How secure is the blockchain?

The answer to this question depends on the circumstances. If you listen to some blockchain experts, the technology behind blockchain is going to secure the future of many industries and applications. For example, the technology is the source of IPFS (InterPlanetary File System, https://ipfs.io), a new and more secure internet protocol (replacing http).

It is already revolutionizing the banking industry by delivering secure identity communication and smart contracts (that is, programmable code deployed on the blockchain that act as a complement, or substitute, for legal contracts or complex business transactions), thereby reducing costs by requiring fewer back office employees. Furthermore, it creates distributed ledgers that guarantee the owner of properties. The building blocks are definitely there so that we can say the blockchain itself is secure. However, its security depends on how these building blocks are used by the application layer on top of it.

To explain the security risk inherent in blockchain technology, I will first need to explain the difference between a public and a private blockchain. Some security risks only need to be dealt with when setting up a public blockchain.