Principle 4 Security

Summary

This 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.