What makes the Bitcoin blockchain secure?

Name a company and it has probably been hacked. With 71% of hacks financially motivated, the question arises: can the Bitcoin network also be hacked? After all, it is a tempting target, with a market capitalization of nearly $ 335 billion.

We never like to say never to Decrypt, but the answer is: practically not. Indeed, Bitcoin has proven remarkably resilient to shock and stress over its decade-long history. And while cryptocurrency exchanges have been hacked with depressing frequency and their Bitcoin stores redistributed, actually compromising and taking control of the Bitcoin network itself is a far more daunting prospect.

This is because Bitcoin is cryptographic, irreversible, distributed, is public.

Bitcoin uses public key cryptography

Bitcoin is the original cryptocurrency. “Crypto” is short for cryptography; more specifically, “public key cryptography”. This means that using a private key and a public to ensure the authenticity and integrity of transactions; Bitcoin’s digital signatures are signed using something called Elliptical Curve Digital Signature Algorithm (ECDSA).

The only way someone could derive a private key from a given public key would be to do a brute-force lookup by trying every possible value for a private key and checking to see if it has generated the corresponding public key. In practice, this is impossible, as there are 1077 possible combinations.

Bitcoin transactions are irreversible

The clever thing about Bitcoin is that it runs on a blockchain. A “block” is just a batch of newly processed transactions. Each block is linked to the previous batch of transactions by a one-way cryptographic function, forming a “chain”.

Blockchains are write-only ledgers. You can add information to them, but the blocks, once written, can not be changed. It is as if all transactions were buried under the weight of the other blocks.

This means that people can’t just cancel a transaction from a week ago, like your credit card company might after you “accidentally” bought that dog wig on Amazon.

Bitcoin uses a distributed ledger

The traditional financial ecosystem relies on centralized parties such as banks to keep records of transactions and prevent fraudulent transactions. But that means you rely on those parts to act in good faith; each of these parties may modify the transaction log to falsify or cancel a transaction.

Blockchains are different; they are a type of distributed ledger technology. Instead of your money sitting in a centralized database, vulnerable to a single point of failure, it’s just about everywhere (or, more accurately, the transaction record is spread across many separate parts).

It may seem like a bad thing, but it’s not. Everyone who runs Bitcoin software with a “node”, a computer, is responsible for verifying transactions. Most nodes need to more or less agree that the transaction record is accurate before they can be approved. (Don’t worry – it’s automated, so no one clicks “I agree” every 10 minutes a new block is created.)

In order for someone to shift their blockchain, he would need more of. For the Bitcoin blockchain, carrying out such an attack would require the acquisition and coordination of resources even outside the most powerful countries.

With so many different people running the software and a collective interest in keeping the precious coin safe, this is unlikely to happen. It is simply too expensive and difficult to coordinate.

The Bitcoin blockchain is public

Everyone can see the transactions on the Bitcoin blockchain. It is a public register. Even if it means someone can see what’s in your wallet, they don’t know it belongs to you, because your funds are in a pseudonymous address. Also, they can’t take your money; only the person who holds the private key of a Bitcoin address can move the funds.

Basically, thanks to this transparency, everyone can see the transaction log and verify that everything is up. Anyone can control the system, which builds trust.