Security, Privacy, and Trust Management and Performance Optimization of Blockchain

Introduction

Why Blockchain – does it secure? Can we trust on it?

Blockchain technology has been called the one of the greatest innovations since the internet. Blockchain is a peer-to-peer distributed ledger or public registry that permanently records transactions in a way that cannot be erase or update. Blockchain is designed to use a cryptographic hash and timestamps so that record cannot be change once they are created. This makes easier for the blockchain experts to inspect record ledger or registry to determine the facts of any given transactions or to detect attempts to tamper with the ledger.

Blockchain is secure. ‘Secure’ doesn’t means to hide information but it simply means that nobody going to tamper records on the blockchain. Even if somebody does attempt to fraudulently alter records, original records will still exist on the valid ledger and can be pinned down by comparing information on duplicate records.

Billions of people in the world who can’t trust intermediaries such as banks, and other legal system for transactions or accurate record keeping. Particularly, Blockchain are useful in these cases to provide trust and assurance to people when transacting with one another. Centralized databases and institutions work when there is trust in the system of regulations, laws, government and people. Even sometimes, this trust is betrayed, causing people to lose money and assets. Blockchain is a decentralized database which remove the need of centralized institutions and databases. With all people connected to the blockchain network having access to the blockchain ledger in a way they can view and validate transactions which create transparency and trust. Although blockchain removed intermediaries to maintain the trust between the people involved in the transactions. The removal of intermediaries improved transparency and decentralized structure of the blockchain (Mark Gates, 2017).

Figure 1.

Blockchain architecture diagram

Why Blockchain?

There are many problems faces by the current system like:

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  Banks and other third parties charge fees for transferring money.

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  Mediating cost increases transaction costs.

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  System is lacking transparency.

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  System is lacking fairness.

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  Financial exchanges are slow so checking and low-cost wire services take many days to complete it.

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  Central authority can misuse their power and can create money as per their own will.

We need a system which solve the above problems:

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  System which eliminate the need of intermediaries for making transaction cost nil or negligible.

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  System which is transparent in order to avoid manipulation.

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  System which is tamper resistant in order to avoid misuse.

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  System which enhances transaction execution speed and can facilitate instant reconciliation.

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  System in which creation of currency is not in control of any central authority.

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  System which is regulated to maintain the value of the currency.

Structure Of Blockchain

Blockchains are composed of three core components. They are: