4

Blockchain Technology

application of blockchain. Bitcoins use blockchain as the core technology for imple-

mentation. In the blockchain, everything is decentralized; we can also see it as peer-

to-peer connections and transactions stored as blocks [3].

Bitcoins are cryptocurrencies for making electronic payments without involving

banks or real cash by using virtual wallets. These currencies started to be used in

2009. Tracking of bitcoins is transparent, as it is a public ledger and uses blocks to

store each transaction. These blocks are connected as a chain with timestamps of

transactions. These ledgers are permanent, and no one can alter them. Not all cryp-

tocurrencies use blockchain for their operations, but blockchain is ideal for crypto-

currencies [3].

1.3.3  Blockchains Can Never Be Tampered With

Most blockchain mythologies paint blockchain as an unhackable system, which is

the main selling point of this technology. Unlike the traditional methodologies, the

data is not stored in a single server but across the network as packets. Each transac-

tion has also undergone different hash calculations, making it strong and resistant to

tampering. But the fact is that no system is fully proof against hacking. If a group of

nodes is malicious in a blockchain, the miners may rewrite the ledger, altering the

smart contracts written or introducing new smart contracts.

The developers can take some steps to control tampering and make the block-

chain private or permission, in which miner nodes will always be trusted nodes.

Only these nodes should be allowed to perform actions like creating new nodes,

setting up smart contracts, etc. There is no way trustless nodes can tamper with

the state. The suggestion is to use the Proof of Authority (PoA) protocol [4]. This

is a simple protocol to authorize signers to seal blocks or create a block by a voting

technique. One more suggestion is to publish the hash status to an external node

periodically. An auditor or an automaton can verify the previous hash and detect

any tampering on nodes.

It is complicated to compromise the security features of blockchains, so the num-

ber of possible attacks aimed at this technology will be lower than with traditional

systems. Still, we cannot say that blockchains can never be tampered with.

1.3.4  Free Blockchain

The most common myth about blockchain is its accessibility and cheapness of imple-

mentation. Blockchain requires high-end processing and computing power for the

systems. It needs highly compact chips to hold data without compromising security.

Algorithms and hashing techniques require the most powerful systems. These costs

will fall on end-users or customers.

A disadvantage of decentralization and blockchain technology is that it is not free

to use. The services and computing power must be paid for by the users. Users prefer

centralized solutions because they will not be reminded of the cost of an operation

on a regular basis, and the prices will be more hidden [5]. So, never believe that

blockchain is free.