Principle 4 Security
Summary
TLDRThis script delves into the security principles of blockchain technology, emphasizing its no-single-point-of-failure design and cryptographic safeguards that ensure confidentiality, authenticity, and non-repudiation. It addresses the digital security concerns arising from the internet's vulnerabilities, such as hacking and identity theft, and highlights the significant reduction in financial sector identity thefts post the introduction of Bitcoin. The script explains the role of public key infrastructure (PKI) in establishing a secure blockchain platform, the use of advanced asymmetric cryptography, and the economic incentives for adopting PKI in transactions. It also touches on the energy efficiency of different blockchain algorithms and concludes with the increasing safety of blockchains as they grow in length.
Takeaways
- 🔒 Blockchain networks are designed with security as a foundational principle, ensuring no single point of failure and providing confidentiality, authenticity, and non-repudiation.
- 🔑 Cryptography is mandatory for participation in blockchain networks, which helps prevent reckless behavior from affecting the entire system.
- 💻 The script addresses the lack of online security due to the rise of internet-related security risks such as hacking, identity theft, fraud, and malware.
- 📉 A significant drop in financial sector identity thefts from 50% in 2008 to 5.5% in 2014 is noted, but this is offset by a rise in breaches in the medical and healthcare sector.
- 💰 The average cost of a data breach is nearly four million dollars, highlighting the high financial impact of such events.
- 🚫 The script criticizes the reliance on weak passwords and the lack of emphasis on stronger security measures by service providers and employers.
- 🔐 Public Key Infrastructure (PKI) is highlighted as a breakthrough in blockchain security, making it nearly impossible to hack a long blockchain.
- 🔑 The Bitcoin blockchain is the largest civilian deployment of PKI, emphasizing the widespread adoption of this advanced cryptographic method.
- 🔄 Asymmetric cryptography, while secure, can be cumbersome to use, and digital certificates, though they offer another solution, are not widely supported by common email services.
- 💼 The script suggests that blockchains like Bitcoin provide incentives for the wide adoption of PKI, enhancing the security of transactions and the protection of privacy.
- 🛡️ The Bitcoin blockchain operates on the SHA-256 algorithm, a standard recognized for its difficulty in solving, thus ensuring the security of the network.
- ⚖️ The script contrasts proof of work, which is based on computational effort, with proof of stake, which is criticized for potentially favoring the wealthy.
Q & A
What is the fourth principle of blockchain design mentioned in the script?
-The fourth principle of blockchain design mentioned in the script is security. It incorporates safety measures with no single point of failure, providing confidentiality, authenticity, and non-repudiation to all activity.
What does non-repudiation mean in the context of blockchain?
-Non-repudiation in the context of blockchain means the authenticity of records, such as digital signatures, which cannot be denied. It ensures that the identity of the sender is confirmed and the integrity of the data is maintained.
Why is cryptography mandatory for participation in a blockchain network?
-Cryptography is mandatory for participation in a blockchain network because it secures the transactions and ensures the authenticity and confidentiality of the data. It prevents unauthorized access and tampering with the records.
What problem does blockchain technology aim to solve regarding online security?
-Blockchain technology aims to solve the problem of lack of online security by providing a more secure way to conduct transactions and store data, addressing issues like hacking, identity theft, fraud, cyberbullying, phishing, spam, and malware.
What was the situation with financial firms and identity thefts in 2008 according to the script?
-In 2008, financial firms like BNY Mellon, Countrywide, and GE Money accounted for over 50 percent of all identity thefts reported that year, highlighting the vulnerability of traditional financial systems to security breaches.
How has the financial sector's share of identity thefts changed from 2008 to 2014?
-By 2014, financial sector identity thefts had fallen to 5.5 percent of the year's total, indicating a significant decrease in identity thefts within the financial sector.
What is the average cost of a data breach according to IBM?
-According to IBM, the average cost of a data breach is nearly four million dollars, highlighting the high financial impact of such incidents.
What is the significance of public key infrastructure (PKI) in the context of blockchain security?
-Public key infrastructure (PKI) is significant in blockchain security as it provides an advanced form of asymmetric cryptography. It requires users to have two keys, one for encryption and the other for decryption, establishing a secure platform for transactions.
Why is asymmetric cryptography considered more secure than symmetric cryptography in the context of blockchain?
-Asymmetric cryptography is considered more secure because it uses two different keys for encryption and decryption, making it harder for unauthorized parties to access the data. It also eliminates the need for a secure channel to exchange keys, as in symmetric cryptography.
What is the difference between proof of work and proof of stake in terms of energy consumption and consensus mechanism?
