Key Technologies of Blockchain
Last updated
Last updated
Several technologies are associated with the blockchain to add transactions to the network securely. Blockchain provides the secure storage of transaction records in a decentralized and secure manner. But, to achieve this immutability in the network, we need to consider several technologies associated with the blockchain, which first is cryptographic hash functions.
Blockchain uses cryptographic hash functions to preserve and secure transaction storage and sharing in the network. It means generated hash of the data has to pass through a cryptographic hash algorithm to yield an output that cannot be altered or tampered with by any malicious activity, which leads to a process known as hashing.
Hashing is a process that takes input data of variable length from a block and generates a fixed-size hash value. For instance, let M represent the input message for the hash function Hf. The hash function then produces a fixed-length hash value, represented as hv = Hf(M).
For blockchain, different types of cryptographic hash algorithms such as SHA-256, Message Digest algorithm (MD5), and many more can be used to generate the hash by passing the variable size data as an input For example, we want to validate the transactions before adding them to the blockchain network. For that, a cryptographic hash algorithm can be applied to the data block to get the output in the form of a fixed hash size for the particular transaction. So, if there is any modification in the input, change will be reflected in the hash value, which is known as the avalanche effect.
Characteristics of hash functions to ensure the security in the blockchain network:
Deterministic: The deterministic property of the hash function ensures that for the same input data, the output in the form of hash value should be the same no matter how many times input data of block has been passed through the cryptographic hash function.
Fast Computation: The whole process of hashing should be quick enough to get the desired hash value of data as output; otherwise, delay in getting the desired output on applying the cryptographic hash function will not be efficient for the security of the blockchain network.
Feasibility: The feasibility property of the hash function states that once the hash value of data has been obtained from the input data, the user can’t determine the original data using the output hash value. This property ensures the security in the network as the original data is secure after getting its hash value as the malicious attacker can’t get knowledge about the original data.
Message authentication is a mechanism used to verify the integrity of data in the blockchain network. It ensures the authenticity of data, as data received at the recipient’s side should be the same as that sent from the sender’s side. Data should not be manipulated or modified while sending it to the recipient. So, the cryptographic hash function facilitates message authentication in which the output hash value for the input is often termed as a message digest. Message authentication is achieved using a Message Authentication Code (MAC).
Message Authentication Code- MAC is a keyed hash function that is used between two parties, i.e., sender and receiver by sharing a secret key to authenticate information exchanges between them. MAC function works in the same way as the hash function, but it uses a secret key additionally to authenticate the message.
MAC is an algorithm that takes as input a message and a secret key and produces a fixed-sized output, i.e., MAC value, similar to the hash function, which can be later on verified to match the message.
The message incorporated with the generated MAC is sent to the recipient’s side to verify the authenticity of the sender’s message.
On receiving the message with MAC, the sender’s message with the same shared secret key is passed into the MAC algorithm at the recipient’s side to determine the MAC value. If the MAC value at the recipient’s side matches with the MAC value at the sender’s side, the message is authenticated, and the receiver accepts the message due to its authenticity computed using MAC.
But, if the computed message at the receiver’s side does not match with the message at the sender’s side, then there has been some modification in the original message sent by the sender, so the receiver rejects the message ensuring the authenticity in the network.
A good MAC provides blockchain network with a property of unforgeability, i.e., it should be infeasible to compute a pair message+MAC value which successfully verifies with a given secret key without knowing the key exactly and in its entirety.
Digital Signature In the real world, we use signatures to verify someone’s identity; for example, if some person requests to access confidential information, access can be granted if that person’s signature matches with the signature signed for that confidential information. Similarly, a digital signature associates person with a particular information digitally. A digital signature is a mathematical technique used to validate the authenticity and integrity of a message, software, or digital document. The operation of the digital signature is similar to that of the MAC. In the case of the digital signature, the hash value of a message is encrypted with a user’s private key. Anyone who knows the user’s public key can verify the integrity of the message that is associated with the digital signature.
The authentication of message exchange using a digital signature between sender and receiver involves a public key and private key.
