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Blockchain Security – better but not infallible

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As we move towards a decentralized and modern digitalized world, we are being introduced to many wonderful technologies and architecture that support this infrastructure…

One such technology is Blockchain.

A blockchain is a distributed database or ledger that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in a digital format (Hayes, 2022) [1].

One of the biggest implementations of a blockchain is cryptocurrency. The records are stored on a distributed, public ledger and everyone who is part of the network has a copy of this ledger.

The ledger is updated for everyone every time there is a legitimate transaction on one of the network nodes.

“Everything will be tokenized and
Connected by a blockchain one day”

– Fred Ehrsam

However, the very nature of the blockchain – that it is open and decentralized – also makes it vulnerable to attack.

There have been several high-profile hacks and scams in the past, and as the blockchain grows in popularity, so too will the incentive for criminals to target it.

That’s why blockchain security is so important…

By understanding the risks and implementing the right security measures, we can protect the blockchain from attack and ensure that it remains a safe and secure platform for everyone.

In this article, we will look at some of the most important security considerations for blockchain technology.

We will also discuss how to use the blockchain safely and securely, and what the future holds for this innovative technology.

Security Measures

Blockchain security refers to the security of a blockchain network…
This is accomplished through a variety of mechanisms, including cryptography, distributed ledger technology, and consensus algorithms.

Before we start getting into the details of blockchain security, we need to understand that there are basically two types of blockchains – public and private.

Blockchain networks can be private or public, depending on the privileges required for membership. The means for participants to acquire access to the network, on the other hand, are governed by whether the blockchain network is permissioned or permissionless (Shah, 2022) [2].

Public blockchains are open to anyone who wishes to enter, and it maintains the anonymity of all their users.
Private blockchains usually only allow people that are familiar with the organization that hosts the blockchain.

Blockchain networks are designed to be resistant to attacks. The distributed nature of the ledger makes it difficult for hackers to tamper with data.

The use of cryptographic techniques makes it difficult to forge or fake transactions.

That combined with the consensus algorithms used to validate blocks of data ensures that all participants have a copy of the correct ledger.

These security features make blockchain an attractive option for applications that require a high degree of trust between unknown parties, such as financial transactions or identity management.

“The internet is programmable information.
The blockchain is programmable security.”

– Balaji Srinivasan

Security Risks

The blockchain is often lauded for its security features. Indeed, the decentralized nature of the blockchain makes it very difficult for hackers to tamper with data. However, there are still some security concerns that need to be considered.

For example, because the blockchain is a public ledger, all transactions are visible to anyone who has access to the network.

This means that sensitive information, such as credit card numbers or medical records, could be exposed if it is stored on the blockchain.
It is important to note that…

No system is completely secure. As with any technology, there are always risks associated with using blockchain. But the benefits of this new technology often outweigh the risks so far.

• 51% Attack
The 51% attack, as the name implies, is a hacker’s attempt at changing the currently accepted ledger by taking control of 51% of the nodes in the network and changing their ledgers so that the newly accepted ledger becomes the one that was written by the hacker.

• Sybil Attack
The Sybil attack is not for stealing information or money, but rather for sowing chaos within the network. It works by creating a large quantity of fake identities and flooding the network so that the system crashes.

• Routing Attack
The routing attack works while the data is mid transfer. The hacker starts to intercept all the data going to the server and copies it before sending it on its way. This type of attack is hard to track on account of the fact that it doesn’t show any signs of the attack itself.

These are some of the types of attacks a blockchain can experience and this does not take into account the human side of hacking such as scamming, phishing and key logger attacks that are performed on individuals rather than the system itself.

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Blockchain security is about understanding blockchain network risks and managing them. The plan to implement security to these controls makes up a blockchain security model. Create a blockchain security model to ensure that all measures are in place to adequately secure your blockchain solutions (IBM) [3].

While the blockchain is very secure, the systems that interact with the blockchain (such as exchanges or wallets) are not always as secure.
This means that there is a possibility that these systems could be hacked, and user information could be compromised.

Improving Blockchain Security

When it comes to security, blockchain technology is often touted as being highly secure and tamper-proof.

However, there are still some risks to be aware of when using this technology. Here are some tips on how to stay safe when using blockchain:

  • Keep your private key safe and secure. This is the most important thing to remember when using blockchain technology. Your private key is what gives you access to your funds and transactions. If it falls into the wrong hands, your funds could be at risk.
    Keep your private key in a safe place, such as a password-protected file or hardware wallet.
  • Be aware of scams. Unfortunately, there are many people out there who are looking to take advantage of others. Be sure to do your research before sending any funds or personal information to someone. If something sounds too good to be true, it probably is.
  • Choose a reputable wallet or exchange. When you’re ready to start using blockchain technology, be sure to choose a reputable wallet or exchange. There are many options available, so be sure to do your research before selecting one.
  • Don’t store all your funds on a single platform. If possible, spread your funds out across multiple wallets or exchanges. This way, if one platform is compromised, the majority of your funds will still be safe.
  • Keep up with security updates. As with any software, it’s important to keep up with security updates.
    New vulnerabilities are discovered all the time, so be sure to install any updates as soon as they’re available.
  • Higher hash rates make it that much more difficult for hackers to crack your secret key using a brute force attack or something similar because the greater the number of characters in your key, the less likely it is to get hacked.

