The issue of trust is derailing the mass adoption of blockchain technology. With promising features of speed, security, and open-sourced ledgering system allowing for peer-to-peer transactions, a host of industries acquired blockchain’s digital mechanism to blend with the nature of a variety of businesses with its capacity to store, process, and transfer big data and automate actions. Without really attacking their physical warehouses and carting away highly-valued goods, which is a very hard thing to do, thieves, robbers, hackers, fraudsters, scammers, vandals, impostors, manipulators, cybercriminals, and what-have-you’s, made cyberspace their favorite platform of attack. Blockchain-based businesses and industries became attractive to attacks, losing capitals and revenues in accumulated billions, which are impossible to trace or recover.
Hypothetically speaking, if a miner or group of miners collaborate to control more than 50% of the blockchain network, they will be able to manipulate it by double-spending the coins or add new transactions without ever spending. But carrying a 51% attack is too costly that it would require a huge amount of electric consumption and high computing power to be successful, which, in the end, is not worth the while.
Phishing is a mirroring fraud where victims are sent emails or contacted by phone or text message posing as some credible firm to waylay them into revealing sensitive personal information such as passwords, credit card and banking details on their mimic links. Sometimes the victim’s computer is used as a host to mining cryptocurrency illegally.
Sybil is a book character with a dissociative identity disorder, after whom this web attack is named after. Attackers create multiple false identities representing various nodes. When launched together at the same time, it will swarm the peer-to-peer network and crash the system.
Blockchain technology involves real-time uploading and downloading huge volumes of data that attackers take advantage of intercepting these data by partitioning the system transfer without interrupting it to cart away currencies without causing notice.
Blockchain technology operates on the Internet through a digitized, decentralized, and distributed ledger whose basic means to security is its encrypted methodology in verifying transactions between parties. Any unusual operation is then quickly flagged and detected.
Encryption protects the digital wallet by providing its owner a unique, mathematically-generated encrypted key for access called a “hash.”
Mining is another complex security feature which is responsible for preserving the integrity of the blockchain. After solving a difficult mathematical problem, miners can add blocks on the chain after verifying transactions, for which they are rewarded cryptocurrencies.
Immutability is the most critical security component of blockchain, wherein any data that is entered and confirmed will never be tampered, censored, or erased from the platform.
Two-Factor Authentication. 2FA, as it is called is also known as Two-Step Verification, where another layer of security is added to the wallet. Besides the wallet key, there is also a one-time password, or OTP, produced at once before access to the wallet is granted. It is a good measure to counter key thefts and phishing scams where they break through the first step but would not be able to forge ahead without the OTP.
Anti-Phishing Software. This specially-designed software is programmed to trace malicious links, fake websites, email threats and then withdraws any access. It also has the ability to verify web addresses en masse and can also approve legit links and websites, thereby protecting users from any form of phishing threats, common or unknown.
Cold Wallets. Hot wallets are a lot common and free. Cold wallets, on the other hand, are used offline in the form of a user device, and, therefore, are not prone to hacking. Unlike hot wallets which are vulnerable to attacks as it is connected to the Internet.
Blacklisting. Frauds have repeated patterns by their use of ICOs, inquisitive key entries, and phishing styles, and, therefore, identifiable. Individuals and companies are certainly protected from these attackers by blacklisting them.
Inevitable in the new normal standards of a post-COVID world will be the popular use of digitized systems powered by blockchain technology. It is but imperative that security must be prioritized to cover all loopholes arising for the ideal functioning of such digital innovations. Users and consumers must be protected at all costs to ensure the integrity of all blockchain-based services.
When trust is gained, mass adoption will follow.
eQapital is a financial technology company employing blockchain security strategies for our clients’ peace of mind. We also empower you to take charge of your financial future with the different instruments available at your disposal. At your service 24 hours a day, give us a call now, and we will tell you how it is done.