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Blockchain and Cybersecurity

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Posted by Michael Sedique

Blockchain provides unprecedented data security by merging cutting-edge technology with the traditional concept of accountability. Blockchain is used by both corporations and individuals to conduct transactions and store data. Learn how blockchain protects digital data and how it can help your company.

What Exactly Is Blockchain Technology?

A blockchain is made up of a network of computers that store and share data blocks. Nobody can change or delete anything after it’s been added to the blockchain network. Instead, a user records changes by adding a new block to the database, allowing everyone who uses it to view all of the changes made. Every user is given public and private keys, which are used to encrypt the data they send.

Blockchains are globally dispersed networks that potentially contain millions of users. Every user has the ability to add information to the blockchain, and all data on the blockchain is encrypted (cryptography). Every other network member is in charge of ensuring that the data being added to the blockchain is accurate. This is accomplished through the use of a three-key system (private, public, and receiver’s key), which allows members to verify the data’s integrity while also validating who it came from. In regard to blockchain network architectures, there are three common types that are utilized:

  • Public architecture via permissionless access: networks that operate with members that are not trusted, which includes cryptocurrencies (such as Bitcoin and Etherium).
  • Public architecture via access permission: networks that specifically handle trusted members (such as Ripple)
  • Private architecture via access permission: networks that are exclusively open to members of a specific community, which would include FiberChain and Bankchain.

Key Things To Consider:

  • Bitcoin is involved in over $70 billion worth of illegal activities: Unlike other currencies, Bitcoin allows for rapid transactions while maintaining anonymity and security. Legacy official currency rates have no bearing on cryptocurrency prices. This has swiftly become the most popular method of anonymity in unlawful operations such as cybercrime and drug trafficking. Bitcoin aided $76 billion in unlawful business activities throughout the world, according to research conducted by the University of Sydney in Australia.
  • Every 14 seconds, there is a ransomware attack: An individual or corporation is thought to be the victim of a ransomware assault every 14 seconds. According to the 2019 Official Annual Cybercrime Report (ACR), the majority of these cyberattacks go undetected. The extent of ransomware susceptibility continues to grow, with a new user joining social media networks every 15 seconds.
  • Small businesses are the main targets: The majority of small firms believe they are “unlikely” to be targeted by hackers. According to Cybint estimates, two-thirds of businesses have been victims of social engineering, phishing, and DDoS assaults in the previous three years. Despite accounting for 13% of the cybercrime industry, small firms continue to be the lowest investors in cybersecurity.
  • Costs of cyber threats: The average cost of a cyber-attack data breach in 2019 was $3.92 million, according to the Security Intelligence Report. On the contrary, the cost of hacking is essentially negligible, with cyber-attack tools as little as one dollar on the Dark Web, with additional complementing services accessible for free. The fact that it takes an average of 5 minutes to hack an IoT device is even more disturbing.

How Does Blockchain Protect Information?

Some of the ways that blockchain protects data is by:

  • Tracking changes: Every update to a blockchain is tracked and checked in the database indefinitely. Nobody has the authority to modify existing data and claim it as valid.
  • Data backup in several locations: Many of the machines in a blockchain will download its data on a regular basis and save a copy locally. If data is lost or stolen, backups of the original data will be available from numerous sources.
  • Identifying an attack/error: Errors and attacks can be pinpointed since every change in data is logged, allowing you to pinpoint the exact moment when anything went wrong.
  • Identity theft prevention: Identity theft prevention: Each user’s private key is protected by powerful encryption technology, ensuring that no one may claim your information as their very own. Your data is authenticated by a computer rather than a human, which keeps hackers out.

Blockchain security fundamentals

By definition, a blockchain is distributed and repeatable. It is based on participant consensus and the most recent cryptographic advances. As a result, blockchain-based solutions are more secure than non-blockchain systems against cyberattacks.

The security of blockchain technology is based on three key factors: confidentiality, integrity, and availability (CIA Triad).

  • Confidentiality: The blockchain has a lot of features that ensure a user’s privacy. The only connection between a user and their data is through user keys. These keys, on the other hand, are simple to anonymize. Non-interactive zero-knowledge proofs are also used by certain networks to maximize user secrecy. As a consequence, while a blockchain is transparent and provides a wealth of transaction monitoring options, it also allows users to preserve an unparalleled amount of anonymity.
  • Data integrity: Blockchains are ledgers in which each block is connected to the blocks around it using cryptographic hash algorithms. As a result, once a transaction has been recorded on the blockchain, it cannot be changed or removed. Any modifications to previously recorded data are treated as new transactions.
  • Availability: Even if some nodes are offline, blockchain resilience is ensured by having a high number of nodes. Because each node in the network has a copy of the distributed ledger, even if one node is hacked, other peers can still access the correct blockchain.