By following these tips, you can help ensure that your experience with blockchain technology is a safe and positive one.

If you are looking to deploy a private blockchain, then it is best if it is done in a resilient and secure infrastructure.

Employ experts to help you design a compliant and secure solution and help you achieve your business goals. Look for a production-grade platform for building blockchain solutions that can be deployed in the technology environment of your choosing, whether that is on-premises or with your preferred cloud vendor (IBM) [4].

“We have elected to put our money and faith in a mathematical
Framework that is free of politics and human error”
– Tyler Winkelvoss

It is also a good practice to perform blockchain penetration testing regularly to ensure the security of the system.

Blockchain penetration testing is where companies hire ethical hackers and digital security firms to test the strength of their blockchains.

Benefits

The benefits of blockchain security are numerous and far-reaching…
For businesses, blockchain security can provide a secure and efficient way to conduct transactions and store data.

For individuals, blockchain security can protect their personal information and financial assets.

Blockchain security is based on a decentralized network of computers, each of which stores a copy of the transaction history.

This makes it virtually impossible for hackers to corrupt the data or steal information.

In addition, blockchain security is often used in conjunction with other security measures, such as encryption, to further protect data.

“Blockchain technology isn’t just a more efficient way to
Settle securities. It will fundamentally change market structures, and
Maybe even the architecture of the internet itself.”
– Abigail Johnson

Blockchain security has already been proven in several industries, including banking, healthcare, and supply chain management.

As more businesses and individuals adopt blockchain technology, the benefits of blockchain security will become even more apparent.

“In a nutshell, blockchain security is a comprehensive risk assessment procedure done for a blockchain solution or network to ensure its security.

Blockchain security is achieved via the implementation of cybersecurity frameworks, security testing methodologies, and secure coding practices to protect a blockchain solution from online fraud, breaches, and other cyberattacks”

(Tagade, 2022) [5].

All transactions are verified and vouched for by a network consisting of thousands of computers that perform the verification process which results in completely reliable and accurate information being distributed amongst the people.

These security measures are the same for each and every transaction with minimal human involvement, which provides a certain level of trust for each transaction since it has been verified thousands of times by thousands of different machines.

Blockchain technology’s data structures have inherent security qualities because they are based on consensus, cryptography, and decentralization principles.

Each new block of information connects to all the previous blocks in a way that it’s nearly impossible to tamper with.

In addition, all transactions in a block get validated and agreed on by a consensus mechanism (authorized users), guaranteeing that each transaction is true and accurate. Thus, there is no point in failure, and a user can’t change transaction records

(Simplilearn, 2017) [6].

The Metaverse and Blockchain

Metaverse can exist without cryptocurrency and blockchain. However, a true metaverse experience is linked with the blockchain concept.

In his recent founder’s letter, Mark Zuckerberg affirmed that the Metaverse “will require not just novel technical work — like supporting crypto and NFT projects in the community — but also new forms of governance.”

Meta has advertised new jobs on its job board, some of which require a deep understanding of blockchain security and cryptocurrency. To what extent and in what terms will this integration affects the Meta platform is yet to be seen.

Conclusion

The blockchain is a distributed database that offers a secure, efficient, and tamper-proof way of storing data. This makes it ideal for a wide range of applications, from financial transactions to medical records.

However, because the blockchain is still a relatively new technology, there are some security concerns that need to be addressed.

“Blockchain security is a complete risk management system for blockchain networks, incorporating assurance services, cybersecurity frameworks, and best practices to mitigate the risks of fraud and cyber-attacks”

(Simplilearn, 2021) [7].

While blockchains are still a relatively new technology, their sudden rise in popularity due to the boom of cryptocurrency has also garnered the interest of the scientific community.

Because of this interest, we will continue to see improvement in the existing concept.

Tech giants are coming up with more advanced security measures.

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References

[1]: Adam Hayes, 24th June 2022, www.investopedia.com, What Is A Blockchain?
[2]: Manan Shah, 16th February 2022, www.fastcompany.com, 5 Blockchain Security Issues And How To Prevent Them
[3 & 4]: IBM, www.ibm.com, Basic Blockchain Security
[5]: Kanishk Tagade, 27th June 2022, www.getastra.com, An Introduction to Blockchain Security
[6 & 7]: Simplilearn, 19th July 2021, www.simplilearn.com, What Is Blockchain Security: Challenges & Examples

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