Internet Security and management of private data by whales of the tech world has put a big question mark on the legitimacy of claims made by these tech giants.
The recent congressional hearing of the Google CEO Sundar Pichai didn’t help the cause.
So, what is the most secure platform which can be trusted to keep users private data safe and does not distribute the rights to the people who bid the highest price?
Blockchain Technology has always been promoted as the trustworthy and decentralized system which could be the answer to all security flaws within the current internet systems.
Whenever we come across the new development where one or the other by-product of internet revolutions is caught manipulating the user data, we tend to look towards blockchain.
So, How Safe and Unhackable is Blockchain Technology?
We will try to analyze every aspect of the relatively new technology critically and bust some myths over its claims of being tamper proof and unhackable.
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Blockchain is not Immune to Cyber Attacks
The Blockchain pundits would tell you that the technology is fool-proof and there is no way one can tamper with it.
But, Always remember it’s not the Technology that is the Problem, it’s the People around it. Any Tech, old or new has several Weak Points, and Attack Vectors and Blockchain is no different.
We will dive deep into the short history of cryptocurrency and see what attack vectors were most prominent or came close to busting the myth about ‘unhackable‘ blockchain technology.
1. Sybil Attack
Blockchain Technology is considered superior because of its distributed ledger or nodes, where every node verification is dependent on the previous one. However, Sybil attack burst the bubble for those who think distributed ledger = tamper-proof technology.
In the case of a Sybil attack, a vast amount of the total nodes are owned by a single party, who can use the accumulated nodes to manipulate the network. The holders can flood the node with false transactions or disrupt the real transactions through block manipulation.
The good news is, Sybil attacks exist only in theory as of now, and its chances of becoming a real-world issue are far-fetched.
Generally, crypto operators use Proof-of-Work (PoW) to avoid any Sybil attacks. PoW requires mining power for earning tokens and even verifying nodes. The energy consumption for mining is quite high, so it kills the possibility of multiple node manipulation.
2. Routing Attack
Blockchain network might be decentralized through distributed nodes, but running a node requires internet services.
Routing attack draws our attention towards a factor which nobody seems to be worried about, the role of ISPs in running a node.
It is true that a node can be run anywhere in the world, but what nobody would tell you is 13 ISPs host 30% of the Bitcoin network, while 3 ISPs route 60% of all transaction traffic for the Bitcoin network.
If someone from inside decides to take control over the network through ISP, there are excellent possibilities of their success.
A routing attack takes place by intercepting the signals being sent by two autonomous bodies. This is quite a common occurrence in the internet realm, and the day is not far when the same thing occurs on the crypto network.
3. Direct Denial of Services
Direct Denial of Services (DDoS) is one of the easiest ways of halting a network.
The operations are quite simple where, many hackers or programmes send a ton of lousy network requests, which jam the system and prevent the authentic messages from reaching the server. These attacks are known to cripple any network or crash it down for some time.
Major cryptocurrency networks such as Bitcoin are always under the DDoS attack.
However, the developer team had made enough arrangements to scale down the impact. However, in case of a successful DDoS attack, there won’t be any threat to the user’s fund or security.
4. The Majority Attack
The blockchain security is directly dependent on your computer’s power efficiency, and hackers can get access to computers easily.
The control over the computer systems would mean dominance over the hash power. This would allow the attackers to mine blocks much faster than the rest of the network which can open the doors for double-spending, a very complicated yet significant form of attack.
However, chances of pulling off such a majority attack would be futile.
Since the upper hand on the hash power can be pulled for low threshold coins. Trying to attack a network like Bitcoin would prove expensive as the person executing the attack might use the superior hash-power to mine bitcoins rather than manipulating the network
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5. The Infamous DAO Attack
All the attacks mentioned above are either hypothetical or too complex to pull off.
However, there is one instance where a hacker exploited a small error on the Ethereum network to dupe millions.
Decentralized Autonomous Organization (DAO) was built over the Ethereum network through smart contracts. The new project allowed the users to invest in a new project and vote on its decision secured via smart-contracts.
The process was simple; one needs to buy DAO tokens and then make the investment as per their will. If you want to pull out of the project, you submit the DAO token and get ethereum in return. The process was called ‘split return.’
The recovery was a two-step process where the proper amount of ethereum token was returned to the token holder and then take back the DAO tokens and register it on the blockchain, to maintain the DAO balance sheet.
The anonymous hacker saw that vulnerability in the process and realized that he could trick the system into repeating the first step without finalizing the second part. This attack led to a total loss of $50 Million.
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Most of the attacks mentioned above are more of vulnerabilities than a power threat.
However, the cost or expenses are very high compared to the outcome. The system is robust and safe; it’s the people around it who pose as the primary threat.
People often confuse the attacks on exchanges as the attack on the network. The blockchain network is perfectly fine at the moment, but the exchanges, wallets and third-party service providers pose the real threat. The Blockchain Technology is sound, people need to be more educated of vulnerabilities and be vigilant. A phishing scam taking all your bitcoin is not a threat to the bitcoin network, but you.
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