Blockchain developers know that, like most any technology, Bitcoin is susceptible to cyberthreats.
Similar to traditional software, blockchain security models require first the development of a risk model, addressing all of the possible attack vectors, including governance, code and technology, as well as process risks.
By evaluating these threats, a team can develop a threat model and define pertinent security controls.
There is a wide array of possible attack vectors when it comes to private, public, and other types of blockchains. These include phishing attacks, code exploitation, routing attacks, stolen keys, sybil attacks, computer hackings, and of course the vaunted 51% attack.
Phishing attacks employ text messages, emails, and even phone calls to implore blockchain users to hand over their blockchain accounts unique ID associated with a blockchain account or to click a malicious link.
The hackers behind phishing attacks often use believable emails appearing to come from a friend, colleague or otherwise. Some anti-malware software can detect malicious links, as do certain browser extensions. Users should also verify senders, etc. before interacting with any link themselves.
A blockchain’s code can also be exploited. Black hat hackers might identify a weakness in a blockchain and exploit the code to steal the network’s native coin or token.
For instance, smart contracts are vulnerable to reentrancy and Denial of Service (DoS) attacks. Such vulnerabilities may enable malicious actors to alter contract data and siphon funds. Decentralized Finance (DeFi) has proven particularly vulnerable to such attacks.
The Decentralized Autonomous Organization (DAO), a decentralized venture capital fund built on a blockchain, lost an amount approximating a third of its value via code exploitation. This type of hack can apply to both public and private blockchains.
Routing attacks are another clear threat to blockchain networks. These include common denial of service attacks and man-in-the-middle attacks. By using these methods, hackers can intercept data on networks.
Sybil attacks overwhelm a network with login attempts with false credentials and identities.
These attacks can give cybercriminals free rein over a compromised blockchain network.
And, of course, there is the 51% attack. This generally applies to Proof of Work blockchains. Bitcoin’s biggest threat still to this day is perhaps the 51% Attack, which takes place at the bitcoin mining layer.
If a group of miners took over more than 50% of the computer power of a blockchain they can take over the Bitcoin network and begin to censor transactions, stripping a blockchain of its treasured immutability.
However, as Bitcoin’s hash rate increases, the likelihood of this attack decreases.
How to improve my blockchain security?
Cybersecurity best practices are crucial for blockchain developers. There are some client-side steps to take including employing VPNs to encrypt internet activity and minimize the threat of routing attacks.
Also, don’t leave devices used to code a blockchain unattended. There are also server side steps to take, which become more involved.
Strong access controls prevent unauthorized access to a blockchain network. This can be as simple as using strong passwords, two-factor authentication, and limiting access to a protocol.
A robust Identity and Access Management system for your blockchain guarantees that only legitimate and authorized users can access the system.
Updating operating systems, patching blockchain software, and any other software that interacts with your blockchain, such as middleware, which is used by a blockchain to communicate with the outside world.
When designing a blockchain solution, consider these key questions:
- What is the governance model?
- What data to record in each block?
- How is identity managed?
- Should block payloads be encrypted?
- What is the criteria for key management and revocation?
- What is the disaster recovery plan for the blockchain participants?
- How are blockchain block collisions solved?
Finally, blockchain developers must develop a disaster protocol. What happens in the worst case scenario? This could include numerous attack vectors or even natural disasters themselves.
Blockchain operational security (OpSec) bolsters the security of decentralized systems. It can only be done with a multi-faceted security approach. Developers must understand the risks they face when deploying new blockchain technologies,
and prepare for these risks.
