With the increasing adoption of blockchain technology, the security concerns with the blockchain are also increasing. Thus, the interest of individuals in understanding blockchain security algorithms is also growing simultaneously. If you are also aspiring to learn more about which algorithms are used in blockchain for security, you have reached the right place.

Blockchain is quite a complicated concept in technology, especially with its various advantages dictating its popularity. It offers the assurance of a highly secure, distributed, and transparent exchange of information or money between two parties. However, many people have doubts regarding the ways in which blockchain ensures security for all participants. 

This is where you need to look at algorithms used for blockchain security. Blockchain depends on cryptography and consensus mechanisms along with other algorithms for establishing strong security. The following discussion takes you into an outline of the top algorithms in blockchain used for security.

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List of Top Blockchain Security Algorithms 

Blockchain is actually a distributed structure that allows data storage in a digital ledger. The digital ledger documents all the groups of valid transactions into blocks and arranges them in a sequential chain. New blocks of transactions are added to the blockchain through hashing in cryptography. So, what is cryptography, and why is it important for blockchain security? We’ll learn about cryptography algorithms in the next section along with the other blockchain security algorithms. Let’s dive in!

1. Cryptography Algorithms

Blockchain is a constantly growing collection of records, and new blocks are added to the list continuously. As the network grows bigger, it will be difficult to ensure that all the information on the blockchain is secure from any unwanted threats. Cryptography is one of the fundamental requirements in the blockchain. 

It offers the platform for tailoring protocols and techniques to avoid third-party interference in accessing and procuring information regarding data in private messages over the course of a communication process. The objective of a cryptography algorithm prevents any third party from eavesdropping on private communications over a blockchain network. Before reflecting further on cryptography algorithms for blockchain security, let us take a brief overview of the origins of cryptography. 

Cryptography can be traced back to ancient times when a cipher was used for transmitting messages. With a specific system for creating coded messages and deciphering them, cryptography was popular in ancient Egypt as well as the Roman Empire. However, the most modern origins of cryptography algorithms refer to the Vigenere cipher of the 16th century. The most popular example of the use of cryptography refers to the case of the Enigma Machine used by Germans. 

It was used during World War 2 and had the capability to generate ciphertexts that could not be decrypted through analysis of letter frequency. Over the years, many new cryptography algorithms, such as the Advanced Encryption Standard algorithm, presented applications for different use cases. Now, it is reasonable to wonder about the type of blockchain algorithm you have for cryptography. 

The two most common types of algorithms used for security on blockchain include digital signatures and hashing. 

Also Read: How does blockchain use public key cryptography?

Digital Signatures

Digital signatures are the perfect examples of an asymmetric-key cryptography algorithm. Generally, blockchain transactions require digital signatures, mostly as a private key. When a user enters their private key for a specific transaction, it can encrypt the transaction. The recipient could decrypt the transaction by using the public key provided by the sender. 

Digital signatures are popular algorithms for blockchain security as they involve the association of a key pair through cryptography. The advantage of digital signatures as an algorithm for safeguarding security on the blockchain is the additional layer of security. Since users must also transmit the key along with the transaction, the key needs an additional layer for security.

Read Now: Hashing and Digital Signature in Blockchain


It is important to note that blockchains depend considerably on hashing as a cryptographic algorithm. Hashing can help in the conversion of almost any type of data into a character string. Apart from ensuring the value of security through encryption, hashing also offers a highly efficient store of data. 

It is reasonable to wonder about the effectiveness of cryptographic hashing algorithms as the best feature for security on the blockchain. However, the traits of hashing algorithms can showcase more of their effectiveness. Here are some of the traits of hashing algorithms that showcase their efficiency in safeguarding blockchain security.

  • The same input always generates the same output with a hashing algorithm. Irrespective of the frequency of passing data through the hashing algorithm, it can always create the same hash consistently with the same characters in the string. 
  • Any changes in the input could produce completely different outputs with hashing algorithms. The slightest modification of changing the case of a specific character in a data set could result in a completely different hash. 
  • Hashing algorithms do not allow the opportunity to calculate or deducing the input on the basis of output. It is important to note that there is absolutely no way for reversing the hashing process to view the original data set. 
  • Finally, hashing algorithms present a unique advantage for blockchain security with faster speed. The process for hash creation should be fast while avoiding the intensive use of computing resources.        

Hashing is undoubtedly the best algorithm used in blockchain. The demand for cryptographic hashing algorithms is quite high across various blockchain applications. The common cryptographic hashing algorithm refers to the SHA256 algorithm, capable of generating a 32-byte hash. However, new, faster, and lighter hashing algorithms are emerging with promising implications for various use cases. 

2. Peer-to-Peer Network Protocols

Now that you know about the essential blockchain algorithms for cryptography let us take a look at other alternatives. The peer-to-peer network algorithms are great choices for large corporations. In the case of large organizations, single, centralized devices store massive volumes of personal data or users. 

Therefore, it clearly shows a single point of failure in the event of any security threat, mismanagement, or loss of data. Blockchain resolves the problem of a single point of failure, thereby contributing profoundly to security. The structure of blockchain empowers nodes in the blockchain system for verifying the authenticity of transactions rather than a third party. 

