How blockchain enhances transaction security

Large-scale organisations have built robust technology infrastructure over the years. Many have adopted hundreds of SaaS solutions, developer and database management tools, web servers, and more. 

Yet, even with so many tools in place—all at various levels of implementation and integration—there is ample room to improve existing tech stacks and reassess how they deliver value. Blockchain could fit into that gap and improve security in business transactions. 

Fewer mediators, more participants

In the realm of digital transactions, where centralisation and intermediaries have historically been the norm, blockchain represents a progressive transformation. It democratises trust, shifting reliance from traditional client-server models towards a cooperative network of nodes bound by transparent algorithms. By reducing the mediators and engaging more participants, blockchain crafts a system where security is not an institutional responsibility but a collective attribute. 

The essence of blockchain's security lies in its design. Distributing the ledger across multiple participants, each one is able to validate and maintain a copy, practically eliminating the risk of individual manipulation. This level of transparency ensures that any block alteration becomes immediately apparent and is highly resistant to unauthorised changes. 

Its utilisation of hashing ensures uniqueness of transactions. Altering one would cascade changes, necessitating the rehashing of all following blocks. With their unaltered copies, other nodes would not achieve consensus with this tampered version. Also, the asymmetric encryption powered with public and private keys and the decentralised consensus reached through complex algorithms instill a sense of democratic control over transaction validation. This signals a future where security is algorithmically mediated and democratically validated.

Yet, as innovative as these foundational elements are, the digital landscape continues to evolve, and so do the requirements for security and efficiency. 

Elevating security, matching evolving needs

Looking at the blockchain maturity and adoption curve, we are now in the phase of implementation and expansion. We should expect rapid advancements and standardisation in this phase as businesses across different industries adopt it faster. 

With full deployment and adoption also comes the ability for different blockchains and even the traditional systems we use today to work in a unified system. It means using APIs instead of complex deployments every time, having rigorous security protocols, and following some developing standards. This will scale up blockchain as a business-usable product for creating and running more improved and mainstream applications.

With the introduction of account abstraction or ERC4337, the flexibility of transactions increases, allowing users to tailor the rules of their transactions to fit their needs. This flexibility can enable advanced features and sophisticated security measures like social recovery and two-factor authentication, which were impossible with earlier generations.  

Privacy–the perennial challenge in digital transactions–is finding its remedy in the form of zero-knowledge proofs (ZKPs). A breakthrough in cryptographic innovation, ZKPs permit the secure interchange of essential values without revealing sensitive details. Applicable across diverse industries, from healthcare to finance, ZKPs are paving the way for confidential data exchanges that once seemed unattainable within blockchains.

Together, these advancements are painting a future where transactional integrity isn't just an expectation but an algorithmically engineered reality. 

Drive for change 

Securing a system is only half the battle. The real triumph lies in integrating that security without compromising flexibility, efficiency, or inflating maintenance costs. Only then can we harness the maximum extractable value, ensuring our transition to blockchain is secure and strategically sound.

The author is Co-founder and CEO of Zeeve, a blockchain SaaS startup.