Are you aware of the debate between private and public blockchain? There are many risks and benefits associated with each of them. However, it is essential to know the key differences between them. Primarily, these parts of blockchain have visible differences. So, it is crucial to identify the right platform and pick as per your requirement. This post will discuss the risks associated with public blockchain thoroughly.
Blockchain Security
When it comes to knowing about the security risks with a public blockchain, let us first have a clear idea of blockchain? It is primarily a ledger of transactions available in blocks that utilize cryptographic validation to connect themselves. In other words, each block uses the reference of the previous block through a hashing function that makes a linked chain named blockchain. It is possible to visualize blockchains as databases with validations that do not store in central locations. However, these peer-to-peer networks are present on multiple computers that allow the interested candidate to obtain a copy.
If you intend to have a completely decentralized network system, you can opt for a public blockchain. Integrating a public blockchain network with an enterprise blockchain process may not be easy. Read more about What are problems with Blockchain Adoption?
Risks Associated with Blockchain
Blockchain acts as a distributed ledger having a decentralized nature that can offer several benefits like security, trust, transparency, ease of use, and cost reduction. In this blog, we will focus on a public blockchain.
Blockchain technology allows anyone to read and write without authorization and permission. Rues and algorithms are complex, provide security, and are costly for the computation process. The most famous examples of these blockchains are Bitcoin and Ethereum. Plus, they are transparent, decentralized, and trustworthy. crypto trading has several examples of the public blockchain and possible risks.
1. 51% Attack
Public blockchains are susceptible to 51% of attack that incorporates blockchain with a consensus protocol. If a single user or group possesses more than 50% of the total hashing power. It can result in exploiting 5% of the total hashing power. Its influential mining volume can help attackers build a substitute chain followed by other participants. When a blockchain uses Proof-of-work consensus, at this point, 51% attack will act as a “rival chain.”
In addition, this type of attack can encompass its network-based mechanism.
2. Race Attack
Blockchain network with Proof-of-work consensus mechanism is moe vulnerable to race attack. It occurs in the way when an attacker creates two computing transactions, and it leads to the occurrence of a race attack.
As a result, recipients receive payments, and the transaction is not confirmed yet. In this way, the prey individual accepts the transactions. The attacker sends inconsistent transactions to various vendors with two different machines.
But the amount gets resent of cryptocurrency to the attacker that makes the first transaction null. So, how do you deal with this “Race attack”? When a vendor can wait for block confirmation that may be even one before sending more assets.
3. Finney Attack
The Finney attack can occur using blockchain technology known as the Finney attack. It is a type of double-spending that means a participant can use a single bitcoin twice. In simple words, through this attack, an individual can spend a single bitcoin twice and receive assets based on the value of two bitcoins.
This attack leads to the pre-mining of one transaction in a block, and a duplicated transaction gets sent to the user. This process occurs when an attacker spreads the partnership that involves the initial transaction and gets accepted by the recipient. It will result in sending the null transaction to the recipient. In this way, the attacker will successfully make a double-spend transaction.
Conclusion:
In short, we cannot decide that any of the blockchains is perfect to use because each of them has advantages and disadvantages. So, each blockchain consists of unique characteristics. Yes, you can consider your business requirements to pick a suitable blockchain for you. Interestingly, you have another option to learn how to design and implement your blockchain.
