A last common characteristic of blockchains to make them more secure is the way in which new blocks of data are being validated. Because what if a hacker, Hans, got access to the blockchain and simply added a transaction, where Hans should now receive 10 ethereum from Anna?
If Hans were able to do so, it would appear as if Anna should transfer 10 ethereum to Hans.
And when Anna gets the bill, she may not even think about it if she were a milk wholesaler.
But that can’t happen. Because before any new transaction can be added to a blockchain it would first require that everyone in the blockchain network validates the transaction. This is also called a consensus mechanism.
So when one person validates the transaction, it’s added to their version of the blockchain. That version will then be forwarded in the network, where the next person would have to validate the transaction in their version of the blockchain.
The idea of a blockchain rests on the fact that the network is honest. Because sooner or later, an honest person in the network will be able to tell that the transaction between Anna and Hans is faulty, and they would then remove the transaction from their version of the blockchain. That version is then forwarded further in the network, and provided that the network is honest, they would prioritise forwarding the honest version instead of the faulty version that Hans sent out.
So in theory, it’s possible for Hans to trick the network – all it takes is that 51% of the network is dishonest and would prioritise Hans’ version of the blockchain.
But here, it needs to be clear that 1 participant in the network doesn’t equal 1 person, but depends more on computer power. It requires a certain amount of computing power to validate transactions, and one computer could be able to contribute 10 times as much as compared to other computers.
In that way, one person could be responsible for 2% of the network’s computing power, while another person is responsible for 0,1%. Theoretically speaking, a single person could then be responsible for more than 51% of the network’s computing power and trick the whole system single handedly. In practice, that’s quite difficult, as that amount of computing power would be very expensive.