The Security of Your Investment When Using Blockchain Technology

  • February 16, 2022

We all know a bit or more about Bitcoin. While Bitcoin is a household term and blockchain is ready to enter every possible industry, there are problems facing blockchain adoption. Let’s see what challenges are holding back blockchain mass adoption, and how to overcome them?

What Is Blockchain?

Blockchain technology is the system, and bitcoin or any cryptocurrency is a product that runs on that system.

Blockchain’s main component is a chain of blocks that store data in time order, a new form of old Distributed Ledger Technology (DLT), which means this chain is not stored in one central device but every device running a node connected to the blockchain.

In other words, a blockchain is a network of nodes, formed from devices connected to that blockchain using the software. Nodes role is to validate every transaction or exchange of data that occurs within the blockchain. Additionally, blockchains allow anyone to create and operate a node, making blockchain a decentralized and transparent system.

Blockchain is not limited to cryptocurrencies but includes the development of tokens, documents, videos, pictures, and many forms of data.

The blockchain makes it hard for hackers to forge transactions because to alter one transaction, they will not only have to change the relevant block stored in every node in the blockchain separately but also the succeeding blocks.

Possible Problems with Blockchain Technology

Then, what could go wrong? Let’s find out the weaknesses!

Transparency – There has been a lot of discussion over the integration of blockchain technology in supply chains. It looks like a great idea! After all, making supply chains transparent can provide the closure everyone needs to make ethical choices.

Scalability – The larger a blockchain grows, the more vulnerable it gets. The redundancy of blockchains makes them hard to scale.

Security –  Possible weakness: nodes access, stake control, proof of identity, 51% attack.

Regulation – Decentralization of authority means no one has the power to enforce law and order in the network. However, some countries try to control it.

Each section has possible solution, some of them being applied to the Reitis project.

 

1. Too Much Transparency?

Public blockchain in a commercial environment isn’t always a good idea. Why? Because if a supply chain becomes transparent, so might be the data of all the customers and partners dealing with that business. When working in a commercial environment, complete transparency isn’t ideal, as it allows the participants to see what each member is doing in real-time. Just like customers wouldn’t want all the businesses involved in supply chains getting any of their data, a business wouldn’t want their competition getting a whiff of their intellectual property, secrets, and strategies.

1.1 Solution by Reitis

As we aim to become the actual Real Estate Corporation of People (RECoP), we have nothing to hide to the token holders who will become shareholders in the Company. And, as we are on blockchain, if you are a XREI token holder, nothing more than your address will be publicly published on explorer.

 

2. Scalability for Businesses

If you have a business on a private blockchain, every device in your network must have a copy of every transaction made. And even if you have all the digital, software, and hardware needs met, it will be almost impossible to regulate your blockchain.

2.1 Solution by Reitis

DeFi Binance Smart Chain solution, no need of KYC for XREI token buyers and holders. Also, construction and real estate development business is crypto regulated in Estonia for the entire Europe.

 

3. Possible Security Breaches

3.1 Nodes Access

One possible weakness: if hackers want to access data shared within an exclusive blockchain, they only need access to one node in it. It may be nearly impossible to forge a transaction in a blockchain, but it is quite possible to get a fraudulent transaction approved.

3.1.1 Solution by Reitis

To avoid nodes problems and for high security we will not crete standard RPC (remote procedure call) nodes, but the Web3 operating system named Moralis, which provides managed backend for blockchain projects. Automatically syncing the balances of your users into the database, allowing you to set up on-chain alerts, watch smart contract events, build indexes, and so much more. All features are accessed through an easy-to-use SDK. Moralis provides a number of ways for XREI token data security: class-level permissions, ACLs (to make sure that only the user who owns the data can read it). Together, we can make the web a safer place!

 

3.2 Possible Control of the Stake

This one concerns the stakeholders in a blockchain. The weight of your vote is directly proportional to the stake you hold in a blockchain. That means if you own a majority of the assets in a blockchain, you rule. If a group of people buys more than 50 percent of the assets in a blockchain, they control the blockchain.

3.2.1 Solution by Reitis

Anti inflation and anti bump and dump distribution system.

 

3.3 Proof of Identity Risk

Blockchains are somewhat democratic by using different methods of voting to reach a consensus. In this case, each node that has an identity gets a vote and majority wins! There are issues with Proof of Identity consensus algorithms, such as minorities being sidelined or manipulating smaller blockchain networks. It’s easier for groups of criminals to enter a blockchain with many different devices, consequently buying more votes for themselves. Once they form a majority, they can get any transaction approved.

3.3.1 Solution by Reitis

Anti whales and anti bump and dump distribution system.

 

3.4 A 51% Attack

Both the Proof of Identity and the Proof of Stake methods can succumb to a 51 percent attack.

3.4.1 Recommended Solution by Reitis

We at Reitis don’t believe the solution to the problem lies in the technology alone. Rather, how we form communities in our lives. More diverse a blockchain network would be, the safer it would be. Getting everyone, even our mothers, and grandmothers, on the network is essential. We believe in the future that decentralisation holds, and we are making the decentralisation diversified.

 

4. Regulation

Decentralization of authority means no one has the power to enforce law and order in the network. No moderators, no leaders, not even a regulatory body!

Some countries don’t allow blockchain transactios. For example, citizens from the following countries are not allowed to participate in the IDOs: Bolivia, Cambodia, Iran, Iraq, Libya, Nepal, Zimbabwe, Liberia, Myanmar, North Korea.

 

Conclusion: To Be or Not to Be on Blockchain?

Anyone should be careful when being approached by enthusiastic developers and business owners who are strongly biased by the hype. We offer an applications that deals with real and digital services and this require trust not trustless unrealistic paradigm.

Trustless is a wrong used word (read any dictionary to see its real definition!), introduced in crypto literature by people who do not care about its real meaning. If you cannot trust your brothers or friends, then better go, and live on another planet!

Of course, you do not have to trust your corrupt government, bankers or press vendetta, but you must have a few people you like them for who they are and trust what they say and what they do! No trust, no humanity, no normal behaviour of human beings.

In conclusion, blockchain is the future, so be on it but have few rules to respect, and the most important are:
– Never trust anyone telling you that a coin will provide “guaranteed returns”;
– Cryptos and tokens are always volatile and speculative, as any financial product is;
– Check what the people say about the project on the social networks;
– Check the liquidity on the blockchain;
– Check if the coin or token is listed on a reputable exchange or about to be listed;
– Listen to your instinct: isn’t it too beautiful to be true?
– If decided to join, do you own research, learn it well and go on, the future is yours!

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