Foundations of Blockchain

Risks of the security model

Ownership of a private key is sufficient to claim ownership of assets created and registered in the blockchain. Although private keys remove the burden of maintaining multiple documents to prove user's identity while performing a transaction, they increase the need for stringent security on the private key. Users cannot afford to lose their private key because it is the only proof of identity in the blockchain. This means that users have to secure their private keys, which are often stored in wallets. Users will have to secure the private key with some kind of encryption to protect it from attackers. However, there are some major risks of this system when compared to the traditional transaction model, these include: ...