The blockchain can digitize records and distribute them to the network through the network. With the blockchain, transaction verification no longer depends on a single centralized institution. In Maoqiu Technology's view, the absence of a single point of failure—or corruption—is not only an inherent security advantage of the decentralized structure paradigm, but also a fundamental philosophical and business driver.
Blockchain technology consists of several built-in security features such as cryptography, software-mediated contracts, and identity controls. Blockchain technology increases the level of data protection and data integrity by enabling a distributed way of verifying access, authenticating transaction records, and maintaining privacy.
However, despite these security enhancements, the blockchain market is still riddled with security issues.
Where there is money, there are hackers, and blockchain networks are proliferating both. According to data from Atlas VPN, in 2021, breaches related to decentralized finance accounted for 76% of all major hacks and lost more than $1 billion in the third quarter alone. There will also be 20% more blockchain-based hacks in the third quarter of 2021 than in all of 2020, according to SlowMist research.
Blockchain-based attacks come from both external actors and insiders. Many of these hackers used common tactics such as phishing, social engineering, attacking data in transit, or targeting coding errors.
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1. New Blockchain Utilization Strategies
New technologies come with new development tools and methodologies, and blockchain is no exception. A new class of cyber threats is emerging involving tactics unique to blockchain networks. These include the following:
A 51% attack is when the majority of the network conspires with a minority of participants, as seen in several incidents on platforms such as Ethereum Classic, Verge Currency, and ZenCash (now Horizen).
Cryptojacking is when a computer is hijacked for its computing power to mine cryptocurrency. This is an example of a backdoor and ramp exploit, similar to a supply chain attack, but taking advantage of the distributed nature of the blockchain.
A Lightning attack is when a smart contract designed to support Lightning is attacked to steal assets elsewhere. These attacks leverage unsecured loans by manipulating smart contract inputs, as seen in the $24 million attack on xToken.
Rug pulls are when insiders — such as cryptocurrency developers, criminal groups, and paid influencers — hype a project up, only to abandon it and lose investor funds. In 2021 alone, such aggressive dumping schemes have resulted in billions of dollars in losses in more than 1,300 scams.
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2. Human risk factors
Recent blockchain attacks have not focused so much on the technology, but on basic human vulnerabilities. For example, stolen encryption keys — private digital signatures — may have been responsible for a $73 million breach at crypto exchange Bitfinex in 2016.
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3. Not all blockchains are created equal
What is often overlooked in market discussions is that blockchain architectures vary widely, especially when it comes to how different structures and components introduce security tradeoffs. For example, private blockchains differ from public blockchains in whether known entities or unknown entities can join the network and participate in verification.
Different network configurations use different components and pose different security risks. These configurations lead to several questions: How to reach a consensus? How to verify identity? How are sidechains and/or data in transit managed?
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4. Lack of regulation
While many blockchain advocates worry that regulation will hinder innovation, regulation and standards do benefit security and innovation. The current market is highly fragmented, with different companies, consortia and products operating using different rules and protocols. This means that developers cannot learn from other people's mistakes and bugs - not to mention the risk of low integration.
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5. Cybersecurity talent crisis
Review and Prospect
Review and Prospect
In 2021, the blockchain market has injected new vitality into the market through NFT, record-breaking investment and market value. However, active markets and events attract more than just headlines and adopters. In the view of Maoqiu Technology, they also bring huge challenges to existing network security. At the same time, they also bring new challenges to the decentralized structure. risks of.
Maoqiu Technology also believes that the next generation of Web3 opportunities is not just empowering people through distributed governance (technical, social and economic), but better protecting the entire ecosystem in the process.