History Of Blockchain Technology

The origins of the blockchain concept can be traced back to electronic money (Bitcoin). In a paper introducing the world to Bitcoin in 2008, Satoshi Nakamoto also outlined the blockchain technology that underpins the cryptocurrency. While Nakamoto’s paper concentrated on blockchain as a Bitcoin medium, several innovators have expanded on the notion to provide it other applications.

Where Else Is Blockchain Utilized?

Blockchains make our regular interactions with technology more accountable since they track data and keep it secure. Companies from many industries are figuring out how to make money using blockchain technology. Blockchain technology, in addition to facilitating Bitcoin transactions, also enables:

  • Transferring funds
  • Investing in stocks
  • Betting on sports
  • Governance
  • Supply Chain
  • Healthcare
  • Real estate
  • Business deals
  • Cloud Storage
  • Purchases made online
  • Internet of Things (IoT)

Major Sectors Benefiting From Blockchain Cybersecurity

Finance

The most significant advantage of a blockchain in the financial sector is its data immutability and transaction transparency. Keeping traditional digital or physical records is less transparent and safe than storing transactions on the blockchain. To preserve the security of consumer information, numerous financial institutions employ blockchains and, in particular, zero-knowledge range proof systems. To safeguard customer data, Q2, a virtual banking platform, employs blockchain and machine intelligence.

Many blockchain networks include smart contracts, which allow for the automated execution of agreements between many parties if all of the requirements are satisfied. Pledge agreements and deposits are common instances of such arrangements.

Healthcare

Healthcare firms, like the financial industry, may profit substantially from the use of blockchains for securely storing and efficiently sharing medical data. BurstIQ, for example, is a blockchain-based technology that enables healthcare organizations to securely store patient data and exchange it in real-time between departments and institutions.

A blockchain may also be used to provide secure messaging systems for quick and easy communication between patients and institutions in administrative and non-urgent medical matters.

Real Estate

Blockchains are being used by real estate platforms to solve two primary problems: assuring secure data storage and automating important operations like authenticating property ownership and transferring cash.

A blockchain permits property ownership and payment history to be kept immutable and transparent. This technology is used by StreetWire and ShelterZoom to make data administration easier for real estate companies.

A blockchain also provides stability and automation, both of which are critical for real estate enterprises to operate successfully. Smart contracts are used by companies like SMARTRealy and Propy to sell, acquire, and rent real estate. Smart contracts ensure that agreements between several parties be executed quickly, securely, and completely automatically.

Supply Chain

Blockchains are being used by global corporations such as Walmart, BMW, and FedEx to improve data security and operational transparency. To facilitate the examination of a supply chain’s efficiency and operations, a blockchain may contain tamper-proof records of all activities, transactions, and freight data.

Asset authentication may also be done using blockchain systems. Organizations are moving their attention away from centralized authority and toward trust models based on algorithms, according to Gartner. The blockchain is a great illustration of this type of setup.

Governance

Many government activities, including tax collecting, information governance, elections, and so on, can benefit from blockchain technology. Cartena, a blockchain-based platform for assessing government expenditure, is used by the Canadian government.

A blockchain can be used to speed up vote counting and assure the accuracy of election results in the case of elections. Tampering with electronic voting on a blockchain becomes very impossible due to the immutability of all data records. Maintaining the anonymity of a voter’s decision while authenticating their identity, on the other hand, maybe difficult.

How Do Blockchains Get Formed?

A block is formed by a confirmed piece of data, which must then be added to the chain. To do so, blockchain users must use their unique keys as well as powerful processing resources to perform algorithms that solve extremely difficult mathematical problems. When an issue is solved, the block is added to the chain, and the data it contains is permanently stored on the network, meaning it can never be changed or removed.

How Does The Data Get Updated?

To make changes to a specific piece of data, the owner must place a new block on top of the old block, producing a very specialized code chain. If anything changes, even if it’s just a comma, the entire chain across the network changes as well. This means that every update or update to any piece of data is tracked, and no data is ever lost or erased since users can always compare prior versions of a block to see what has changed in the newest version. This detailed record-keeping allows the system to easily recognize blocks with inaccurate or erroneous data, reducing data loss, harm, and corruption.

