Before, people used to think that blockchains cannot be hacked, due to the relatively higher resilience of the nodes in the decentralized system. Because blockchain does not run on a centralized server, so even when some of the nodes in it are being attacked, it will not bring the whole system down.
Yet, there is obviously no such thing as a perfectly secure system. Blockchain enthusiasts understand the “golden rule”, the 51 percent rule. Meaning, in order to compromise a blockchain, you have to take control over at least 51 percent of all its nodes (the computers involved in the peer-to-peer network), which is run under a certain blockchain protocol.
Some hackers have managed to tamper with at least 51 percent of some blockchain’s nodes, thereby hacking the system. The most well-known kind of blockchain attack is called the “double spend” scam. How does it happen?
Early last month, the security team at Coinbase noticed something strange going on in Ethereum Classic, one of the cryptocurrencies people can buy and sell using Coinbase’s popular exchange platform. Its blockchain, the history of all its transactions, was under attack.
The most recent case of blockchain hacking happens on Ethereum Classic, whereby a hacker managed to rewrite transaction history in the blockchain, making it possible for the attacker to spend cryptocurrency without having the amount deducted from the hacker’s account, resulting in big losses (about US$200,000) in part of the accounts who conducted transactions with him.
So, how can we secure blockchain transactions to prevent such breaches from happening? This article will discuss the issue in two parts:
— Why consensus mechanism matters, and
–The three types of consensus mechanisms and how they work contextually.
The importance of consensus mechanism to secure the blockchain
Obviously, coding and protocol setting remain of utmost importance to all IT programming, including also its security aspects, and blockchain is no exception to this rule. This is why lots of blockchain enthusiasts have always emphasized and mentioned consensus mechanisms as an essential part to its security.
In layman’s terms, consensus mechanisms help verify and authenticate all parties and transactions occurring in the blockchain, armed by its record of transactions carried on the blockchain ledger.
The different types of consensus mechanisms
In blockchain, there are three types of consensus mechanisms to safeguard the network: the proof of work (PoW), proof of stake (PoS) and proof of capacity (PoC).
Proof of work identifies the fastest account on the blockchain to solve a mathematical problem which is essential to validate a transaction.
Meanwhile, proof of stake is the blockchain account which controls the majority of funds in his account, which matches the set of rules given by data already present in the blockchain. It is understandable that the account has more at stake in the integrity of the blockchain and more to lose when it gets hacked, thus dedicating more effort toward maintaining the blockchain’s security.
Finally, the proof of capacity allows various participating nodes to share memory space on a harddisk so all of them can maintain and supervise the public ledger collectively, thus helping them remain constantly on guard against possible attacks.
These different consensus mechanics can actually complement and strengthen each other. There are some “fanatics” out there who champion one consensus mechanics over the others, when in fact, they can be applied simultaneously to cater to different security issues which arise with different blockchain transaction types.