Top 5 blockchain security problems and tips for mitigating the risks
Blockchain security problems might cause serious damage to your businesses. Learn how to control them properly and protect your projects.
Blockchain improves the transparency of transactional information, helps to solve trust issues, and promotes open cooperation. This technology allows companies to operate more efficiently in an international environment, allowing for business continuity.
Global Newswire’s 2021 Global Blockchain Market Report stated that the global blockchain technology market size is expected to reach $72 billion by 2026, growing at a market growth rate of 51.8% CAGR during the forecast period. Besides, among the components of the blockchain market, the software solution market segment is predicted to record the highest growth during the forecast period.
Blockchain technology brings enormous benefits to many organizations, helping to mitigate the risks of previous security systems. However, it also opens up new security holes that software developers and Software security experts should notice.
Below, we list the top top blockchain security problems and tips for mitigating them.
1. Distributed Denial of Service (DDoS) attacks — Sybil attack
Distributed denial of service attack is popular on the internet. In a DDoS attack, a hacker manipulates the malicious node to “steal” the identities of other nodes, creating and spreading many fake identities, which leads to overload of the paths and destruction of the system.
DDoS uses multiple sources to attack a single target. Hackers tend to prefer this method because it is difficult to track down the attack point.
- Tips to prevent DDoS:
Theoretically, blockchain has a strong DDoS defense due to its decentralization. The blockchain network can continue to function and validate transactions even when a node is not communicating or being offline. When interrupted nodes recover, data synchronization from unaffected nodes can still take place normally.
However, to prevent unforeseen problems, you can:
- Use appropriate consensus algorithms
- Regularly check the system, because DDoS can modify the transactions of new blocks
Preventing DDoS attacks is crucial because it can lead to many other problems. When the Sybil attack gets large, the attackers control most of the computing power or hash rate and create a 51% attack.
2. 51% Attack
Hashrate is an important metric in the blockchain network. It represents the computing power of the network member. Computing power needs to be distributed relatively evenly among nodes. It is not focused on a single entity.
A 51% attack occurs when a single entity or an organization collects more than 50% of the hash rate and takes control of the entire system.
In a 51% attack, hackers can change the order of transactions and prevent those from being confirmed. They even can reverse previously made transactions, which can lead to double-spending.
- Tips to prevent a 51% attack:
Enterprise blockchains or private blockchains are not vulnerable to a 51% attack. However, businesses still need to implement internal security measures, decentralize access to avoid unwanted malicious actors.
3. Phishing attacks
In a phishing attack, the hacker aims to obtain the user’s credentials. They can send legitimate and trustworthy-looking emails to the owner of the wallet key. These emails require the user to provide login information via an attached hyperlink.
The number of these phishing attacks is increasing in blockchain networks, creating painful problems for businesses.
Phishing attacks often target individuals or company employees. Therefore, measures to prevent this attack type need to be directed towards individual education and wide-ranging solutions.
- Tips to prevent phishing attacks:
- Device security: Install malicious link detection software; Reliable anti-virus software.
- Browser security: Install an add-on (certified) to warn about unsecured websites.
- Regularly update tricks to deceive login information, do not respond to strange links
- Reconfirm with the partner when receiving an email related to the issue asking to provide login information.
4. Routing attacks
A blockchain network/application works on the transmission of a huge amount of data in real-time. Hackers can take advantage of an account’s anonymity to intercept data during data transmission to internet service providers.
This threat is often difficult to detect because data transmission and operations continue as normal. The danger is that these attacks will often leak confidential data without the members knowing.
- Tips to avoid routing attacks:
- Data encryption
- Change passwords regularly; use high strength password
- Delegating employee accounts
- Educate employees about information security risks
5. Risk from the endpoint of the blockchain network
The endpoint of the blockchain network is where people interact with the blockchain — on electronic devices such as computers, mobile phones,… Hackers can observe user habits, attack devices to steal the user’s key. This is one of the noticeable blockchain security problems as well as other technologies.
- Tips to avoid risks from the blockchain network endpoint:
- Do not save blockchain keys as computer text files
- Install anti-virus software for electronic devices
- Regularly review the system, monitor the time, location, and device access.
Overall, ensuring a blockchain solution works safely and securely requires a combination of good software, strategy, automated products, and skilled operators to monitor the entire chain. CTOs should pay attention to:
- About blockchain application design: Determining the decentralized model in the organization; determine the type of data stored on the blockchain; Design identity requirements and related regulations; Define the logic for resolving conflicts in the chain; Design data recovery solutions.
- About infrastructure: Ensure that the using infrastructure/services are reliable with high security.
- About business and governance risks: Identify where blockchain will change existing business models in terms of finance, compliance requirements, identity, and access management.
In addition, project managers also need to be constantly updated with regulatory and legal changes, technological innovations to promptly come up with an appropriate solution.
Security and privacy are always at the core of akaChain’s enterprise blockchain solutions. It is essential to detect threats before they happen. Contact us to understand better blockchain security problems and secure blockchain solution design methods.
akaChain is backed by FPT Software, a globally leading technology, and IT services provider. It is an end-to-end, permissioned, multi-chain network based on the Hyperledger Fabric. Since its establishment in September 2018, akaChain’s product has assisted many enterprises, from SMEs to Fortune 500 firms, to transform with distributed ledger technology. The company provides a broad range of permissioned blockchain-based products and services in multiple sectors, including retail, supply chain, banking and finance, insurance, shopping mall management, etc. to transform with its distributed ledger technology. For more information, please visit https://blog.akachain.io/
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