Blockchain technology is all the rage these days. Business owners are going to start hearing this buzzword as a bullet point in software solutions. Developers from all over the world are trying to harness the power of encrypted, distributed data, mainly due to the reputation that blockchain has regarding the “unhackable” permanence of the data stored upon it. Yet, as powerful as blockchain is purported to be, it isn’t totally infallible.
How Blockchain Has Been Shown to Be Vulnerable
Let’s face it, blockchain technology is a human invention, which means that there are going to be some flaws.
Admittedly, the concept behind the blockchain makes this hard to believe. Every transaction made through the blockchain, financial or data-based, is given a permanent, designated “block” in the chain. Before the transaction is completed, the rest of the network needs to approve this new block’s validity. The block is then added to the chain, where it cannot be altered and provides an unchangeable record of the transaction. To undo it, a new block would be created. It’s only then that the transaction is completed.
While this method may seem foolproof, this just isn’t the case. In March 2014, cybercriminals managed to steal $450 million worth of Bitcoin through a transaction mutability vulnerability, and in June 2016, cybercriminals managed to steal approximately $60 million by leveraging a recursive calling vulnerability.
Additional Blockchain Vulnerabilities
Again, as a human creation, there are going to be some flaws in blockchain platforms. One investigation revealed that some blockchain and cryptocurrency platforms had more than 40 vulnerabilities.
Many of blockchain’s vulnerabilities have more to do with the nature of the platform as well. One such vulnerability is known as a 51% vulnerability and is associated with mining cryptocurrencies. Let’s assume you’re a cryptocurrency miner. If you manage to accumulate hashing power that exceeds more than half of what the blockchain contains, you could leverage a 51% attack to manipulate the blockchain to your own advantage.
Naturally, more popular blockchains, like Bitcoin, are far too expensive to be practical targets, but smaller coins are much more affordable to attack and can be lucrative for hackers. In 2018, 51% attacks were leveraged against less popular cryptocurrencies, netting the attackers approximately $20 million.
Security of Private Keys
Using a blockchain requires a user to have a private key. Naturally, if this key were to be stolen, those cybercriminals who stole it would be able to access and tamper with that user’s blockchain. What’s worse, because the blockchain is decentralized, these kinds of actions are difficult to track and even harder to undo.
As you might imagine, most breaches involving a blockchain are in some way tied to an end user. In 2017, a fraudulent cryptocurrency wallet service was left up for months as the cybercriminal responsible allowed people to funnel their cryptocurrencies into it before stealing $4 million out of a reported total of $2 billion being stolen since 2017. In January 2018, it was disclosed that hackers stole private keys with malware, taking over $500 million in NEM coins.
If hackers are able to steal from a purportedly “unhackable” technology, what’s to stop them from stealing from your business?
Cybersecurity solutions from Advisors Tech, that’s what. We can set up the security solutions your business needs to protect its data and monitor your systems to detect breaches preemptively, preventing a security issue from happening. To learn more about what we can do, reach out to us at 844.671.6071.