No information system or cyber defence can be considered completely secure. Given the lucrative nature of cybercrime and the criminals’ inventiveness to search out new means of attack, what is currently considered safe won’t be tomorrow.
Although blockchain technology is becoming more popular, there are still others who doubt its viability, security, and scalability. Blockchain-using firms must develop cyber security policies and standards in order to safeguard their organisations from external threats, even while some of blockchains’ fundamental features include data confidentiality, integrity, and availability.
Can Blockchain be Hacked?
The answer is yes, based on previous successful cyberattacks on working blockchains. Given the security principles built into the architecture and operation of the blockchain, it begs the issue of what vulnerabilities might exist and how they have been exploited.
Several types of blockchains can be identified based on their openness to all users or restriction to known participants, as well as whether or not they require permission. Higher levels of security are thought to be provided via permissioned and restricted systems, sometimes known as “closed blockchains”. They offer more flexibility about who may engage and what activities they can carry out. The relative weighting of security in relation to blockchain performance is typically a factor in choosing the type of blockchain to implement.
There are several flaws, nevertheless, that apply to all blockchains. Some are specific to how blockchains work, while others are related to the technology that was used to construct them. A blockchain’s human members present a chance for social engineering techniques like spoofing, phishing, and others that are frequently utilised by cybercriminals in other contexts.
Hackers might pose as wallet providers or send phishing emails to participants in order to gain their private encryption keys, which enables thieves to conduct fraudulent transactions on the blockchain. Other common attack strategies include taking advantage of lax endpoint security to gain access to information stored on participants’ devices (including private keys) and lax network security to snoop on private information.
Hackers broke into a worker’s PC at South Korean bitcoin exchange Bithumb using these techniques. More than 30,000 client records were stolen and afterwards exploited to trick people into giving over their authentication information so that cryptocurrencies could be stolen.
Open blockchains provide more privacy. Users are recognised by a public address, which is frequently a series of letters and numbers that is difficult to connect to a specific individual. Cybercriminals frequently collect payments in bitcoin supported by blockchain technology due to its anonymity, which attracts them. However, methods like blending and tumbling are able to conceal the true origin of cryptocurrency, making it much more difficult to trace ownership. Blockchain assessment applications are able to trace wallets and transaction data using IP addresses, for example.
Why Prioritise Cybersecurity in Blockchain?
Although there are many advantages to employing blockchain technology in business, there are also drawbacks.
Cryptocurrency, for instance, serves as payment methods in illegal operations including ransomware, con games, and financing terrorism, with a value of $14 billion in 2021, up 79% from 2020.
However, blockchain technology offers fresh cybersecurity risks and particular security difficulties. As a result, one of the most important factors in embracing and utilising blockchain should be cybersecurity.
● Consensus Protocol Threats
To get to an understanding among members while creating an additional block, blockchains use consensus mechanisms. Consensus protocol flaws, such as with the majority (51%) and selfish mining attacks, pose a danger to the governance and direction of a blockchain network because there is no central authority.
In order to guarantee that the consensus methodology always results in the intended resolution, it must be carefully assessed and tested.
● Breach of Confidentiality & Privacy
The second danger is related to the disclosure of private and sensitive information. Blockchains are open by nature, and users may exchange data from which hackers may be able to deduce personal data and information.
Companies must therefore carefully consider how they use blockchain to make sure that only authorised data is transmitted without disclosing any confidential or sensitive data.
● Use of VPN
Blockchain VPN is a type of VPN that supports and utilises blockchain and cryptocurrency. However, not all transactions are sufficiently secure, as we described previously with regard to secured transactions. Blockchain VPN is crucial in this situation because it can add an extra layer of protection to ensure secure transactions along with malwares. Your IP address can be concealed, preventing thieves from using your wallet address to access your original IP address and steal money.
It is crucial to protect yourself against cyberattacks as the world transitions to digital currencies like bitcoin. You can increase the security and anonymity of your transactions by using VPNs. It will be dangerous if your PC or Windows do not have a VPN, so to avoid any fraudulent activity you should consider the VPN.
● Compromised Private Keys
Compromise of private keys, which blockchains utilise to identify and authenticate users, is the third concern.
Assailants can obtain access to users’ private keys through software flaws in blockchain clients or through the use of conventional information security techniques like phishing and dictionary assaults.
For instance, due to lax security measures, hackers were able to take $500 million from user wallets during the January 2017 attack on the Coincheck cryptocurrency exchange.
Ongoing Security Efforts
It is crucial to keep in mind that security requires continual work and that no system can ever be completely secure at all times, especially given how different technological components are interconnected and how quickly technology is developing.
Blockchain networks have the potential to be far safer than conventional networks and offer a number of security advantages. When creating, running, or using a blockchain, caution should be given, just as with any other technology. Think about key management, identity and access management, secure communication, code security, and consensus management.
As security guidelines are created and approved, they should be put into practise to fully take use of blockchain technology’s security advantages.
As we’ve seen, blockchain technology is able to completely replace outdated third-party verification processes, which have the ability to change cybersecurity. This would allow for more secure transactions for users while also saving time and money. When it comes to supply chain security, blockchain technology also provides a mechanism to track goods from the point of origin to the final destination.