Blockchain Security

Keep your data and the integrity of your organisation safe with Blockchain Security.

Technology is constantly advancing and so are the devices we connect to on a daily basis, the first time the number of devices connected to the Internet of Things (IoT) exceeded the number of people on earth was in 2008, while a current study by Transforma Insights predicts that by 2030 there will be approximately 25.4 billion connected devices, so apps, smart devices, smart homes, and wearables have increased and with them the risks to be aware of.

With so many people connected globally, it is no wonder that hackers want to exploit vulnerabilities in our systems.

The goal of technology is to innovate the way we perceive the world and make it easier, personally and professionally, so staying on top of new trends is essential to realise the potential that organisations have to offer.

As our stay in the digital world increases so does the amount of data we generate daily, and as it continues to increase the more actors will want to do us harm, hackers are always on the lookout for technological implementations to use to their advantage and seize data to commit their crimes, so more and more companies are looking for the best ways to mitigate the risks.

There are different ways to keep an organisation’s data secure, but one of the most popular in modern times is Blockchain technology.

Things you should know about the Blockchain.

Around the 1990s Blockchain technology emerged, yet it has become more common in recent years for its use in data protection, cybersecurity, security protocols, and keeping assets secure, this technology is mostly recognised for its ability to be decentralised.

Blockchain technology, or blockchain, is a ledger with the ability to store valuable data and information without the need for third parties.

It works by using blocks that are added to the chain so that the new block can be added, all the servers of the network must enter into consensus, which makes them immutable and, if there is any change, the previous data of the cryptographic chain can be visited. Furthermore, due to the use of the decentralised network, these transactions are secure.

Blockchains can be divided into three:

Private Blockchains: this is one of the most controlled and smallest networks, they are usually networks in which confidential information is shared only between trusted members, so their transactions can only be seen by their users.

Public blockchain: these are the longest distribution networks, in this network anyone who maintains their open-source code can participate and their transactions are completely transparent and anonymous, the best known public blockchain network is the Bitcoin.

Permissioned blockchains: these are large networks that use a native token for most of them, with a distributed system in which the role of each individual is controlled, such as Ripple.

Networks can be connected in different ways and set their own rules, and a decentralised network is not exempt from this. When several servers connect without a central server, this is referred to as a decentralised network, which means that the workload and, of course, data are distributed.

Decentralised networks bring several benefits to their users:

-Decreased errors on a large scale, this refers to the fact that if one device fails the rest can continue to work normally.
-More devices can be added and increase the power of the ecosystem.
-Security, sharing nodes makes it more difficult for an attack to affect devices.
-Privacy, the ability for a network to have multiple nodes makes it more difficult to track a network.

Although these networks are complex, the ability to share between multiple nodes is an advantage that should be used to our advantage.

For an organisation to build a secure system it must know what type of network would benefit it, whether it wishes to have a more controlled network or the decentralisation of public networks, yet what role the Blockchain plays insecurity is something we will explore.

The dangers of going unprotected.

The structure of the Blockchain is already quite secure due to its cryptographic and decentralised elements, yet comprehensive procedures must be undertaken to assess the risks to which the Blockchain is exposed, this can be done through cybersecurity processes, secure coding practices, and security testing methodologies.

In networks there will always be risks of cyber-attacks and fraud, especially because hackers are experts in knowing the protections and exploiting vulnerabilities, some of them are:

Key theft, cryptocurrencies have two types of keys: the public key and the private key. While the public key works for Peer-to-Peer (P2P) transfers, the private key is the one that gives access to the tokens, so it should not be shared with anyone.

A study by Bitfinex found that approximately USD 73 million was stolen from keys stolen from Bitcoin users.

Code exploitation, contrary to popular belief blockchain networks are not entirely secure, codes can sometimes present vulnerabilities that hackers will be sure to exploit, increasing the risk potential.

Few security controls on employee computers, there are many ways in which a user can put the entire ecosystem at risk, mostly through ignorance, once a machine has been hacked it gives almost total freedom to the malicious actor within the ecosystem.

Recently, an employee’s device at Bithumb was hacked, USD 870,000 worth of bitcoin was stolen and the data of 30,000 was compromised.

