Blockchain security algorithms

With the growing popularity of blockchain implementation, the problems associated with the security of this technology are increasing. Thus, there is an increasing interest among people in understanding blockchain security algorithms. In case you want to know what algorithms are used in the blockchain to ensure security, you have come to the right article.

What is blockchain?

Blockchain is a chain of related data that is recorded in blocks. It is convenient to think of it as a distributed database that is shared among the nodes of a computer network. As a database, the blockchain stores arbitrary (most often small) information in digital format. For the general public, blockchain is best known for its important role in cryptocurrency systems to provide secure and decentralized recording of transactions. The novelty of blockchain is that it guarantees the accuracy and security of data recording and builds trust without the need for a trusted third party – so that the system can operate autonomously.

How does blockchain work?

The purpose of blockchain is to allow digital information to be recorded and disseminated, but not edited. Thus, the blockchain is the foundation of immutable ledgers or transaction records that cannot be changed, deleted or destroyed.

Blockchain offers the guarantee of a secure, distributed and transparent exchange of information of any kind between two parties. For example, in the case of cryptocurrencies, this information uniquely identifies the transaction between users – its author and recipient, thereby guaranteeing the security of the transaction itself. However, many people question how the blockchain provides security for everyone involved.

The blockchain is based on cryptographic methods and consensus mechanisms along with other algorithms to ensure reliable security. In the following paragraphs, we will break down these algorithms.

1. Cryptographic algorithms

The blockchain is an ever-growing collection of records called blocks. With any approach other than modern blockchains, as the network grows, it would be difficult to ensure that all information on the blockchain is protected from any unwanted threats. Therefore, cryptography is one of the basic requirements of the blockchain.

In most cases of use in the modern world, cryptography is used to encrypt data transmission over unsecured communication channels. It offers a platform for customizing protocols and methods to avoid third-party interference in accessing and obtaining information about data in private messages in the process of communication. In the case of blockchain, cryptography allows you to create a system in which it becomes virtually impossible for a group of attackers to change old blocks.

2. Digital signature

A digital signature is a cryptographic algorithm based on asymmetric encryption: using a private key, the author (who is the only owner of this key) can sign any message. Signing is most often done over hashed data contained in a message. Then, using the public key (which is publicly available), any user can verify that it was the key holder who signed the message. In the case of blockchain, the user signs any outgoing transaction from him with his private key. The recipient, like any other participant in the network, can decrypt the transaction to make sure that the transaction really came from the given sender using the public key provided by the sender.

Due to digital signatures, it becomes impossible to spend the user’s funds without his knowledge, since without his private key, the transaction will not receive the correct signature and, as a result, will not be accepted by the network of nodes participating in the blockchain. At the same time, the impossibility of forging a signature (in other words, guessing a private key) is ensured by the complexity of breaking the asynchronous encryption algorithm, which underlies the chosen signature method. For example, in the case of the algorithm on elliptic curves Ed25519, the complexity of breaking lies in the difficulty of solving the discrete logarithm problem – choosing the number d such that dG = Q for some points of the curve G, Q. Since in the case of Ed25519, the number d is in the range up to 2255- 19, then cracking the private key d in the presence of the public key Q becomes practically impossible for classical computers.

3. Hashing

Before combining transactions into blocks, each transaction must be hashed. The hash added to the block is compiled based on the data recorded in this block. In addition to the hash of the block itself, the hash of the previous block is added to it, due to which a connected sequence of blocks is created. The hashing algorithms used in the blockchain (keccak in most cases) provide the so-called avalanche effect – even a small change in the hashed data leads to a significant change in the hash. Consequently, a change made in any transaction already executed will generate a completely different hash, which will then change the hashes of all subsequent blocks.

The decision to validate each new block is made by the majority of the nodes participating in the network. Thus, in order to modify the blockchain, about 51% of the system must agree with this – thereby it will be possible to confirm any invalid transaction. This process is called a 51% attack. The complexity of this attack lies in the fact that a group of unwanted people needs to take control of more than 51% of the computing devices on the network, which is almost impossible for large blockchains.

4. Peer-to-peer network

In large corporations, a huge amount of personal data of users is stored on separate devices, which increases the risk of data loss in the event of hacking, mishandling or system loss. Blockchain intends to eliminate this dependence on central authority. To do this, the blockchain works in such a way that the nodes in the blockchain system can confirm the legitimacy of a transaction instead of a third party.

Transactions between clients, such as sending and receiving digital money, are sent to every node on the network. Nodes ensure the reliability of a transaction before it is documented as a block in the blockchain by checking the sender’s past transactions to ensure that he / she has not spent twice or spent more funds than they are acquiring.

Later, protocols of the agreement, such as work verification and bet confirmation, are sent by the miners. These protocols allow nodes to agree on the order and amount of transactions. When a transaction is verified, it is allocated as a block on the blockchain. User protection is enhanced by the decentralized nature of the blockchain and no need for a central authority.

5. Proof of work

Proof-of-work is data that allows any node to verify that whoever created this block has done a significant amount of computational work. In other words, no node can create a valid block without doing an undefined but significant amount of work. The creation of any block requires a certain amount of processing power, and any other node can verify that this power was spent by whoever created the block.

Unlike transactions, the proof-of-work system required for each block allows us to find a convenient solution: since each block requires a certain amount of work, it is only natural that the only valid blockchain is the one with the most blocks. Think about it: If a Proof-of-Work system works because each block requires a certain amount of work (and time), the hardest set of valid blocks to break is the hardest to break. If a malicious node or group of nodes tried to create a different set of valid blocks, always choosing the longest blockchain, they would always have to repeat more blocks (since each node points to the previous one, changing one block forces all blocks after it to change).


In conclusion, it is quite difficult to find the best blockchain security algorithms. Algorithms are adapted to solve specific problems given specific input data. Cryptographic algorithms such as digital signatures and hashing help protect information from third parties. Consensus algorithms help ensure the integrity of participants and transactions on the blockchain network.

Thus, it is quite difficult to choose a specific algorithm to protect the security in the blockchain. While blockchain is inherently secure, immutable, and transparent, algorithms are required to provide all of these characteristics!

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