The peer-to-peer network algorithm is not exactly the answer to “Which algorithm is popularly used for security in blockchain?” as it is basically an operating model for blockchain networks. Each node in the blockchain network receives information about transactions between clients. A peer-to-peer network algorithm ensures that each node can verify the credibility of transactions before their documentation as blocks on the network. 

The algorithm also implies a review of past transactions of the sender to identify concerns of double-spending. Peer-to-peer network algorithms can accept agreement protocols from miners and reach agreements on the order and sum of different transactions. After verification, a transaction is spread throughout the blockchain in the form of a block. So, the peer-to-peer network algorithm takes away the need for depending on any central authority, thereby offering expanded scope for security. 

Read Now: Common Security Issues in Blockchain

3. Zero-Knowledge Proofs

Another notable example of a blockchain algorithm employed for security on blockchain networks refers to Zero-Knowledge Proofs (ZKPs). Zero-knowledge proof actually serves as a consensual decision-making process and allows one party to confirm the authenticity of information to another party. The efficiency of ZKP algorithms largely focuses on the fact that the ‘prover’ doesn’t have to disclose any information. 

ZKP delivers better security by making the perfect use of cryptographic techniques to ensure that the prover doesn’t have to disclose information about the transaction. On the other hand, the other party can know that the information in possession of the prover is true. As a result, ZKP algorithms can safeguard the decentralized nature of blockchain while preventing any disclosures about the transaction. 

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4. Consensus Algorithms

Blockchain allocates power to the network participants. The majority of network participants have to reach an agreement on a specific transaction before adding it to a block. In this case, consensus algorithms offer the functionality of reaching an agreement of a specific data value throughout distributed systems and processes. 

Consensus algorithms are the most commonly preferred algorithms for blockchain security. They help different participants on the blockchain network in arriving at a consensus or common agreement regarding the existing data state in the ledger. At the same time, consensus algorithms also help in deriving agreements for trusting unknown peers in distributed computing environments. 

Consensus algorithms are an integral part of blockchain networks as they help in maintaining the integrity and security of distributed computing systems. Let us find out more about the different types of consensus algorithms and how they support security on the blockchain. 

Proof of Work Consensus Algorithm

Proof of Work (PoW) is the creation of a cryptographic hash. Generally, it requires blockchain validators to take data from the block header as inputs. Then, the blockchain validators could run the input through a cryptographic hash function continuously. Validators ensure hashing of slight changes in input data through the inclusion of an arbitrary number, referred to as a nonce. 

The nonce is added with all iterations of running the input data through a cryptographic hash function. PoW algorithm used in blockchain requires higher processing power for determining the addition of data in the next block. Therefore, you may need specialized computers such as ASICs for computing complex mathematical problems required in PoW systems. 

Proof of Stake Consensus Algorithm

The Proof of Stake or PoS algorithm emerged as an alternative for PoW. Therefore, it is reasonable to find similar objectives of PoS and PoW. However, both the consensus algorithms have certain fundamental differences and features, especially related to the validation for new blocks on the blockchain network. 

The Proof of Stake algorithm features a mechanism that enables the validation of blocks according to a stake of network participants. Rather than running hash functions, PoS algorithms for blockchain security involve staking resources in the form of tokens or digital currency. 

Subsequently, it involves the random selection of validators for all blocks from the stakeholders. The amount of computational power allocated to the stakeholders helps in determining the validators. Interestingly, every PoS system could ensure different ways for implementation of the algorithm. 

However, it basically involves a random selection process focused on a node’s allocation and the allocation for determining the commitment of parties in ensuring transaction. Ethereum blockchain utilizes the PoS algorithm for achieving better scalability and limited electricity usage.

Also Read: PoW vs PoS Consensus Algorithms

Delegated Proof-of-Stake Consensus Algorithm

The Delegated Proof of Stake or DPoS consensus algorithm leverages the concept of a voting system. In a DPoS system, delegates vote for desired validators for supporting the consensus state of new blocks. The validators also take care of validating transactions alongside maintenance of the blockchain network. 

At the same time, the delegates also receive incentives in the form of transaction fees. The DPoS blockchain algorithm is basically a democratized version of the PoS consensus algorithm. It can provide the advantages of managing higher transaction volume alongside faster confirmation times. 

Proof of Elapsed Time Consensus Algorithm

The Proof of Elapsed Time or PoET consensus algorithm had been tailored for solving challenges of random leader selection. As a part of the Software Guard Extensions or SGX programming reference manual, PoET has found applications across different private blockchains. It relies on the use of a randomized timer system rather than depending on mining hardware. Every participating node must wait for a specific time period, chosen randomly, and finishing the time could help in earning a new block and validating it. 

Aspiring to become an expert in blockchain security? Here’s a complete guide on How to Become Certified Blockchain Security Expert?

Bottom Line

On a final note, it is quite difficult to find out the best algorithms for blockchain security. Algorithms are tailored to solve specific problems by taking certain inputs into account. Cryptography algorithms such as digital signatures and hashing help in safeguarding information from third parties. Consensus algorithms help in ensuring the integrity of participants and transactions on a blockchain network. 

So, it is quite difficult to round up on a specific choice of algorithm to safeguard security on the blockchain. The other notable algorithms which come to attention when speaking of security on blockchain include zero-knowledge proofs and peer-to-peer network algorithms. While blockchain is inherently secure, immutable, and transparent, algorithms are essential for ensuring all these traits!