Blockchain Vulnerabilities – A Short Review

Once hailed as unhackable, blockchains are now getting hacked | MIT  Technology Review

Blockchain Vulnerabilities – A Short Review

Blockchain technology is what will prevail in the future as a tool for financial institutions. And this future is not as far as you think. However, crypto projects are based on blockchain networks, and they are quickly taking over the internet right now. Even though a blockchain system and smart contracts are highly secure compared to previous web2 technologies, it is still vulnerable to some cyber threats.

Today we are going to discuss with you what are the flaws in blockchain security and how the fraudsters can exploit them to get their hands on your confidential data. We will also mention a highly efficient tool to protect your blockchain solutions from threats.

What is blockchain technology, and why is it the future?

Blockchain is a system that consists of “blocks” linked together. They are forming a specific data structure that is decentralized and very secure. It is because there is no single authority in the blockchain network.

Every of the blockchain participants typically has the same amount of power and can open a blockchain themselves. Blockchain technology produces special digital signatures and encryption tools that immensely decrease the chance of fraud.

So basically, blockchain infrastructure is a place where the power is equally spread among all the users. All the essential security layers are provided by the blockchain system itself and are very hard to attack. Even with a small risk of being a victim of cyber attacks, you might still suffer from cyber criminals while using blockchain systems.

Vulnerability assessment – an excellent tool to protect your blockchain system

Vulnerability assessment is a great tool specified to detect and remediate flaws in any system.

It is performed by a unique program that will scan your entire system based on your previous experience to find its weak spots. After that, you will be given options on how you can remediate the vulnerabilities to secure your system.

You can use this method for both organizations or just personal systems. Every successful company that utilizes IT infrastructure uses vulnerability assessment to protect its data and funds. If you want to learn more about this wonderful security procedure, check this article about vulnerability assessment.

Blockchain security vulnerabilities

Blockchains can be classified into two main types – Public and Private blockchain. The difference between them is that the public blockchain can be accessed by anyone and private only by a restricted group of people. Obviously, that makes a public version of the system more vulnerable to fraudsters.

So let’s take a look at methods that fraudsters usually use to exploit blockchain security vulnerabilities.

Phishing attacks

Sadly, even the best security features blockchain offers can’t protect users from social engineering fraud. A phishing attack is an old and very popular method to steal your data, or in our case, private keys.

Criminals will send you emails or try to contact you via other messaging systems intending to deceive you and steal your data. They will use extracted confidential data to get access to your account. And further, they can do anything they want with it, starting with currency theft and finishing with impersonating themselves as you to fool other users.

Double spending attacks

A double-spending attack occurs when a user pays twice for the same transaction. It rarely happens in the blockchain, but you still have the chance to face it.

It is performed by criminals trying to manipulate financial transactions to duplicate your payment, so they have a double amount of money.

Routing attacks on the blockchain network

Routing attack is one of the most widespread cyber on your digital assets in the blockchain solution. It takes its roots from internet service providers.

If the fraudsters take control over your ISP, they can use it to place a fake route to manipulate with blockchains. This fraud happens due to the vulnerable Border Gateway Protocol used by internet providers to share routes. So it became an apparent vulnerability for criminals to exploit to steal data.

Private key security attacks

With a private key being the primary tool to access most of your blockchain data, criminals will want to steal it from you using data breaches. It means not only valuable information but also your crypto coins.

If your private key has a lousy implementation in the blockchain, it may result in fraudsters acquiring it from a public key. Avoid using the same key for different signings.

Another way they can steal a key is if you are not keeping it in a secure place. This basically means that you should avoid holding your private key on the notepad file or other insecure software.