-Proof of work requires substantial computing power and thus consumes more energy to solve the block puzzle, while proof of stake relies on the wealth of the participants, where those with more tokens have a greater say in the consensus process. Proof of work is considered more egalitarian and secure, whereas proof of stake is more energy-efficient but potentially less democratic.
How does the length of a blockchain affect its security?
-As a blockchain gets longer, it also gets safer. Hacking a long chain requires substantially more computing power than attacking short chains, making it increasingly difficult for attackers to alter the blockchain data.
What implications do blockchain security measures have for personal and technological security?
-Blockchain security measures imply that as we rely more on digital tools and platforms, the secure design and transparency of a blockchain can help protect our transactions and data, reducing the risks associated with online security threats.
Outlines
🔒 Blockchain Security and the Advent of PKI
The first paragraph discusses the fundamental security principles of blockchain technology. It emphasizes the absence of a single point of failure and the incorporation of safety measures that ensure not only confidentiality but also authenticity and non-repudiation of all activities. The use of cryptography is mandatory for participation, and any reckless behavior affects only the individual responsible. This addresses the widespread issue of online security risks such as hacking, identity theft, and fraud. The text highlights the inadequacy of common security measures like flimsy passwords and the lack of specialized secure technology in financial institutions. It points out the significant reduction in financial sector identity thefts post the introduction of Bitcoin, but notes a rise in breaches in the medical and healthcare sector. The high costs associated with data breaches and the potential for blockchain, through the use of public key infrastructure (PKI), to provide a secure platform for transactions are also mentioned. The paragraph concludes by explaining the concept of PKI and its significance in making blockchain a breakthrough in secure digital transactions.
💼 Incentivizing Privacy with Blockchain and PKI
The second paragraph explores how blockchains, specifically Bitcoin, offer solutions to privacy and security concerns by providing incentives for the widespread adoption of PKI in transactions. It explains that the use of Bitcoin and its underlying protocols can secure the storage and exchange of not only currency but also confidential information and other digital assets. The paragraph details how digital currency operates through cryptographic hashes and transactions, with users holding their own crypto keys and being responsible for their security. The Bitcoin blockchain is highlighted as running on the SHA-256 algorithm, which is a U.S. federal information processing standard and extremely secure. The proof of work mechanism, which rewards participants with new Bitcoin for solving computational puzzles, is contrasted with proof of stake, which is criticized for potentially favoring the wealthy. The paragraph concludes by noting the increasing safety of a blockchain as it grows in length, likening it to the difficulty of turning a chicken McNugget back into a chicken, and emphasizing the broader implications of blockchain security for personal and transactional security in the digital age.
Mindmap
Keywords
💡Blockchain
💡Security
💡Non-repudiation
💡Cryptography
💡Public Key Infrastructure (PKI)
💡Asymmetric Cryptography
💡Data Breach
💡Proof of Work
💡Proof of Stake
💡Digital Signature
💡Cryptographic Hash
Highlights
The fourth principle of blockchain is security, which includes safety measures without a single point of failure.
Blockchain provides confidentiality, authenticity, and non-repudiation to all activity.
Non-repudiation means the authenticity of records, such as digital signatures, cannot be denied.
Participation in the blockchain requires the use of cryptography, with no option to opt out.
Reckless behavior on the blockchain only affects the person who behaved recklessly, not the entire network.
Blockchain addresses the lack of online security brought by the internet, such as hacking, identity theft, and fraud.
Most people rely on weak passwords for email and online accounts due to lack of stronger alternatives.
Financial firms were major contributors to identity thefts in 2008, but by 2014, the sector saw a significant drop.
The cost of a data breach is nearly four million dollars, according to IBM.
Medical identity fraud can cost individuals close to thirteen thousand five hundred dollars.
Blockchain's breakthrough is its ability to make transactions hack-proof using public key infrastructure (PKI).
Satoshi required participants to use PKI for a secure platform, which is now the largest civilian deployment of PKI.
Asymmetric cryptography, invented in the 1970s, gained traction in the 1990s for email encryption.
Digital certificates are an alternative to PKI but are not widely supported by common email services.
Blockchains like Bitcoin solve privacy and security issues by incentivizing the adoption of PKI for transactions.
Digital currency is represented by transactions indicated by a cryptographic hash.
The Bitcoin blockchain runs on SHA-256, an algorithm accepted as a U.S. federal information processing standard.
Proof of work is the process of earning new Bitcoin by solving a puzzle, which requires significant computational power.
As a blockchain gets longer, it becomes increasingly secure and difficult to hack.
Blockchain security measures have implications for personal and technological security in the digital age.