Blockchain Usages For Cybersecurity

Blockchain has grown into one of the most failsafe systems of dealing in the digital network space, while not being indestructible. The technology has been praised for its ability to ensure information integrity when used as intended. Many industries can gain from it if it is properly implemented. Blockchain may be used in a variety of ways because it has the potential to be useful in a variety of situations. One of the ideal applications would be to employ its integrity assurance in the development of cybersecurity solutions for a variety of different technologies. Here are a few examples of how blockchain might be used to improve cybersecurity in the future:

Peer-To-Peer Sharing, Recordkeeping, and Decentralized Storage

Another feature of blockchain users is their ability to save all of the data in their network on their computer if they choose to. As a result, two things happen. They can earn money by renting out their “excess” storage space, and they also ensure that the chain does not collapse. If someone who is not the owner of a piece of data, a hacker, tries to tamper with a block, the entire system analyzes every single block of data to locate the one that is different from the others (or from the majority). If the system encounters such a block, it simply removes it from the chain and marks it as false.

There is no central authority or storage site since blockchain technology is intended in this way. Every user on the network contributes to the blockchain’s storage in some way. Everyone is responsible for double-checking the data they save and/or distribute to ensure that no fraudulent data is added and no current data is deleted.

Data Theft And Fraud Prevention

Blockchain technology is one of the most effective technologies available for protecting data from hackers, eliminating possible fraud, and reducing the risk of data theft or compromise.

A hacker would have to erase the data saved on every user’s computer in the worldwide network to destroy or corrupt a blockchain. Millions of computers might be involved, each holding a copy of some or all of the data. Undamaged machines, commonly known as “nodes,” would continue to run to verify and maintain track of all the data on the network unless the hacker could bring the entire network down at the same time (which is nearly impossible). With the number of users on a network, the impossibility of a job like bringing down a whole chain grows.

Bitcoin, like other cryptocurrencies, is based on blockchain technology. The entire blockchain is stored on a massive computer network. As a result, no one has influence over the course of history. Assume a person learns Cryptocurrency-related information from some specific source, buys bitcoins, and sends bitcoins to another user. So, what would happen next? The Bitcoin blockchain’s computers scramble to verify the transaction’s correctness. This phase verifies all of the previous steps in the chain. As a result, no one can travel back in time and change anything. As a result, tampering with the blockchain is difficult.

Because of its intricate structure, blockchain technology has the potential to be the most secure method of storing and transferring data online that we’ve yet discovered. As a result, inventors have begun to use the technology in a variety of industries to avoid fraud and improve data security.

Users may utilize VPN technology to hide their original IP address and fake their internet locations, making Blockchain transactions even more secure. Users may safeguard their data using the finest VPN (such as NordVPN) for anonymity, ensuring that third parties cannot trace their online activity.

Preventing DDoS Attacks

Distributed Denial of Service (DDoS) assaults work on a simple yet effective basis. Hackers can launch an assault using a variety of methods, including delivering a flood of spam requests to a website, which increases traffic until the site can no longer handle it. The onslaught continues until the site becomes overburdened and crashes. DDoS assaults have been increasingly common in recent months, hurting larger organizations such as Twitter, Spotify, SoundCloud, and numerous others.

The existing Domain Name System (DNS) is the source of the current difficulty in preventing DDoS attacks. DNS is an Internet phone book that functions as a somewhat decentralized one-to-one mapping of IP addresses to domain names. This technology converts human-readable domain names (such as youtube.com) into machine-readable IP addresses (a bunch of numbers).

Because it is still partially decentralized, hackers may still attack the centralized element of DNS (the one that keeps the majority of data) and crash one website after another.

How would blockchains prevent a DDoS attacks?

Implementing blockchain technology would completely decentralize DNS, dispersing its information over a huge number of nodes and make hacking practically difficult. Domain editing privileges would only be allowed to those who require them (domain owners), nor could any other user make any changes, minimizing considerably the danger that non-authorized parties may access or modify data. A system can assure that it is invulnerable to hackers by employing blockchains to secure the data unless every single node is wiped clean at the same time.

If existing DNS were to be used in blockchains, people could still register domain names but their domain name could only be modified by approved owners. Because the data is kept on many distinct nodes and every other user on the network has a copy of all the data on the blockchain, hacking or destruction would be almost difficult.

Securing Private Messaging

People are increasingly using social media as the internet shrinks the world into a global village. In addition, the number of social media channels is growing. As conversational commerce becomes more popular, more social applications are being released every day. During these exchanges, massive volumes of metadata are captured. The majority of social networking platform users utilize weak, unreliable passwords to safeguard their accounts and data.

