Is Blockchain rellay secure
Blockchain Security: Is Blockchain Really Secure?
Digital data storage can be a tedious business, especially when?it comes to recording — and safeguarding — digital transactions or?sensitive medical information.?
A database with an essentially impenetrable?cybersecurity?structure would be pretty handy,?right? That’s the thought behind blockchain technology. You might compare the?database to a house of playing cards where if you tamper with one card, the?whole structure will tumble.?
That just grazes the surface of blockchain security. Another?facet of it is knowing the potential?cyberthreats?associated with blockchain?technology and how to manage those threats. We’re overviewing just that, plus?how blockchains are built to safeguard your?confidential data?and best practices for you to?level up your blockchain security.?
What?is blockchain?
A blockchain, also known as distributed ledger technology, is an?online database that’s popularly used for?cryptocurrency?transactions like Bitcoin. Hence?the name, the database stores digital information in blocks and in?chronological order. Once a block is full, it’s linked and locked to the rest?of the full blocks in the database, creating a chain. An empty block is then?added to the end of the chain to record new information.?
In simpler terms, you might think of blockchain technology like?a paper ledger book, which is used to record transactions. Once one page is?full, you must flip to the next blank page to continue recording information,?and so on. In the case of a blockchain, once a block is filled and locked into?the chain, that block can no longer be changed. It’s a permanent recording — at?least, that’s the thought.??
Of course, blockchain technologies can differ, especially when?it comes to who can access the data in each block. This means blockchain?security approaches differ, too.??
Different?types of blockchains to know
Blockchains tend to be categorized into two types: public or?private. Private blockchains are generally considered more secure than public?blockchains. And much of that is attributed to the ways users are permitted to?verify information that’s recorded in a blockchain.
Public?(and permissionless) blockchains
As the name indicates, public blockchains are public. They can?be joined by anyone with an internet connection, meaning they’re?permissionless, and all users are also anonymous. Each user is given a public?key — think of it like an ID badge — associated with their name that can be?traced back to their activity. Remember, blockchain activity is transparent to?all users.?
Blockchains also take a village to operate, as users must verify?or validate any information that’s added to a block. In the instance of public?blockchains, that’s through solving cryptographic problems.??
For instance, you’ve perhaps heard the term “mining” when it?comes to Bitcoin, which is among the most popular examples of blockchain?technology. Bitcoin users essentially must work, or “mine,” to verify that?their transaction is legitimate before it can be logged in a block. This can?require a lot of data, power, and time.??
Private?(and permissioned) blockchains
Private blockchains, on the other hand, require less work to?verify and record a piece of information in a block. That’s because only?permitted users are allowed to access a private blockchain, meaning they’re?permissioned blockchains.?
Given users are pre-vetted, any permissioned users can verify?and view?personal information?recorded in a private blockchain.?Think of it as a members-only club. Most often used by businesses or?organizations, private blockchains are considered more secure than public?blockchains since they involve more access control, yet they too can be?susceptible to cyber threats, especially from internal actors.??
Blockchain?risks to avoid?
Blockchain technology is sometimes touted as being tamper-less.?In reality, it’s susceptible to cyberthreats.?Consider the following blockchain?risks and security issues that can arise, including a few real-world examples of?when blockchains were compromised.??
Phishing?attacks
One of the oldest hacking attempts in the book,?phishing, is when a scammer tries to lure?sensitive information or?data from you by disguising themselves as a?trustworthy source. They use platforms like?text messages,?emails,?and even phone calls to do?it.??
These phishing messages might entice blockchain users to provide?their unique ID associated with a blockchain?account or encourage them to click?a link that gains access to a blockchain network.???
Code?exploitation
Code exploitation is when a blockchain user — or cybercriminal?acting as a blockchain user — identifies a weak?spot in a blockchain’s software?and exploits that weakness with malicious intent.??
An example of this took place in 2016. A?hacker swiped more than $50 million?from a venture?capital fund known?as a decentralized autonomous organization by way of code?exploitation.?
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Routing?attacks
Routing attacks can come in a few forms, with the most common?being?denial of service attacks?and?man-in-the- middle attacks. In both instances,?cybercriminals stealthily intercept data as it’s transferred across a network,?usually a weak?Wi-Fi network.?
In the instance of blockchain of technology,?cybercriminals essentially lurk on a weak network when a?permissioned?blockchain user is on. The?permissioned user has no idea the information they’re adding to a?blockchain or?verifying in a blockchain is being monitored and potentially compromised.???
Stolen?keys
Remember how every blockchain user is granted a unique?identifier — kind of like an ID badge — to enter a?blockchain network? Those?are also known as private keys and, yes, they can be stolen. When in the wrong?hands, a cybercriminal can attempt to alter information in a blockchain under a permissioned user’s key.??
An instance of this was seen in 2021 when?$140 million?worth of?Bitcoin was stolen from crypto users. Authorities?in charge of the?investigation pointed to stolen keys as the source of the theft.??
Sybil?attacks
The “Sybil” in Sybil attack stems from a fictional book?character with dissociative identity disorder. To that tune,?Sybil attacks are?when cybercriminals overwhelm a network with login attempts or false?credentials?and cause?them to crash.??
This can give cybercriminals free rein over a compromised?blockchain network.?
Computer?hackings
Blockchain technology might seem advanced, but it’s no less?vulnerable to good ’ole computer hacks — even in?the form of a malicious?individual sitting right in your computer chair and accessing a blockchain?network you’ve?been granted permission to.??
In October 2021,?$16 million?was stolen?from England-based cryptocurrency platform Indexed Finance, with an 18?year-old?hacking prodigy as the main culprit.??
51%?Attacks
This blockchain security threat is mostly applicable to Bitcoin,?which is built on mining, or solving cryptographic problems to validate?transactions added to a block. Bitcoin users can essentially commandeer a?Bitcoin network if they’re able to control more than 50% of the computing power?of a blockchain.??
In other words, this would require a group of Bitcoin users to?be mining at the same time and with the intent of excluding new transactions?being added to the blockchain. It’s a very unlikely scenario.???
How?to improve your blockchain security?
Given that blockchain security issues indeed?exist, individuals and businesses alike should build up their blockchain?security infrastructure from the inside out to protect their blockchain?activity.?
And that’s all about understanding the cyberthreats associated?with blockchain technology — and how to manage them. Adhering to cybersecurity?best practices can go a long way in protecting our data stored in blockchain?networks, too.?
To that?end, consider putting the following measures in place to level up your?individual blockchain security:??????
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