Tamper-proofing is an essential safety and security feature for many industries, such as the pharmaceutical and food sectors. "Tamper proof" refers to anything designed to hinder, detect, or prevent unauthorized access. For example, tamper-proof screws are only compatible with special tools, preventing people from removing them with traditional drills and screwdrivers.
Likewise, tamper-proof distributed ledgers prevent bad actors from altering transaction data. All distributed ledgers are immutable and, in theory, are tamper proof. However, most aren't entirely safe from tampering.
This article will discuss the importance of tamper-proof ledgers in today's tech world, how they work, and their potential vulnerabilities.
What is a tamper-proof ledger?
Distributed ledgers achieve tamper-proofing through various means. Bitcoin was the first blockchain network to use a consensus mechanism. Consensus is reached when all node operators submit the same blockchain record as they add new blocks. If a node operator tampers with transaction data, their record won't match the other nodes and they will be excluded from the network. This novel concept is still used in nearly every blockchain distributed ledger.
Data stored in distributed ledgers is immutable, meaning it can't be changed. Many advocates of distributed ledger technology (DLT) highlight immutability as the most critical DLT feature. Each DLT is a decentralized network of nodes that validate and maintain transaction records. Unlike credit card companies, DLTs don't have a single point of failure, because the transaction data isn't controlled by a single entity.
Blockchain technology also incorporates cryptographic security to protect against tampering. Each network message is encrypted, and hashes ensure accurate transaction information before storing new data on the blockchain. Hashing is a cryptographic concept in which inputs of various lengths are used to create encrypted outputs with fixed lengths. Miners use the hash from the previous block as input to try to solve the hash of the next block.
It's important to note that blockchain ledgers aren't the only tamper-proof DLTs. Directed acyclic graph (DAG) DLTs reach consensus faster than blockchain networks. When a DAG node becomes aware of new information, it shares that information with a random node, then each of those two nodes shares the data with two more new nodes. This process continues until consensus is achieved.
Why are tamper-proof ledgers important?
DLTs are used in various ways, many of which are central to people's lives. For example, DLTs are used to track pharmaceutical supply chain data, vaccine records, real estate transactions, and more. If bad actors alter a ledger's transaction history, it could have dire consequences for those who use it.
Distributed ledgers, combined with smart contracts, have the potential to enhance the operation of governmental and corporate institutions. These technologies could be used for voting, collecting taxes, issuing passports, and other applications requiring data storage and security. However, for this to be possible, people must be able to trust that the stored data can't be altered.
Tamper-proof ledgers can offer more trust and transparency than the traditional banking system. Secure DLTs let all parties view and verify transaction details with the peace of mind that there is no fraud or manipulation. This transparency leads to greater trust and less friction.
Tamper-proof ledger vulnerabilities
Even the best tamper-proof ledgers have inherent weaknesses. Decentralized consensus mechanisms are vulnerable to “51% attacks,” a scheme in which miners gain control of a ledger's transaction history. For this attack to be successful, miners must control at least 51% of the network hash rate. Miners with complete network control can block or reverse transactions, allowing them to double-spend cryptocurrencies.
Luckily, 51% attacks are incredibly cost-prohibitive. For example, according to Investopedia, miners would need around $9 billion worth of ETH for a successful 51% attack on the Ethereum network. A similar report from Cointelegraph suggests miners would need roughly $10 billion worth of mining equipment for a successful 51% attack on the Bitcoin network. Still, according to Hashgraph's inventor, Dr. Leemon Baird, nearly all DLTs are also susceptible to “34% attacks.” This attack becomes possible when an entity controls 34% of a network's nodes and splits the remaining 66% using a firewall.
For a tamper-proof ledger to achieve the highest possible level of security, it must be asynchronous Byzantine Fault Tolerant (ABFT). ABFT ledgers allow for consensus, even if some messages from honest nodes never reach their intended recipients. Hedera was the first DLT with computer-verified mathematical proof that it is ABFT.
How do tamper-proof ledgers work?
Adding new data to a tamper-proof ledger is a multi-step process. First, the data is submitted to the network and verified by a group of nodes. These nodes, also known as validators or miners, check the validity of the data with complex algorithms. If the data complies with the network's rules and protocols and is deemed valid, it is added to the ledger as a new block.
Consensus mechanisms play a crucial role in maintaining the integrity of tamper-proof ledgers. There are several consensus mechanisms used in tamper-proof ledgers, including proof of work (PoW), proof of stake (PoS), and delegated proof of stake (DPoS). These mechanisms ensure that all nodes agree on the same version of the ledger.
PoW mechanisms rely on miners using powerful computers to solve mathematical equations. PoS mechanisms use deterministic algorithms incorporating users' staked token balances, coin age, and other criteria to select validators. In DPoS systems, users elect block producers by voting with their token balance.
Go tamper proof with Hedera
Tamper-proof ledgers offer enhanced security and transparency for a variety of industries. These ledgers use cryptographic security, decentralization, and consensus mechanisms to ensure data security. DLTs are immutable, meaning stored data can't be altered after it's added to the ledger. However, no DLT can be entirely tamper-proof, as they are all susceptible to 34% attacks.
The Hedera network offers high throughput, low transaction fees, and top-notch security. Hedera is ABFT, meaning it has the highest possible level of DLT security. Additionally, the Hedera Consensus Service makes it easy for developers to create decentralized applications that are inherently tamper-proof. Developers can use a variety of common coding languages to build tamper-proof dApps on the Hedera network.