The message as an input is passed to the cryptographic hash function, which yields an output hash value at the sender’s side.
Then, the output hash value at the sender’s side is encrypted with the sender’s private key using a digital signature, so that anyone who knows the sender’s public key can validate the authenticity of the message.
At the receiver’s side, the message sent from the sender is again passed through the hash function to check the authenticity of the message.
For that, the hash generated at the receiver’s side is verified with the sender’s public key and if it matches with the hash value of the message, then the message is originally sent by the sender and the receiver can decrypt the message with the help of sender’s private key.
Traditionally, a paper contract was involved between users to initiate the transaction via a centralized party, i.e., a bank or any government institution. But, it tends to pose various security concerns for users as the transaction can be modified or altered by the third-party systems. a computer scientist and cryptographer, Nick Szabo, proposed the term smart contract to perform transactions between users without any intermediary or centralized authority. For that, smart contracts which consist of self-executable code, need to be executed with the blockchain technology, i.e., on an open-source blockchain platform often called Ethereum. Suppose the users fulfill predefined agreements or conditions mentioned in the code. In that case, smart contracts authenticate them to initiate the transaction and mask the user’s identity providing security in the network
Blockchain is a distributed decentralized network with no central authority to check or validate transactions. It provides immutability, transparency, security, and privacy which are possible due to consensus protocol. The process through which every node present in the network comes to a common accord about which transactions are valid and will be added to the blockchain is known as consensus algorithm. If the consensus mechanisms used in blockchain are not suitable, they are at risk of various attacks.
The evolution of blockchain consensus mechanisms began with Proof of Work (PoW), popularized by Bitcoin, which involves miners solving complex mathematical puzzles requiring significant computational power. The first miner to solve the puzzle gets to add the next block and receives a reward. These puzzles are asymmetric, meaning they take time to solve but are easily verified. Miners use a trial-and-error approach, where computational power is key to solving puzzles quickly. As a more energy-efficient alternative, Proof of Stake (PoS) emerged, where validators stake coins rather than investing in expensive hardware. Validators with larger stakes or longer staking durations have a higher chance of creating the next block, earning rewards through transaction fees. Proof of Capacity (PoC) allows miners to store precomputed solutions on their hard drives, and the miner with the fastest solution wins the chance to create the next block. More storage increases the likelihood of creating a block. Proof of Burn (PoB) involves miners sending coins to an unspendable address, effectively burning them, in exchange for mining privileges. The more coins a miner burns, the higher their chances of mining the next block. Lastly, Proof of Elapsed Time (PoET) introduces fairness by assigning random waiting periods to miners, with the first miner to complete their waiting time earning the right to create the next block. This mechanism ensures equitable opportunities for miners while preventing any one miner from consistently dominating the network.
Blockchain technology relies on a variety of advanced techniques to ensure the integrity, security, and immutability of transaction records within its network. Key among these are cryptographic hash functions, which preserve data integrity by generating unique, fixed-size hash values that are sensitive to any modifications. This property, known as the avalanche effect, ensures that even a minor change in the input data results in a drastically different hash value, which helps in detecting tampering.
Hash functions are characterized by their deterministic nature, fast computation, and infeasibility of reversing the hash to obtain the original data, all of which contribute to the robustness of the blockchain. Alongside hashing, message authentication mechanisms like Message Authentication Codes (MACs) and digital signatures play crucial roles in verifying data authenticity and ensuring that messages have not been altered during transmission.
Smart contracts further enhance blockchain functionality by automating transactions and agreements between parties without the need for intermediaries, thus reducing the risk of fraud and errors. Finally, consensus mechanisms such as Proof of Work (PoW), Proof of Stake (PoS), Proof of Capacity (PoC), Proof of Burn (PoB), and Proof of Elapsed Time (PoET) ensure that all nodes in the decentralized network agree on the validity of transactions and the addition of new blocks, maintaining the network's security and fairness.
Together, these technologies form the backbone of blockchain systems, enabling secure, transparent, and efficient transactions in a decentralized environment.
