How to protect data on the blockchain?

by in Blockchain 101, Blockchain For Beginners

Blockchain

Blockchain is advertised as one of the most secure technologies, which uses a high degree of data encryption, which almost completely protects them from unauthorized and fraudulent changes. Despite this, security threats exist. They can be avoided by adhering to the principles below.

1. Storage of cryptographic data checksums

Instead of storing the original content directly on the blockchain, ideally, you should follow the principle of data mirroring, when there is only a cryptographic checksum (or mirror image) on the network. In this case, the hash value of the original data corresponds to this mirrored data.

2. Safe storage of cryptographic keys

Access to the blockchain is regulated using private cryptographic keys. Of course, they should be kept in a safe place and not be seen by fraudsters or just strangers. Storing them in plain text files or using them unencrypted on devices is a security risk because attackers can gain access to keys through spyware. Don't do this if your data is dear to you.

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3. Protection settings against hacking the blockchain using brute force and attacks 51%

The decentralization of the blockchain, which is constantly talked about, raises doubts: for example, a small number of large miners control most of the blockchain networks of Bitcoin and Ethereum, the most famous cryptocurrencies. If the consortia of miners somehow get enough processing power, they can take control of the network with brute force and change the data stored in it. Although an unambiguously reliable system of protection against such threats has not yet been developed, there are 51% of ways to prevent attacks. This is the transition from the more vulnerable Proof-of-Work consensus algorithm to Proof-of-Stake, increasing the number of required confirmations, and other methods.

4. Checking the quality of the blockchain \ -net code

The blockchain code requires expert oversight, and the scalability of the network is also worth checking before trusting it with any information. Low-quality code creates threats that can be easily avoided if tested on time.

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5. Verification of supplier credentials

As more and more third-party solutions become available for storing funds in smart contracts and wallets, the risk of losses due to errors of such providers increases. Check the reputation of projects before using their blockchain solutions.

6. Checking web-certification

Last but not least, blockchain transactions will become significantly more secure if you always verify that the security certification and HTTPS protocol extension are correct in the address bar. This is a very useful habit.