Top 5 blockchain technology security issues and challenges with the solutions
Blockchain is the leading computer technology, sometimes referred to as distributed ledger technology (DLT). The Blockchain is a technology which uses decentralization and cryptographic hashing to make the history of any digital asset unalterable and transparent.
Blockchain avoids any single point of failure by distributing data or ledger across several computers. The cryptographic proofs and consensus mechanisms make Blockchain almost impossible to hack, which is why Blockchain is inherently secured. That means Blockchain security issues do not exist! Well, that’s not true. Instead, Blockchain has its own specific set of issues, which can be destructive to your business if not addressed carefully. Here are the top five blockchain technology security issues and their most accurate solutions.
5 Blockchain security issues and their solutions
1. 51% Attacks made users lose $20 million
51% attacks are one of the foremost Blockchain security issues due to which hackers walked away with more than $20 million last year. In 51% attacks, several malicious entities access the majority stakes of a blockchain’s hashrate. By gaining the majority control of hashrate, the hackers can reverse the transactions and execute double-spending. It further prevents other miners from confirming blocks. Several high-profile cryptocurrencies were victims of 51% attacks, making it the top-notch security threat for Blockchain technology.
The solution to eliminating 51% attacks security issue
- Is your Blockchain using a Proof of Work (POW) consensus mechanism? Take advanced security measures to avoid 51% attacks.
- Be vigilant of mining pools.
- Implement merged mining on a Blockchain with a higher hashrate.
- Switch to a different consensus mechanism.
2. Exchange hacks – Users lost $900 million last year
Exchange hacks are another security threat for Blockchain and one of the most preferred techniques used by hackers worldwide to steal the cryptocurrency. Cryptocurrency exchanges are becoming a favorable hotspot for hackers due to massive crypto holdings and poor security practices. Moreover, the exchange platforms are innately centralized, which obsolete the decentralized benefits of Blockchain. 2019 has witnessed a loss of $900 million due to exchange hacks. In 2014, Mt. Gox was an exchange leader who used to process nearly 70% of the exchanges, and in the same year, the hacker stole approx $473 million (8,50,000 BTC) due to exchange hack security issues.
Solutions to prevent exchange hack security threat
- Store your funds through either a hardware or paper wallet.
- Use methods that have minimal online touchpoints to keep your coins out of reach from online hackers.
- Use decentralized exchange (DEX) for regular trading as it allows you to trade directly from your cryptocurrency wallet.
3. Social engineering – A security threat, the culprit for losing $3 million last year
Social engineering is yet another security threat to Blockchain technology. It is executed in different forms by hackers with a single goal to obtain your private keys, login information, or directly steal your cryptocurrency. The most common hacking technique in social engineering is phishing, which involves sending you an email, message, or setting up a website or social media account that imitates a company brand you trust. In social engineering, the hackers will create a sense of urgency on email, asking you for sensitive information. Once you handover them the details, they will wipe out your account. Never get lured by any offers before checking the authenticity of the source. In 2018 alone, the users lost approximately $3 million to hackers due to social engineering security issues.
Solutions to avoid social engineering Blockchain security issues
- Never send anyone your login credentials or private keys.
- Arrange a training program for your employees to teach them how to spot the social engineering trap.
- If you receive a deal that is too good to be true, most likely it’s a trap.
4. Software flaws – Bugs were the reason for the $24 million loss
Some of the biggest names in the blockchain world have proved that they are resilient to bugs and attacks. However, the apps build on these platforms are still prone to bugs. In 2019, the users lost over $24 million due to software bugs in wallets and decentralized apps (dApps). To protect the app from software flaws, they should undergo rigorous training and reviews. The other way includes penetration testing, smart contract audits, and code reviews to minimize the effects of software flaws and bugs.
Solutions to avoid software flaws
- Make sure that your blockchain-based software is gone through a thorough third-party security audit.
- It has an open-source code that can be quickly reviewed for flaws and loopholes.
- Additionally, create your own set of security practices to catch bugs and other software flaws.
5. Malware attacks that could even shut down your company’s servers
Besides, social engineering has other types of malware that can create malicious crypto mining software and lead to shut down your company’s servers. The malware most associated with Blockchain or cryptocurrency is Cryptojacking, which is often unnoticed and takes over the computer resources to mine cryptocurrencies. It can cause performance issues, increases electricity usage, and is vulnerable to other hostile & unauthorized codes. Although, Cryptojacking doesn’t directly steal the money, but indirectly the victims lost nearly multi-millions of dollars because of cryptojacking and other such malware.
Solutions to avoid malware attacks
- The ultimate solution is to be vigilant for malware attacks and prevent it from damaging your financials.
- Also, if you notice any performance issue on your computer, then check whether any mysterious program is running in the task manager.
- Avoid clicking on any suspicious links.
- While operating any website, always scan it to ensure that it has not been infected by malware.
Stay up-to-date with Blockchain security solutions
These five issues are also the topmost reasons for investors losing out their cryptocurrencies to hackers. However, the list is beyond these five threats causing multiple-million dollar loss every year, restricting the industry from developing to a large scale. Deploying a strategy to tackle these Blockchain security issues is also most vital as the hackers keep updating their tactics to sneak out to your crypto account.
Therefore, you must also keep yourself up-to-date with the latest Blockchain security measures to prevent any chance of getting hacked. So, do not just adjust with what’s happening around, instead adapt and accommodate the newest blockchain security trends.
For any help related to Blockchain security issues, put a ring at Blockchain support number and get your queries resolved.