Guide About 4 Security Threats to Blockchain Networks

Two of the most critical topics in the tech world right now are blockchain and cryptocurrencies, and their popularity doesn’t appear to be fading any time soon. Even if you are aware of and have made investments in blockchain-based cryptocurrencies like Bitcoin or Ethereum, you could be shocked by the seriousness of the security risks to these networks.

You need to be aware of the security risks associated with blockchain networks if you’ve invested in a blockchain coin or intend to engage with them in any way. We do not want to suggest that you buy any blockchain-based cryptocurrency; instead, we want to raise awareness of the frequently disregarded security problems that blockchain networks face.

Are Security Threats a Concern for Blockchain Networks?

Decentralization, anonymity, and cryptography are the three core principles on which blockchain networks are based. Network nodes use consensus techniques to carry out network transactions safely rather than a single controlling body administering the database.

Despite having a transparent, immutable digital ledger, Blockchain technology has its challenges. Blockchain networks are susceptible to many different kinds of security risks, and this can involve cyberattacks that financially harm the blockchain or defraud blockchain users.

51% Attack

The preservation of blockchain networks—the inability to change or delete records once they have been created—may be one of its most significant features (at least theoretically). Decentralized blockchain networks are dependent on the approval of the majority of miners. A transaction is authorized and posted to the blockchain if it receives a 51% vote. In a blockchain network, 51% of the votes corresponding to 51% of the computing power.

In a perfect world, we wouldn’t need to be concerned about a bad hacking gang seizing control of 51% of the blockchain. But what if they were planning to cause financial havoc on the blockchain network if that were to happen?

In such a scenario, the malicious hackers holding at least 51% of the mining power could carry out unauthorized transactions, undo previously completed transactions, double-spend, and reject any legitimate non-malicious transaction. As you can expect, this would expose the blockchain to financial risk.

Routing Attacks 

Routing attacks rely on taking advantage of fundamental flaws in the infrastructure supporting internet routing. An attacker can use a routing attack to divide a blockchain network into two different networks. Since the attacker is a bridge between the two divisions, all network traffic passes via him. When the attack is finally stopped, the blocks inside the smaller partition will all be deleted, causing transactions to be dumped and repudiating any mining rewards. This forcefully builds parallel blockchains.

Blockchain User Endpoint Vulnerabilities

Blockchain networks are susceptible to security gaps in user-interface devices like desktops, tablets, and smartphones, just like any other online transaction service. An attacker trying to access your blockchain wallet might follow your online behavior round-the-clock or use malware to examine your files for your wallet’s private key.

It’s crucial to keep your private key for your crypto wallet encrypted and avoid saving it as a plain text file. Additionally, running safe antivirus software that guards against spyware is always advised.

Sybil Attack

An example of a Sybil assault is a 51% attack. In most cases, these attacks entail the attacker setting up fake dummy nodes on the blockchain network, which they can use to acquire a 51% majority and execute destructive transactions. Blockchains frequently use consensus algorithms like Proof of Stake (PoS) and Proof of Work (PoW) to lessen the likelihood of Sybil attacks.

Even though these protocols don’t wholly prevent Sybil attacks, they make them exceedingly challenging because it costs a lot of money to purchase the gear needed to launch a significant Sybil assault on a PoW or PoS network.