In this segment, we are going to understand the different advantages and disadvantages of Blockchain Network.
The Blockchain Advantages
Blockchain technology is a decentralized system and it is the primary advantage of this innovation. But for what reason is it significant in our life? The response to this question is extremely straightforward, it isn’t important to work with the third-party association or with the central administrators. It implies that the blockchain system works without intermediary and all members or nodes of this Blockchain technology take the decisions. Every system has the database and it is very important to secure this database, since when the system is working with the third-party association, there is a chance of hacking of the database or the information may turn up in inappropriate hands. The procedure of database security may take a great deal of time and may go through a ton of cash. The use of Blockchain innovation can be used in this case, because the data stored in Blockchain have their own proof of validity which implies that the data can be verified and processed independently.
Each activity is recorded to the Blockchain and the information of records are accessible to each member or node of this Blockchain and can’t be changed or deleted. The result of this recording gives the Blockchain transparency, immutability and trust.
The immutability achieved on the data are agreed and shared over the Blockchain. At the point when the data will be stored in the Blockchain, it won’t be conceivable to modify or delete it, if the system is centralized, it very well may be modified or deleted because the decision is made by one individual entity. Be that as it may, if the system is decentralized, like the Blockchain, every information which is stored to the Blockchain, is copied to every node in this Blockchain network. To change or delete the data into the Blockchain is conceivable when an attacker has the fabulous computing power to have the option to overwrite or delete the data on all nodes or systems. If the Blockchain comprises a few nodes or systems, the technology is more presented to be attacked and if there are a lot of systems or nodes in the Blockchain, at that point the system becomes more secure and progressively transparent.
The transparency of the Blockchain is achieved on the data copying process. Each member can take a look at all the data, likewise it implies that each activity is shown to members or nodes of the Blockchain. The Blockchain is designed in such a way that it can show any issues and correct them if it is essential.
The high security of the Blockchain innovation is accomplished on the individual section into the system. Since every individual who enters the Blockchain is provided with the one of a unique identity which is linked to his account. Another purpose behind the Blockchain security is the dependable chain of the cryptographic hash. At the point when a new block is created, it is important to compute hash for the new block. The new hash clearly includes the past block hash’s value. The hash comprises the block’s ID number, the past block hash’s value, time of block creation i.e. timestamp, the client ID number and the merkle root where the data is stored about past data and its hashes. For this situation, it is difficult to change any data in the hash value.
The last advantage is the faster processing. In traditional technology, the data exchange takes a lot of time in processing and initialing into a financial organization. The use of the Blockchain technology assists with diminishing the time for the processing and initialing.
The Blockchain Disadvantages
If the Blockchain technology has some points of advantages, this technology has disadvantages or difficulties also.
The main drawback of the Blockchain technology is the high energy utilization. The utilization of energy is required for keeping a synchronized data record. Each time a node is created, it speaks with each and other nodes of the network. Along these lines, the transparency is created. The blockchain network system’s miners are trying to solve a great deal of solutions every second to validate the data present in the block. They are utilizing a significant amount of computer power. Each node is giving some degrees of adaptation to fault tolerance, guarantees zero downtime and is making information stored on the Blockchain unchangeable and censorship-resistant. Yet, these activities consume power and time – it is inefficient.
The signature verification is the main challenge of the Blockchain, every data exchange must be signed with a cryptographic method, the enormous computing power is important for the computation procedure to the sign. It is one reason for high energy utilization.
The other issue of the Blockchain is the Splitting of the blockchain. The nodes which are running the old software, won’t acknowledge the data exchanges in the new chain. This chain is made with a similar history as the chain, which depends on the old software. It is named the fork. There are two types of forks – the soft fork and the hard fork.
The soft fork sets up the new ruleset to the blocks in the protocol. The nodes of the network are updated to enforce the soft fork’s standards. If the block, which was valid before violates the new soft fork standards, the block won’t be considered after the soft fork initiation. For instance, the soft fork is limiting the block size until 100 kB, before it was 1 MB. It implies that the blocks which are bigger than 100 kB, won’t be valid in the new chain after upgrades.
The hard fork loses the ruleset to the blocks in the protocol. This procedure is the equivalent with the soft fork process, yet the worth and consequence of it is the opposite. For instance, the hard fork is expanding the block size to 3 MB from 2 MB. If the block comes under all the principles of hard fork, the block will be accepted, regardless of whether the block was in the chain previously or not. It is an upgrade that is not compatible with the old version of software so if the block size in the blockchain is increased, that would be a hard fork because the new version of software that works with increased block size would not be able to communicate with the old version of the software and vice-versa.
The Blockchain can be attacked by the different threats, which are connected with the PoW and PoS protocols. Most of them are almost impossible.
51% Attack : A 51% attack is an attack on a blockchain by a gathering of miners who control over half (50%) of the system’s mining hash rate. Attackers with dominant part control of the system can interrupt the addition of new blocks by preventing different other miners from completing the block in the blockchain.
Double Spending Attack : It happens when a blockchain system is interrupted and digital cryptocurrency is basically stolen. The attacker would send a copy of the currency exchange to make it look real or might delete the transaction. In spite of the fact that it happens rarely.
Sybil Attack : It is a kind of attack found in distributed systems where a node in the system works different identities effectively and simultaneously.The primary point of this attack is to pick up most of the impact of attack in the system to complete illegal activities in the blockchain system. In this attack, a single node has the ability to make and operate numerous identities (user accounts, IP address based identities). To outside nodes, these various fake identities appear to be genuine one of the identities.
DDoS Attack : A distributed denial of service (DDoS) attack happens when numerous systems located in any part of the world flood the data bandwidth capacity or resources of a targeted system, normally at least one web server. Such an attack is frequently the consequence of different compromised systems (for instance, a botnet) flooding the targeted system with the traffic.
Breaking the Cryptographic Schemes Attack : It is conceivable that if an attacker takes the use of a quantum computer, for example, ‘Shor’s Algorithm’ which can break the RSA encryption.