Is Blockchain trustworthy?

The short answer is not really. The concept of blockchain seems perfect from the outside however like every other technology it suffers from a few drawbacks and has a few disadvantages. Scholars argue that the best and worst part of Blockchain is its security. Now that might sound like an oxymoron but if you think carefully it is right. We are all aware of how the blockchain works (Please refer to my previous article which explains all about blockchain in detail here), who exactly is a miner, the consensus algorithm and finally the verification of the newly added block to maintain consistency. The previous blocks hash, Merkle trees root hashes and the nonce together make the entire blockchain unbreakable. That’s exactly why security is the primary advantage of the blockchain. However, there is something that can render that statement void. Yes, there is a possible attack which can affect the entire ecosystem of the blockchain and render it obsolete to be used. It is the 51% attack.

The 51% attack is a very known problem in the blockchain industry that presently has no solution to it. The occurrence of this attack has never taken place till date but the with the rising number of nodes and miners over the blockchain network and the pooling of nodes over the network the occurrence of such an attack soon is possible. Whenever a miner provides his proof of work and mines a new block, he/she has to broadcast the newly mined block to all the nodes in the network for verification. A 51% attack occurs when over 50% of the nodes together fake the authenticity of a malicious new block so that it can be added. As a result, the block is added to the chain. This, in turn, can also happen with the previously added blocks in the chain leading to tampering the entire system. So for example if malicious miners decide to take down the blockchain, all they need to do is get over 50% of the votes to verify a block, and once the block is verified the newly updated chain is updated at every node to maintain consistency. Every nodes local copy will be updated with wrong transactions and it will go unnoticed. The 51% attack is a one of a kind attack which has never occurred with haunts the cryptocurrency domain over the blockchain.

The other major problem blockchain currently faces is its scalability towards processing records at a higher rate. With the current popularity of the system, millions of users using it at the same time, block size restrictions and the consensus algorithms, the total number of transactions processed in a second is as low as 7–8 per second. Also, storing raw data files over the blockchain would lead too even lesser transactions per block which decrease the transactions per second. So data storage over the blockchain is not an ideal and feasible idea. To solve the storage issues system integrations with the Interplanetary File System have seen a rise in demand. The IPFS itself being decentralised and hosted on multiple peers just as the blockchain is an ideal tool of data storage. There are new consensus mechanisms under the name Proof of Kernel Work (PoKW), Proof of Luck (PoL), Proof of Access (PoA) which helps in overcoming few of the issues concerning the scalability of the traditional PoW as well as it provides efficient protocols for access control.

There are several challenges faced by the blockchain on access control. As we know that the public blockchains set no restrictions on who can and cannot read the information, update information over the blockchain, a proper means of dynamic access control is required to prevent everyone from adding/updating information. As a result, many organisations are driven towards the use of permissioned blockchains to maintain access control over the network for sharing of sensitive records. Permissioned blockchains set different levels or profiles at which users can perform different actions. This permission blockchain sometimes clubbed with the smart contracts would help to achieve the desired control at nodes, profiles or even user levels.

Also, as everything in a public blockchain is visible to everyone over the network, careful attention has to be paid on the information that is over the blockchain!!!

So, do you still feel that the blockchain is trustworthy? Is it worth investing thousands of dollars during its setup? It all depends on your use case and application. Considering these shortcomings, different types of blockchains have emerged in the market. We have the private, public, and the consortium blockchains to choose from, however, with the added restrictions and changes to the blockchain, it is slowly losing its originality.

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