Most messaging firms are turning to blockchain as a better alternative for safeguarding user data than the end-to-end encryption they presently utilize. A uniform security protocol may be created using blockchain technology. Blockchain may be utilized to provide a single API architecture for providing cross-messenger communication capabilities.

Several assaults have recently been carried out against social media sites such as Twitter and Facebook. Millions of accounts were compromised as a result of these assaults, with user information falling into the wrong hands. If blockchain technology is properly deployed in these messaging systems, further hacks may be avoided.

IoT Security

Edge devices, such as thermostats and routers, are increasingly being leveraged by hackers to gain access to larger networks. With the current infatuation with Artificial Intelligence (AI), hackers have found it simpler to get access to overall systems such as home automation via edge devices such as “smart” switches. A substantial majority of these IoT gadgets, in most situations, have shaky security features.

In this situation, blockchain may be utilized to decentralize the management of such large-scale systems or devices, therefore securing them. The method will provide the gadget with the ability to make security judgments on its own. By recognizing and responding to questionable requests from unfamiliar networks without relying on a central admin or authority, the edge devices become more secure. Hackers often get complete control of devices and systems after breaching the device’s central administration. Blockchain assures that such assaults are more difficult to carry out by decentralizing such device authority schemes (if even possible).

Provenance Of Computer Software

To avoid foreign interference, blockchain may be used to secure the integrity of software downloads. Blockchain, like MD5 hashes, may be used to validate actions like firmware upgrades, installers, and patches to prevent malicious software from infiltrating systems. New software identities are compared against hashes accessible on vendor websites in the MD5 scenario. Because the hashes provided on the provider’s platform may already be corrupted, this approach isn’t fully failsafe. The hashes, on the other hand, are permanently stored on the blockchain in the case of blockchain technology. Because the information stored in the technology is immutable, blockchain may be more effective in checking the integrity of software by comparing hashes to those on the blockchain.

Verification Of Cyber-Physical Infrastructures

The integrity of information created by cyber-physical systems has been harmed by data manipulation, system misconfiguration, and component failure. The capabilities of blockchain technology in terms of information integrity and verification, on the other hand, might be used to verify the state of any cyber-physical infrastructure. The information supplied by blockchain about the infrastructure’s components can be more reassuring to the whole chain of custody.

Data Transmission Protection

In the future, blockchain might be used to restrict illegal access to data in transit. Data transmission may be safeguarded by utilizing the technology’s comprehensive encryption function to prevent bad actors, whether individuals or organizations, from gaining access to it. This strategy would result in an overall enhancement in the trustworthiness and integrity of data communicated over blockchain. Hackers with malevolent intent intercept data in transit in order to change or entirely erase it. Inefficient communication routes, such as emails, are left with a significant gap.

Decrease Human Safety Adversity

Unmanned military equipment and public transportation have lately been introduced as a result of new technical breakthroughs. The Internet simplifies the flow of data from sensors to remote-control databases, making these autonomous vehicles and weapons viable. Hackers, on the other hand, have been working to get into and obtain access to networks such as the Car Area Network (CAN). When hackers get access to these networks, they gain total control over crucial automobile operations. Human safety would be jeopardized as a result of such events. Many hardships might be avoided by doing data verification on blockchain for every data that enters and exits such systems.

Pros and Cons For Blockchain Cybersecurity

Although the blockchain has great potential as a measure of cybersecurity, this technology has several concerns. Let’s look carefully at the main downsides of your blockchain before you decide to increase the safety of your solution using this technology:

Cons for blockchain cybersecurity:

  • Challenges of scalability: Blockchain networks have many constraints, for example, the capacity of blocks and the number of transactions per second. You must thus verify the scalability of a blockchain platform that you wish to employ as a base. These limitations now amount to 1MB of data for Bitcoin and up to 7 transactions per second (TPS). Block production is restricted to 7 to 15 TPS in the Ethereum network. However, some networks claim to have a far greater capacity for transactions. For example, Ontology promises to attain between 4000 and 12,000 TPS depending on the environment, whereas in laboratory testing the Futurepia network may measure up to 300,000 TPS.
  • Dependency on private keys: Private keys, which are lengthy sequences of random integers produced automatically by a wallet, are used in blockchains. In contrast to user passwords, private keys are used to communicate with the blockchain and cannot be recovered. If a user’s private key is lost, all data encrypted with it is very certainly lost forever.
  • Adaptability concerns: Despite the fact that blockchain technology may be used in practically every industry, businesses may have difficulty incorporating it. It’s difficult to use this technology in supply chain systems, for example, because re-implementing supply chain logic using a blockchain might take a long time. Companies should examine this before deploying blockchain technology since blockchain applications may need the total replacement of old systems.
  • Probabilities of intrusions: Although blockchain technology minimizes the danger of hostile interference, it is not a cure-all for all cyber dangers. Node connectivity, consensus procedures (the 51% assault), and code vulnerabilities are all flaws in the blockchain. If attackers are successful in exploiting any of these flaws, the entire system’s security may be jeopardized.
  • High operation and customization costs: A blockchain system need a lot of computational power and storage space. In comparison to existing non-blockchain systems, this might result in greater marginal costs.
  • Blockchain literacy: Despite the growing popularity of blockchain technologies, skilled blockchain developers and cryptography specialists are still in short supply. Blockchain development necessitates a diverse set of abilities as well as a thorough understanding of various technologies, programming languages, and tools.
  • Minimal/lack of governance: Globally, the operation and usage of blockchain technology in general, and distributed ledgers, in particular, are unregulated. Many nations, notably Malta and the United States, have already enacted or are in the process of enacting cryptocurrency rules. Several states in the United States have also enacted legislation governing the legal and commercial usage of blockchains and smart contracts.

Pros for blockchain cybersecurity:

  • Secure data storage and processing: Any modification recorded on the blockchain is visible and non-removable, and blockchain records are immutable. As a result, data saved on a blockchain is more secure than data saved on traditional digital or physical records.
  • Safe data transfers: The blockchain allows for quick and secure data and financial transactions. Smart contracts, for example, allow for the automated implementation of agreements between several parties.
  • No single point of failure: Blockchain technologies, without permissions, are more robust than traditional systems because they are decentralized. The functioning or security of the blockchain will not be harmed if a single node is compromised. This implies that even if the system is subjected to DDoS assaults, the system will continue to function normally as a result of numerous copies of the ledger. Private blockchains, on the other hand, cannot provide you with this benefit.
  • Data transparency and traceability: All blockchain transactions are digitally signed and time-stamped, allowing network users to readily trace transaction history and follow accounts at any point in time. This capability also helps a corporation to have accurate asset or product distribution information.
  • User confidentiality: Because users are authenticated using public-key cryptography, the secrecy of blockchain network members is excellent. Some blockchain-based firms, on the other hand, take this technology a step further and enhance it. Guardtime, for example, created a Keyless Signature Infrastructure (KSI) that allows users to check the authenticity of their signatures without revealing their keys.
  • Increase in customer trust: A blockchain can help firms achieve consumer confidence by providing data privacy and transparency. Furthermore, in many of today’s blockchain networks, data owners may have complete control over their personal information and select who and when may access it.

Future of Cyberattacks & Malware

Cyber-attacks are being incubated by the present rapid growth in technology, which allows them to become more complex and executable. With the introduction of the game-changing fifth-generation (5G) networks, which provide 10 times quicker download rates, hackers will undoubtedly have additional options. Faster speeds will raise the possibility of more devices being hacked and greater cyber-attacks being carried out.

The Internet of Things (IoT) has a sizable business market. Almost everything is being equipped with internet-connected sensors, from furniture to utility equipment. According to Gartner, the number of devices linked to the internet will expand from 14 billion to 25 billion by 2021. The majority of these new technologies have unreliable security mechanisms, which attract hackers. Additionally, home automation capabilities may make more houses exposed to criminal cyber-attacks.

Innovative Usage For Blockchain Technology

With more people and technology developing on the world wide web, more data is created and more hackers are trying to steal or alter this data. blockchain technology is adaptable and extremely important for the Internet’s future, enabling users to safeguard their information better.

Blockchain technology has already been used innovatively and can be very valuable to enhance cybersecurity in other domains beyond cryptocurrencies. By using stringent encryption and distribution mechanisms throughout a network, any company may assure that its information is safe and unreachable to hackers.

Conclusion

Due to dependable data encryption technologies, data integrity, network resilience, and scalability, the blockchain provides a wealth of options for maintaining a high degree of data security. As a consequence, firms in practically every industry can benefit from migrating from a traditional system to a blockchain-based one.

When adopting a blockchain to enhance the cybersecurity of their goods, however, enterprises should be prepared to cope with a variety of downsides and challenges, just as they do with any new solution. The use of private keys, adaptation concerns, and a lack of competence are all major obstacles.

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