Transcripts
foreign
[Music]
design principles underlying blockchain
our fourth principle is security
the blockchain network incorporates
safety measures with no single point of
failure
they provide not only confidentiality
but authenticity and non-repudiation to
all activity
by non-repudiation we mean the
authenticity of Records like a digital
signature can't be denied anyone who
wants to participate in the blockchain
must use cryptography you can't opt out
and because of how it's set up any
Reckless Behavior doesn't endanger
everyone it only affects the person who
behaved recklessly
the problem this solves is lacks online
security you ever heard of that
the invention of the internet brought a
variety of new security risks to people
hacking
identity theft fraud cyber bullying
phishing spam malware ransomware and so
on people institutions and economic
activity have become more accessible but
less secure
most people rely on flimsy passwords to
protect their email or online accounts
because service providers and employers
don't insist on anything stronger and I
know the name of your dog
the typical bank doesn't specialize in
developing secure technology it
specializes in financial innovation
in 2008 the year Satoshi published his
white paper on bitcoin data breaches
that Financial firms like bny Mellon
Countrywide and GE Money accounted for
over 50 percent of all identity thefts
reported that year
by 2014 financial sector identity thefts
had fallen to 5.5 percent that sounds
like good news but it isn't breaches in
medical and Health Care jump to 42
percent of the years total
the average cost of a data breach is
nearly four million dollars according to
IBM
that means data breaches have cost at
least one and a half billion dollars
over the last two years alone
the average cost to an individual of
medical identity fraud is close to
thirteen thousand five hundred dollars
and offenses are on the rise
consumers don't know which aspect of
their life will be hacked next it's the
next stage of the digital Revolution
involves communicating money directly
between parties
then Communications and transactions
need to be hack proof using public key
infrastructure from the start makes a
long blockchain almost impossible to
hack
that's the blockchain's Breakthrough
Satoshi required participants to use
public key infrastructure or pki to
establish a secure platform
pki is an advanced form of asymmetric
cryptography where users get two keys
the two keys don't perform the the same
function one is for encryption and the
other is for decryption the Bitcoin
blockchain is now the largest civilian
deployment of pki in the world
only the U.S Department of Defense uses
it more widely asymmetric cryptography
was invented in the 1970s and it gained
some Traction in the 1990s in Email
encryption freeware such as pretty good
privacy or pgp pretty good privacy is
pretty secure but it's also pretty much
a hassle to use everyone in your network
needs to be using it you have to keep
track of your own two keys and you have
to keep track of everyone else's public
key
there's no password reset function if
you forget yours you have to start all
over
digital certificates are another
solution they're pieces of code
protecting messages without the encrypt
decrypt operations but users apply and
pay an annual fee for their individual
certificates again the most common email
Services don't support them so you won't
have the encryption you're paying for
when you write to someone using Gmail or
Outlook
which is a lot of people
people still lack incentives to protect
their privacy and their daily routines
blockchains like Bitcoin solve nearly
all of these problems by providing the
incentive for wide adoption of pki for
all transactions and value
not only through the use of Bitcoin but
also in the shared Bitcoin protocols
there's no need to worry about weak
firewalls thieving employees or
Insurance hackers
if you and I are both using Bitcoin we
can store and exchange Bitcoin securely
if we can do that then we can store and
exchange highly confidential information
and many other digital assets securely
as well
now here's how it works digital currency
isn't stored in a file per se
it's represented by transactions
indicated by a cryptographic hash
users hold their crypto keys to their
own money and transact directly with
each other
every user is responsible for keeping
his own private Keys private
security standards matter the Bitcoin
blockchain runs on what's called Shaw
256 a well-known and established
algorithm published by the U.S National
Institute of Standards and Technology
nist
it's accepted as a U.S federal
information processing standard it's
extremely difficult to make the many
calculations required to find a block
solution and computers have to chew
through a lot of electricity to do it
but when they do they solve the puzzle
and earn new Bitcoin and this effort is
called proof of work
other algorithms such as proof of stake
burn much less energy but some experts
find it suspect crypto expert Austin
Hill calls proof of stake a system where
the rich get richer where people who
have tokens get to decide what the
consensus is
so you could argue that proof of work on
the other hand is based on physics
instead of wealth and is therefore more
egalitarian
finally as a blockchain gets longer and
longer it also gets safer and safer
hacking a long chain requires
substantially more computing power than
attacking short chains
and a blockchain is a highly processed
thing the best analogy we've come up
with is it's like a chicken McNugget it
would be like turning a chicken McNugget
back into a chicken now someday some of
them will be able to do that but for now
that's going to be tough
so what are the implications of
blockchain security measures
these days technological security goes
hand in hand with personal security
today bits can pass through our
firewalls and wallets
these can pick our pockets or hijack our
cars from the other side of the world as
each of us relies more and more on
digital tools and platforms the threats
have multiplied
with the secure design and transparency
of a blockchain like Bitcoin we can make
transactions of value and we can protect
our data
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