart contracts.

Step 7: Building admin and user Interfaces

At this step, you’ll select the programming languages. You’ll also have to pick external databases and servers.

Step 8: Adding smart technology 

Boost the potential of your Blockchain solution with the addition of Artificial Intelligence (AI), cloud, data analytics, biometrics, machine learning, and bots.

Closing Thoughts

The Blockchain provides amazing advancements in security, decentralization, transparency, and unchangeable data. These qualities make it a perfect tool for future applications. 

It has marked its territory in many industries, and many more yet have to embed it.

Learn more about blockchain technology and take up a suitable blockchain course at Blockchain Council.

A detailed history of blockchain: From the Establishment to Broad Adoption

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How Can Blockchain Reduce Cyber Risks?

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How Can Blockchain Reduce Cyber Risks

If you are new to the concept of Blockchain and wondering what roles it plays in reducing and preventing cyber risks, this article has got you covered. Let’s delve deeper and get started.

Table of Contents 

  • Overview 
  • Role of Blockchain in Combating Cyber Risks
  • Concluding Lines 

Overview 

As technology is progressing, the vulnerability risks associated with cybersecurity are catching up at a rapid rate. Considering the complexity and risk associated, there is an urgent need to protect the entire system.

Today, cyber-attacks have become more complicated due to advanced ransomware and the increasing threat of professional cyber organizations. Blockchain is gaining momentum these days as a result of the rising incidence of cyberattacks. Blockchain describes itself as a peer-to-peer(P2P), decentralized distributed ledger that operates without involving any central authority. Due to its decentralized, immutable, and transparent nature, Blockchains can help in improving cyber defence and preventing fraudulent activities from taking place.

Want to gain an in-depth understanding of Blockchain and become a Certified Blockchain Expert? We are here to assist you.

Role of Blockchain in Combating Cyber Risks

Let’s delve deep and explore the role of Blockchain technology in reducing and preventing cyber risks.

Authentication and Authorization control

Restricting only authorized parties to access the appropriate task is one of the common concerns for organizations. In public Blockchain, there is no need to control network access as everyone has the right to participate and access the entire network. But private Blockchains require appropriate security controls to protect network access from unauthorized users. But as the technology is advancing, it is incorporating authentication and authorization controls to provide authentication, authorization, and encryption to adequately guard data access. 

But what if by chance an attacker or any third-party gains access then? In that case, he will not be able to read or retrieve any information stored on the Blockchain network. Thus technology helps maintain confidentiality by utilizing cryptographic algorithms, which are hard to break. 

Use-Case in Threat Intelligence 

Threat intelligence is a high-level process that involves gathering valuable insights about an emerging or existing cyberthreat. But the major issue related to threat intelligence is that companies spend a lot of time researching the same threats, while others are left unnoticed. Blockchain, with its decentralization, peer-to-peer oriented architecture, can help in maintaining synchronization between different parties, thus transforming the threat intelligence process. 

Moreover, Blockchain’s decentralized infrastructure also acts as an anti-tampering infrastructure that helps detect everything in real-time. Even if an attacker tries to delete every proof of his presence by deleting every log which can link him with an incident, Blockchain’s immutable design does not let it happen.

Data Consistency and Integrity

Maintaining data consistency and ensuring Integrity is crucial for all organizations and enterprises. Blockchain’s ability to offer immutability and transparency ensures data integrity. Technology makes use of sequential hashing and cryptography, and this combination makes data tempering almost impossible. The technology ensures that all transactional records are digitally signed and timestamped, meaning organizations can trace back each transaction and identify the corresponding party whenever required. In the Blockchain, non-repudiation is ensured, meaning no one can deny the transaction and behavior in the transaction, which further ensures the reliability of the system.

Ensures Accuracy and Quality of the Information 

Blockchain helps prevent cyberattacks, but it also helps in ensuring accuracy and maintaining the quality of information. While it can not guarantee or enhance data quality, it is responsible for the information’s accuracy and durability after it has been entered into the Blockchain. As long as the data input is reliable, Blockchain technology can act as a powerful tool for transforming data output, as the technologies’ near real-time capabilities allow companies to validate transactional data quicker and take more constructive measures.

