The issue of security has been central to bitcoin since its development. On the one hand, bitcoin itself is very difficult to hack, and that is largely due to the blockchain technology that supports it. As bitcoin users constantly check the blockchain, hacks are unlikely to occur So far, no one has hacked a blockchain alone. Instead, it is usually a group of malicious actors or the main development team that collaborate to breach the security of a blockchain.
However, as blockchain platforms strengthen through the increase in nodes or participants, the possibility of hacking a decentralized network is getting closer and closer to zero. Earlier last month, the Coinbase security team noticed that something strange was happening in Ethereum Classic, one of the cryptocurrencies that people can buy and sell using the popular Coinbase exchange platform. His blockchain, the story of all his transactions, was under attack. Other times it is more of a gray area the complicated result of the interactions between code, the blockchain economy and human greed.
Unfortunately, since blockchain transactions cannot be altered, the only way to recover stolen money is to make a fork that all users recognize as the authorized blockchain. Thanks to its decentralized and distributed nature, blockchain technology is suitable for defending against hacker attacks. A blockchain protocol is a set of rules that dictate how computers on the network, called nodes, must verify new transactions and add them to the database. In addition, newer blockchain systems use academically proven techniques that would require highly specialized quantum computers to hack.
Bitcoin is considered piracy-proof because the entire network is constantly reviewing the Bitcoin blockchain. Blockchain technology is, in fact, a group of different technologies that can be used together in different ways to create different end results or applications. Unfortunately, however, recent incidents have shown that hackers can access blockchains in certain situations. Many different organizations, including those in the legal industry, use blockchain for various business functions.
Once a transaction has already been sealed in a block and added to the Blockchain, changing it is almost impossible. Still, most of the recent headline-grabbing hacks were not attacks on blockchains themselves, but on exchanges, the websites where people can buy, trade and hold cryptocurrencies. Looking ahead, legal professionals who encounter blockchain need to stay informed about risks and any new solutions. For that to happen, blockchain technology would have to replace vast swaths of legacy systems that are currently used in financial, government, commercial and public records in less than a decade.
In other words, forgetting what you heard from Bitcoin's boosters just because the information or currency is on a blockchain doesn't necessarily mean it's more secure than any other form of storage. And the very nature of public blockchains means that if there is a smart contract error, hackers will encounter it, as the source code is often visible on the blockchain.