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Blockchain
TechnologyDAVID MARCHENKO
Distributed Ledgers
Essentially a database that is
consensually spread and verified across
network with various points
Allows transactions to have public
‘witnesses’, which makes cyberattacks
more difficult
Distributed ledgers are able to accurately and securely store
information using complex
cryptography, and can be accessed
using keys or other cryptographic
signatures
Security of Distributed Ledgers
Public-key cryptography is very popular
in distributed ledgers
This technique encrypts the information
using a public key that anyone has
access to
Because this information cannot be
decrypted without the recipient’s
private key, only the recipient has the
ability to decrypt and access the information.
Security of Distributed Ledgers
Other reasons why distributed ledgers
are more secure:
If an attacker were to try to
manipulate the ledger in some way,
they would need to simultaneously
change or remove every distributed
version of that piece of information,
which is extremely difficult.
In addition, Blockchain has
mechanisms that make information
more resistant to changes by one
party as opposed to multiple.
Smart Contracts
Distributed ledgers, like
blockchain, can be used for smart
contracts, or self-executing contracts.
These contracts facilitate the
exchange of money, property, or
anything of value in a transparent, conflict-free way while avoiding
the services of a middleman.
Smart Contracts
Smart contracts can be compared to vending machines.
Instead of going through a middleman to pay for and receive goods, (i.e. a cashier), you can simply use the smart contract to do a quick exchange.
Smart contracts also define and enforce rules and penalties around an agreement.
Blockchain’s Major Problems
Environmental Cost
Lack of Regulation
Complexity → Difficult to Understand
Environmental Cost
Encrypting and Decrypting large chunks of
information requires immense computing power
Bitcoin, for example, required more energy than
159 of the world’s nations to maintain its network
Of course, smaller blockchain platforms, like
proprietary ones that companies can use,
consume a fraction of that
Lack of Regulation
Lack of oversight and expertise in blockchain
in government has resulted in a more volatile and risky environment
Scams and market manipulation with
blockchain are abundant due to lack of
regulation
Ex. Oncecoin
Ponzi Scheme; targeted at investors making
hasty generalizations trying to get in on
Blockchain
Difficult to Comprehend
Many technology experts praise blockchain
and its ability to cut out the ‘middleman’ in many transactions
This has lead to innovation across many different
industries with the implementation of Blockchain
However, the ‘middlemen’ we have today,
such as banks, governments, and other
institutions work adequately, so there is no
significant demand for this change
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