Ensuring Timely and Reliable Access

Availability is another use-case where Blockchain could be put to use. DDoS, being one of the most common types of attacks, can cause the most disruption to internet services, and Blockchain can provide a viable solution in dealing with this. Although technology has already suffered from a DDOS attack in the past, this is something that is not frequent.

DDoS attacks on blockchains are not regular. This is because they are costly as they strive to defeat the network with large volumes of small transactions.

Concluding Lines 

As we have read, it is clear that Blockchain is much more than just cryptocurrencies. It has the potential to be applied to multiple industries as a trusted infrastructure. As far as you will dig Blockchain, you will realize its capabilities and possibilities, ranging from a vast spectrum of functionalities and covering various use cases. The true potential will be realized in the subsequent years that will decide where Blockchain will stand?

If you want to gain a complete understanding of Blockchain’s inherent security features and associated risk and knowledge of best security practices for Blockchain infrastructure, you can enroll in Blockchain Council and become a Certified Blockchain Security Professional.

To get instant updates about Blockchain Technology and to learn more about online Blockchain Certifications, check out Blockchain Council. 

How Can Blockchain Reduce Cyber Risks?

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Bank of America Considers Decentralized Finance as a Radical Change to Mainstream Capital Markets

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Bank of America Considers Decentralized Finance as a Radical Change to Mainstream Capital Markets
According to the latest announcement, Bank of America considers decentralized finance (DeFi) potentially more disruptive than Bitcoin. 

Although Bitcoin is the most popular cryptocurrency, Bank of America believes that Ethereum Blockchain is more prominent and has more advanced features, such as flexibility in its hosting of DeFi, than the first-ever cryptocurrency, Bitcoin. 

DeFi refers to the shift from centralized financial systems to peer-to-peer (P2P) finance that does not rely on third-party intermediaries; instead, it utilizes smart contracts on blockchains, Ethereum being the most common one.

The bank perceives DeFi space as a radical change to mainstream capital markets but believes that it has to go a long way in comparison to mainstream finance.

Bank Sees DeFi Potentially More Disruptive Compared to Bitcoin

In its recent report, “Bitcoin’s Dirty Little Secrets,” Bank of America expressed its views regarding the most popular cryptocurrency till data, Bitcoin, mentioning that the only good reason to invest and own BTC is when you see its prices going up.

The bank also calls central bank digital currencies “kryptonite for crypto,” but it is influenced by decentralized banking, which it describes as “potentially more destructive than Bitcoin.”

Despite Bitcoin’s hitting $57,788.29 at present, Bank of America considers decentralized finance more disruptive. 

According to Bank of America, “DeFi has witnessed a lot of innovation among exchanges. Bank of America further explains that the important factor here is that many of the roles that are distinct in fiat trading are done on-chain by utilizing distributed ledger technology. It also mentioned DeFi services, from derivatives to asset management, as measures of growth.

Bank believes that when it comes to scalability, Ethereum outperforms compared to Bitcoin. The report also highlighted some of the issues associated with Ethereum, such as speed, block size, the price of ether, and so on.

As the price of Bitcoin and Ether has reached new highs, the total value locked in decentralized finance has soared as well. Apart from BTC and ETH, numerous tokens have reached new all-time highs, taking DeFi total market capitalization to new heights.

To get instant updates about Blockchain Technology and to learn more about online Blockchain Certifications, check out Blockchain Council. 

Bank of America Considers Decentralized Finance as a Radical Change to Mainstream Capital Markets

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Soon Anchor Will Launch Bank-Beating DeFi Savings Account

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Soon Anchor Will Launch Bank-Beating DeFi Savings Account

According to the latest announcement, Anchor, a two-token, algorithmic stablecoin, appears to be finally launching bank-beating DeFi savings accounts. 

Stablecoin that is appearing to be certainly nearing a go-live date, was initially slated for the month of October launch, but the team failed and postponed that launch to November.

