Without a doubt, blockchain technology has grown in popularity in recent years. Apart from its initial application in cryptocurrency, it is now being used in healthcare, real estate, smart contacts, and other fields.
Blockchain technology collects and stores data in groupings known as “blocks,” and each block can hold a set amount of data. When a block is full, it is chained to the previous full block, forming a data chain, hence the brilliant name “blockchain.”
The technology has been a great example of how security tenets in financial transactions and information transmission are transformed. It provides a one-of-a-kind data structure as well as built-in security features. Blockchain is based on the ideas of consensus, decentralization, and cryptography to ensure transaction trust.
However, many blockchain security issues have arisen due to faulty technology implementation.
BLOCKCHAIN SECURITY ACCORDING TO BLOCKCHAIN TYPE
To further explain blockchain security, it is necessary to first grasp the difference between public and private blockchain security. In terms of participation and data access capabilities, blockchain networks can have various effects. As a result, there are two forms of labeling for blockchain networks.
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.
• Public blockchain networks are open and might allow any user to join while maintaining participant anonymity.
• In private blockchain networks, identity is used to confirm membership and access privileges. Furthermore, they only allow familiar organizations to participate.
FIVE BLOCKCHAIN SECURITY ISSUES AND SOLUTIONS
Many people are right when they believe blockchain is inherently secure. Blockchain is unquestionably beneficial to organizations, but it has significant drawbacks due to specific security issues. Here are five of the top blockchain security challenges and their solutions.
1. 51% ATTACKS
Miners play an important role in validating transactions on the blockchain, allowing them to develop even further. A 51% attack is possibly the most dreaded threat in the entire blockchain business. These attacks are more likely to occur in the chain’s early stage, and a 51% attack does not apply to enterprise or private blockchains.
A 51% attack occurs when a single individual or organization (malicious hackers) collects more than half of the hash rate and seizes control of the entire system, which can be disastrous. Hackers can modify the order of transactions and prevent them from being confirmed. They can even reverse previously completed transactions, resulting in double-spending.
To prevent 51% attacks:
• Improve mining pool monitoring.
• Make certain that the hash rate is higher.
• Avoid using proof-of-work (PoW) consensus procedures.
2. PHISHING ATTACKS
Phishing attacks on blockchain networks are increasing, causing serious issues. Individuals or company employees are frequently the targets of phishing attempts.
The hacker’s goal in a phishing attack is to steal the user’s credentials. They can send legitimate-looking emails to the owner of the wallet key. The user is required to enter login details via an attached fake hyperlink. Having access to a user’s credentials and other sensitive information might result in damages for both the user and the blockchain network. They are also vulnerable to follow-up attacks.
To prevent phishing attacks:
• Improve browser security by installing a verified add-on to notify you about unsafe websites.
• Improve device security by installing malicious link detection software as well as dependable antivirus software.
• Reconfirm with the partner if you receive an email requesting login details relating to the issue.
• Don’t click on the link until you have thoroughly reviewed it. Instead of clicking on the links, enter the address into your browser.
• Avoid open Wi-Fi networks when using an electronic wallet or other important banking transactions.
• Make sure your system and software are up to date.
3. ROUTING ATTACKS
The next major concern for blockchain technology’s security and privacy is routing attacks.
A blockchain network and application rely on the real-time movement of massive amounts of data. Hackers can use an account’s anonymity to intercept data as it is being transmitted to internet service providers.
In the case of a routing attack, blockchain participants are usually unaware of the threat because data transmission and operations proceed as usual. The risk is that these attacks will frequently expose confidential data or extract currency without the user’s knowledge.
To prevent routing attacks:
• Implementat secure routing protocols (with certificates).
• Use data encryption.
• Change passwords regularly; use strong passwords.
• Educate yourself and your employees about the hazards associated with information security.
4. BLOCKCHAIN ENDPOINT VULNERABILITIES
The vulnerability of blockchain endpoints is another important security concern in blockchain security.
The blockchain network’s endpoint is where users interact with the blockchain: on electronic devices such as computers and mobile phones. Hackers can observe user behavior and target devices to steal the user’s key. This is one of the most visible blockchain security issues.
To prevent endpoint vulnerabilities:
• Do not save blockchain keys on your computer or mobile phone as text files.
• Download and install antivirus software for your electronic devices.
• Review the system regularly, keeping track of the time, location, and device access.
5. SYBIL ATTACKS
In a Sybil attack, hackers generate numerous fake network nodes. Using those nodes, the hacker can obtain majority consensus and disrupt the chain’s transactions. As a result, a large-scale Sybil assault is nothing more than a 51% attack.
To prevent Sybil attacks:
• Use appropriate consensus algorithms.
• Monitor other nodes’ behavior and check for the nodes that are only forwarding blocks from one user.
While these algorithms may not completely prevent these attacks, they make them impossible for the hacker to carry out.
While blockchain has several security vulnerabilities, cyber security professionals can do a lot to mitigate these issues. IT experts with properly honed analytical and technical abilities will be well-positioned to deploy blockchain most securely.
Manan Shah is the Founder and CEO of Avalance Global Solutions, a California-based Web3 Cybersecurity, and Information security company.