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The State of Blockchain’s Trust and Transparency in Economy

We now live in a digital age. Everything around us is always changing, and Blockchain technology is one of the most significant developments now occurring on the planet. Blockchain is a large platform for establishing peer-to-peer communications between people all over the world. In fact, we’re dealing with a database that’s shared across multiple computers with this infrastructure. On this network, there is no centralized surveillance from a foundation or individual. However, hackers can get into it because of the security and transparency of its construction. All financial and non-financial transactions are entirely visible, safe, and irreversible thanks to Blockchain’s many security algorithms.

Security Algorithmof Blockchain 

Since the birth of the Blockchain network, there has been continual discussion about a network in which all transactions and activities are meticulously recorded and all users can see what is going on in this database. Because the Blockchain network has no central surveillance, users should double-check their transactions. To keep the security of Blockchain transactions, we’ll need algorithms. “Consensus algorithms” refer to the algorithms that ensure transaction security and transparency. Two examples of consensus algorithms or security algorithms in the Blockchain network will be discussed in the following sections:

The POW Algorithm

The proof-of-work (POW) algorithm was the first security method created for the Blockchain system. This algorithm is one of the most important components of the cryptocurrency mining process, as it allows miners to confirm blocks or registered information on the Blockchain network, and collect rewards by decrypting transaction encryption. Miners compete with one another to decrypt the network’s transactions in order to receive their reward, which is usually a set amount of cryptocurrency. Not all miners are capable of running the POW algorithm and properly decrypting the transactions that have occurred. As a result, the Blockchain network’s security is mostly guaranteed, and the risk of hacker attacks is reduced. In fact, you must decode each transaction in order to confirm it, and you will receive a set quantity of cryptocurrency in exchange for this confirmation and decryption. The POW algorithm is the name for this procedure.

The Proof -of-Stake (POS) Algorithm

The “POS algorithm” is another algorithm that contributes to the Blockchain network’s function clarity, transparency, and security. Proof-of-stake is abbreviated as POS. The aforementioned algorithm was built to replace the POW algorithm, and unlike the previous approach, it does not require the decryption of transactions or the mining of cryptocurrencies. People can sometimes appear as block makers rather than miners in the Blockchain. To put it another way, they’ve entered a set of data into the Blockchain database. On this case, they must give assets that demonstrate their willingness to work in the Blockchain, according to the POS security algorithm. POS is about putting assets down as guarantee for the health and authenticity of actions in the Blockchain, and this method reduces the probability of bad acts by fraudsters, scammers, and hackers in the network.

Transparency and security

Because of the availability of consensus algorithms in the Blockchain network, people’s transactions on this platform are more secure and transparent. In addition to these features, Blockchain technology employs a variety of highly complicated mathematical procedures to assure network security. On the other hand, the lack of management centralization in the Blockchain infrastructure, as well as the dispersion of payment information and data transfer among users, has given the Blockchain ecosystem such transparency that it presently has no competition.

Written by Pooyan Ghamari

Founder of Counos Platform

Other projects;

Counos Exchange

Xbit Project

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