According to the proposal announced in late July 2020, Anchor stablecoin will enable users to keep Terraform’s UST stablecoin, which is pegged to the US dollar, and receive returns that regularly outpace the annual percentage yield (APY) of savings accounts at US banks. 

Anchor’s official website explains itself as a two-pegged stablecoin that offers users long-term price stability and security from inflation while hedging against market volatility. It is much-anticipated crypto savings account from the team at Terraform Labs. 

The Terra money market, a Web Assembly smart contract on the Terra Blockchain that enables deposits and borrowing services of Terra stablecoins, is known to be its key component. 

This two-token, algorithmic stablecoin represents a new decentralized finance (DeFi) application, and basic savings account that should be more than competing with traditional banks.

Anchor’s Growing Ecosystem

There has been a flourishing ecosystem of products and services built on top of this stablecoin, presently, including stability fees on exchanges and Anchor wallet. Apart from this, its official website mentions some of the other applications that are currently in development, and these are Anchor Pay and ANCT as a global currency. 

Initially, in 2019, there were conversations about integrating wrapped Terra stablecoins with a range of popular DeFi primitives and centralized exchanges, and since then, the token has spread from its native Blockchain to Ethereum and Solana as well.

It’s a Terra Blockchain-based savings protocol that provides principal-protected savings products with instant withdrawals and a steady interest rate. According to statistics, TerraUSD (UST) has a market cap of around $1 billion, addressing it as the fifth-largest stablecoin. 

To get instant updates about Blockchain Technology and to learn more about online blockchain certifications, check out Blockchain Council.

Soon Anchor Will Launch Bank-Beating DeFi Savings Account

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Decentralized Finance Lending Protocol’ Compound’ to Offer Cross-Chain Borrowing Via Gateway

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Decentralized Finance Lending Protocol' Compound' to Offer Cross-Chain Borrowing Via Gateway

According to the latest announcement, the well-known decentralized finance lending protocol ‘Compound’ will offer cross-chain borrowing through a protocol named Gateway.  

The report describes the new Gateway chain as a cross-chain interest rate market that allows users to borrow assets native to one chain with collateral from another chain. 

Initially, in December, Compound Finance originally announced the platform naming it as ‘Compound Chain,’ a distributed ledger capable of transferring value & liquidity between peer ledgers.

Compound Introduces Next-Gen Blockchain Architecture 

DeFi space is gaining a lot of public attention over the past year. This is because DeFi products and platforms offer a wide range of financial vehicles and marketplaces that ensure that an individual is the sole custodian of their assets. But there still exists fragmentation in the DeFi industry. 

Thus, in order to alleviate current fragmentation, the protocol has chosen advanced Blockchain architecture, ‘Substrate,’ that is administered by COMP token-holders on Ethereum and is fully upgradeable without any downtime. It is a modular framework that enables developers to create purpose-built high-throughput blockchains.

Compound founder Robert Leshner explained why he has chosen this particular platform. According to him, he has chosen Substrate so that his team could focus on building application code instead of inventing consensus mechanisms.

He further added that it is a modern framework built on a modern language, named ‘Rust.’

As Compound has decided to alleviate current fragmentation in the DeFi industry with Gateway, to complement Gateway, it plans to build ‘Starports’ which would function as on and off-ramps, to the new blockchain for users to borrow or deposit an asset as collateral. 

The report also mentions that Gateway will also have a native unit of value called CASH which will standardized value across various disparate assets and is used to handle transaction fees. 

Talking about Compound, according to Compound’s official website, “It is an algorithmic, autonomous interest rate protocol built for developers, to unlock a universe of open financial applications.”

In other words, it is a decentralized protocol for the frictionless borrowing of Ethereum tokens. It enables suitable money markets to function and offers a safe and positive approach to store digital assets without the flaws of existing approaches.

To get instant updates about Blockchain Technology and to learn more about online Blockchain Certifications, check out Blockchain Council. 

Decentralized Finance Lending Protocol’ Compound’ to Offer Cross-Chain Borrowing Via Gateway

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