The hype of blockchain technology came into existence with the launch of Bitcoin in 2007. Since then, although cryptocurrencies have gone through several ups and downs, the blockchain craze has been steadily increasing. However, if you take a closer look at it, you’ll realize that the real hype is all about the distributed ledger property of blockchain that makes it immutable and hack-proof. Who doesn’t want the security assurance after all?
Blockchain systems use high-level encryption for data transfers, simultaneously allowing multiple nodes to access the transactions. This is why it’s too tough to hack or edit any data, as changing data will require changing all the blocks, which can be easily traced by the participants of the chain. However, many are still doubtful and raise the question: Is blockchain really hack-proof? Here are a few possible security threats that can be of serious concern for blockchain systems. Check these out!
Not always an attack is caused by outside threats. Blockchain networks can be attacked by inside malicious actions as well, such as someone having access to multiple nodes of a network may establish false identities to trick the network. A Sybil attack occurs when a huge number of nodes are owned by the same party on a single network and an attempt is made to disrupt the network activity by sending bad transactions or making changes to the ongoing valid transactions.
However, blockchain systems are fundamentally designed keeping such threats in view. Using proof-of-ownership, proof-of-stake, and proof-of-work algorithms, the users can evaluate if a particular node is trustworthy or not. Talking in general, the biggest threat to blockchain networks is having unverified participation.
Bitcoins are built on the blockchain, which is so much praised for its decentralized and security features. Yet, we come across several cryptocurrency theft news flashing on the screens every day. How do you think bitcoins worth millions and billions of dollars are stolen so easily? It is because of the compromised crypto-exchanges and individual accounts that are open to malicious attacks. This is to be considered seriously and the loopholes in third-party services such as wallets and exchanges should not be overlooked. Blockchain developers and professionals have already started addressing such threats in real time and, the crypto market is expected to become more secure.
Unauthorized Access Threats
The blockchain ecosystems are designed delicately to secure and validate the users’ access, still dealing with unauthorized access or tracking down unverifiable activities is a brainstorming job. Verification techniques like ‘Byzantine generals’ delegation algorithm are being used to solve authentication issues. In this game theory, a consensus is carried out where experts discuss the various outcomes as per players’ choices. Normally, a bad consensus means the remote node cannot be trusted as it may result in jeopardizing the security of the blockchain network.
Blockchain technology is still in its nascent stage and many nations and experts are still working to develop various use cases of the technology while simultaneously trying to ensure a decentralized and secure experience to its users. There’s a lot more available for explorations in the blockchain.