This decentralised approach means blockchains are inherently secure. It is difficult to (surreptitiously) alter an earlier transaction, as the record of that transaction, and more importantly that data block, would need to be altered across the entire network, and all subsequent transactions (and data blocks) would also be affected. Further, no one device is considered a trusted source, or having an official copy, and so has greater influence, or determines what is consider true or correct. The devices on the network must all confirm a transaction, and that strengthens the authoritativeness of blockchain.<\/p>\n

In summary, the strength of blockchain, and hence its integrity, comes from two things. First, the size of the network and the volume of data replication required. The larger the network, the greater the likelihood it cannot be corrupted. Second, the use cryptography, and its coordination across the network, increases the security of the data, which is crucial to the authentication process. As a result, no data is ever destroyed, and through blockchain technology, there is a permanent, chronological and secure audit trail of all transactions, which is why Bitcoin, along with the other cryptocurrencies that are on the market today, are considered highly secure digital assets.<\/p>\n

Enough of the theory, how does blockchain work in practice?<\/h3>\n

One of the most pervasive challenges we have today is cybercrime and network security; networks are being breached; data is being stolen; files\/records are being altered. As more of our systems become digitised and go online, data \u2013 especially critical or sensitive data \u2013 it is becoming increasingly vulnerable. Blockchain technology can offer a robust solution.<\/p>\n

First, the typical practice is to have data stored on a server, and although there might be back-up and some redundancies, the approach is inherently centralised. Hence, if the server is compromised and data is altered, those changes may not be immediately flagged, and this modified data can become the new authority. For example, if a sum of money is stolen from a bank account, the unauthorised withdrawal and the corresponding balance are what obtains (are seen to be true), unless or until the account owner complains, or the bank uncovers the breach and tracks it through their system.<\/p>\n

If blockchain technology is applied, hacking a server and changing the records there will no longer be effective. Transaction records are saved across multiple (hundreds, thousands, millions of) devices, and changes to any one record must be corroborated across the network. Hence, to successfully fool the network, most if not all of the devices on the network would need to be hacked and their records changed, which if properly decentralised would be near impossible to accomplish.<\/p>\n

Further, when blockchain technology is applied, as currently occurs with cryptocurrencies, transactions can be completed without having to go through an intermediary. For example, if jack want to send some money to Jill online, he either transfers the fund via an intermediary, such as his bank, a digital wallet (e.g. via PayPal), or some other third party exchange (such as Western Union). On the other hand, in the cryptocurrency space, Jack solely controls his digital wallet and all of the steps needed to facilitate the successful transfer of funds to Jill are confirmed by the network itself \u2013 without any third-party intervention.<\/p>\n