Depending on the type of blockchain the threats vary between them, however, most hackers seek to access data using four types of attacks:

Phishing Attacks: Human error is one of the most exploited vulnerabilities by hackers, we have previously talked about how user ignorance can put the ecosystem at risk, and the normality with which we tend to click on unknown links leaves us at a disadvantage.

Using emails that make them look legitimate, they make users believe that they have been reached by a company, unaware that they will take the user’s credentials and any sensitive information to make a profit from them, causing huge losses to the organisation and leaving the system unprotected.

Routing Attacks: Blockchain technology depends on communication between nodes to give consensus to transactions, interrupting this connection gives the attacker the power to divide this network between two or more components, to create a parallel Blockchain with which they can take the profits they want and then disappear without a trace.

Using this parallel network they make sure to keep the attack silent so that the participants remain blind to the crime.

Sybil Attacks: this attack is named Sybil after a woman named Sybil Dorsett, who was diagnosed with Multiple Personality Disorder, these attacks are known to be carried out by a hacker under various false identities who accesses the Blockchain with the aim of crashing the system. 

If his influence on the Blockchain is strong enough he will compromise the rest of the transactions, as he would win over the honest nodes and could have the ability to receive and send blocks, as well as block other users of the network.

51% attacks: For a decentralised network to function properly, it must rely on large computing power to mine cryptocurrencies and to be able to carry out consensus transactions.

If a group of miners gathers the necessary resources they could monopolise more than 50% of the power of the network, giving all kinds of control to these users with the ability to manage the Blockchain as they wish. Three cryptocurrencies have suffered this type of attack in 2018, Ethereum Classic, ZenCash, and Verge.

Being protected is a must and designing a Blockchain solution is part of that, so when building one you should consider the following:

-What type of network benefits your organisation?

-What role will participants have within the network?

-How will the keys be managed and who will have access to them?

-What data will be protected in the blocks?

-Will they be handled in anonymous networks or will a record of identity be kept?

When designing a network it is necessary to build a system of plans for different types of scenarios and what actions should be taken for recovery plans, logic for collision resolutions in the Blockchain, relevant regulatory requirements, implementation of multi-factor authentication, as well as whether clients will have access to the Blockchain system and what security system will be used.

Manage risk prevention.

Blockchain security is about the ability to understand these processes, vulnerabilities, and risks to which they are exposed, so that identity controls, access management, governing policies, and criteria are created, there are many things to consider in the processes that the organisation must create to decrease vulnerabilities.

The process of building a security model evaluates various elements that may be at risk, especially the organisation and the technology, as well as evaluating the solutions that will be applied to address threats and creating a threat model that will be applied when one occurs.

These services perform their function by bringing together conventional security, such as anti-virus and firewalls, with security controls that strengthen the Blockchain network.

Be prepared using Blockchain Penetration Testing.

Since the goal of hackers is to exploit vulnerabilities in a system it is important to ensure that the security process is in place and performing its functions correctly, testing has been used multiple times in cyber security to ensure that the strategy is effective in the face of an attack and in a Blockchain network, it is no different.

This process is carried out by ethical hackers who will try to exploit the vulnerabilities of the system as if they were real criminals, the main focus is to detect security loopholes and identify other errors in the system and then repair its weaknesses.

In general, there are three steps to complete this process:

Gathering information and potential threats: the Blockchain architecture is studied according to the organisation, gathering all the data on vulnerabilities that can be exploited and assessing the targets for conducting security testing.

Testing: once the data has been gathered, the first tests are carried out to create a plan with the best practices to be carried out, this includes Blockchain Static and Dynamic Testing, Network Vulnerability Assessment, and documenting the information found.

Exploitation: weaknesses in the system must be exploited so that they can be repaired and strengthened.

Relying on too few means of protection can lead to potential risks from which an organisation may never recover. Blockchain networks may not be immune to threats, but knowing the vulnerabilities to which data is exposed can help protect your organisation from loss and overcome the technology that these actors have at their disposal.

Learn how to protect your documents ,both digital and analogue through blockchain & cyber security solutions.

More from our Blog