5 Blockchain Security Issues in 2020

by Brina V 22 days ago in smart contract

Blockchain technology is the technology of the future and rightly so, for the long list of incredible features it possesses. In this article, we have discussed the five main security issues blockchain technology is facing in 2020.

5 Blockchain Security Issues in 2020

Blockchain technology is the technology of the future and rightly so, for the long list of incredible features it possesses. No wonder that the sector is rising, but so are its risks. Although blockchain-inherent security features make decentralised ledger technology resistant to attack, they do not render it immune. In this article, we have discussed the five main security issues blockchain technology is facing in 2020.

Endpoint vulnerability:

Anyone familiar with the technology of blockchain in Australia will vouch for the layers of security it provides for its data. All the information is permanent once entered into a blockchain-based ledger. Moreover, in order to access a blockchain, one needs a public as well as a private key. Without these two, the data, if retrieved by someone other than the owner, cannot be read. So hacking is pretty pointless at the “chain” level.

Hackers, however, have evolved their strategies with the evolution of blockchain security. Instead of attacking the chain, they steal the keys from users at the endpoint level and then they can practically become the owners of the data in a blockchain. Endpoints are the mobiles or computers that you use for the input and output of the data, which cannot come under the protection of blockchain. Hackers aim to steal the keys whenever they are entered, displayed, or stored unencrypted to an Android or Windows device that is susceptible to malware.

  • How to solve:

The way to solve this issue is simply protecting yourself against already existing malware. This includes running virus scans regularly with a reputed antivirus program, never storing blockchain keys in a text file, word document, or other files where they can be easily read by unauthorized people, or at least using a reputed encryption program to save them. You should also never share your keys over the internet using any medium but the email feature of your blockchain wallet which can protect your data with blockchain security.

Vendor risks:

As distributed ledger technology gets popular, integrating blockchain technology into the system of an organisation also becomes widespread. Many companies are relying on third-party vendors for this purpose which makes the security of their own systems entangled with the security of the vendors’ systems.

Unfortunately, it is not uncommon for the vendors to have weak security, flawed code, and even personnel vulnerabilities in their systems - which can put the organisation that hired them at risk. This is a bigger issue when the vendors use smart contracts, which controls the entire operation of the organisation.

  • How to solve:

To resolve this, a thorough background search on the vendors before using their applications is required. Reputation and experience of the company itself, or at least of the makers of the applications, play the biggest role in this.

Not enough data for full-scale application:

Blockchain technology theoretically is scalable and secure even at a huge scale. However, for any technology, there is always a risk of system failure. Solving a problem in reality is only possible when it actually occurs. Financial Stability Oversight Council (FSOC), a US government organization, looks at this as a plausible vulnerability of the blockchain system, along with the majority attack (aka 51% attack) when a larger number of participants of the chain conspire against the others.

  • How to solve:

The way to prevent the risk of the unknown in blockchain in Australia is for every member of a blockchain community to honestly follow the protocols. Even so, smart contracts in 2020 are designed well enough to avoid such a scenario.

Experimental code:

Even though blockchain technology has been around for over a decade, the codes are still at an experimental level. On the other hand, with the pressure to be the first to release applications, developers sometimes let out insufficiently tested code on live blockchains. The threats are also greater because of the irreversibility of the technology, considering the decentralised model of several blockchain solutions.

  • How to solve:

The only solution to this problem is heavy independent testing together with large scale peer-review of the codes before they go out in the market, especially since they will be dealing with a sensitive matter like money.

Lack of regulation:

Many central bodies still ban blockchain technology or don’t pay much attention to a decentralised application. So when someone does fall victim to a criminal activity while using blockchain technology, they cannot get the support of the judiciary system, preventing the technology to be adopted at a large scale or be researched.

  • How to solve:

Blockchain in Australia has been the pioneer in resolving this issue as the government got involved by opening its doors to blockchain adaptation and research with full government support. We are hopeful that in 2020, when we have faced enough troubles because of a centralised system, other countries will soon follow suit.

Conclusion

It is always highly recommended to take help from a blockchain security professional when you are planning to use the technology. An expert not only can protect you from making a wrong choice, but he/she can also provide you with knowledge and guidance about the technology to make better use of it.

smart contract
Brina V
Brina V
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Brina V

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