Is Blockchain Really the Answer to Cybersecurity Woes?
Blockchain is hyped to be a solution to all our security concerns, yet it is still prone to malicious attacks by hackers.
Blockchain has been hyped as a one-stop solution to all incompetent information processing systems. Even advocates of this distributed ledger technology (DLT) consider it a key to address cybersecurity problems and secure way to carry any transaction. The culmination of years of research, Blockchain is an application model of technology that encompasses features like distributed data storage, point-to-point transmission, consensus mechanisms, and encryption algorithms. It is a distributed file system where participants keep copies of the file and agree on changes by consensus. As the name implies, Blockchain is a chain of digital blocks,which contain records of transactions.
Theoretically, Blockchain is considered secure than traditional transaction process. This is because of two things: a cryptographic fingerprint unique to each block, and a “consensus protocol,” the process by which the nodes in the network agree on a shared history. This is what makes ittamperproof because a hacker would need to change the block containing that record as well as those linked to it to avoid detection. Furthermore, the system is decentralized and distributed across peer-to-peer networks that are continually updated and kept in sync. Hence the tag of not being susceptible to hacks or data breaches.
Despite all the buzz, they are immune. In reality, DLT is subject to a number of issues that centralized databases are not. Hackers have discovered creative ways to bypass the system. Emin Gün Sirer and his colleagues at Cornell University have shown that there is a way to subvert a blockchain even if you have less than half the mining power of the other miners. This is done by fooling other nodes into wasting time on already-solved crypto-puzzles. There are also times when DLT creators are tempted to deploy insufficiently-tested code on live Blockchains, thereby multiplying the risks.
Another possible threat is cryptocurrency exchange hacks. These platforms are also quite popular among hackers as they have extensive crypto holdings without sufficient security protection. The cryptocurrency exchanges can render the decentralized benefits of blockchains dysfunctional since they are centralized innately. To mitigate risks from such platforms, it is suggested to store funds via hardware or paper wallet as it can utilize minimal online touchpoints to protect money away from malicious online hackers.
In addition, the cryptocurrency systems are generally slow to process transactions and face significant scalability issues. This is because DLT architectures are fundamentally scalable. Each time any change is made to the Blockchain, it scales up. After a certain number of changes, it scales up by one data block and increases chances of being prone to fraud. Besides, even though cracking keys is not easy, hackers focus on stealing them by targeting the weakest point in the system. There is also another form of attack known as the Sybil attack that involves creating multiple false identities on a peer-to-peer network.
However, developers do have solutions to address some of the concerns. Some of these are two-step verification, using higher hashrate,and blacklisting. In two-step verification, also called two-factor authentication, a layer of wallet security is added, providing wallet key and One-time password. Only by logging using an OTP one can have real-time to access the currency wallet. One must also avoid storing the blockchain keys in a text file, Word Document, or other files where they can be easily read by an unauthorized person.
Blockchain technology is here to stay. Yet we cannot afford to ignore, the risks that may befall on it. While blockchain network is only as secure as its infrastructure, there should also be regulations, routine check-ups, encryption keys, and proper testing of code which go a long way to minimize the risks.