Episode 3: Is Blockchain Secure?

So, now that you understand the concept of a distributed ledger or a decentralized ledger that there is this data out here that there are many many many copies of to verify. The next thing to talk about, it’s security with blockchain technology. How do you know that a record or something that’s on that ledger is from me and not from someone that is pretending to be me? That’s where we’re going to get into asymmetric cryptography or public key or paired key cryptography. That’s gonna be broken down into two parts. A public key, which is public you can disseminated it you can put it out to the world and say hey this is mine. And a private key. If you think about in terms of like your house, everyone can know where your house is you can give your address out. And in fact in bitcoin you have a bitcoin address that’s derived from your public key. And people can send you bitcoins to that address just like people could send you mail to your house. But actually to get inside of your house you’re gonna need a private key which is the other part of that keychain which would be what actually unlocks the door. And on bitcoin that’s how you would send bitcoins out into the world. In bitcoin you can think about it that if a coin is coming from an address that someone has said, “this is my public address.” If you see stuff moving out of that that you know that they signed it that they actually used their private key to send that out. In terms of bitcoin that’s using bitcoins and sending money back and forth and in that monetary sense. 

But, in terms of blockchain at large, it doesn’t have to be money. It could just be information. You could sign something and people can say, “hey this is coming from my public address.” But, the fact that you’re sending data out that was signed by your private key lets everybody know emphatically that it was yours in a way that’s very, very difficult to counterfeit.

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