Blockchain technology security of cryptocurrencies: current state, issues, and possibilities

Abstract

In the modern era of technology, blockchain has drawn a lot of interest from many fields. It has a broad range of applications, from social services to finance, and has had a significant impact on the developing business world. Because blockchain technology is becoming more integrated into e-commerce businesses, cryptocurrencies are becoming much more common. A couple of these digital currencies that have made use of blockchain's decentralised features are bitcoin and ethereum. A distributed database system with immutable ledgers, like blockchain, can be thought of as being vulnerable to attacks by bad users. Although the benefits of blockchain have been utilised from the first digital currency to the current smart contract, the cutting-edge technology still depends on cryptography for security.There are numerous papers that focus on the security and weaknesses of blockchain, but there is a lack of a thorough and scientific evaluation from both the application and technical perspectives. The writers of this survey essay discuss a variety of blockchain-related topics, such as its taxonomies and the circumstances in which each category of blockchain should be used. The writers also emphasise the blockchain's architecture and how the bitcoin network's active transactions function. The authors also detail several subcategories of consensus protocols, smart contracts, forks, and methods for achieving consensus. There is also discussion of a thorough taxonomy of blockchains, their properties, and related real-world applications.There are numerous papers that focus on the security and weaknesses of blockchain, but there is a lack of a thorough and scientific evaluation from both the application and technical perspectives. The writers of this survey essay discuss a variety of blockchain-related topics, such as its taxonomies and the circumstances in which each category of blockchain should be used. The writers also emphasise the blockchain's architecture and how the bitcoin network's active transactions function. The authors also detail several subcategories of consensus protocols, smart contracts, forks, and methods for achieving consensus. There is also discussion of a thorough taxonomy of blockchains, their properties, and related real-world applications.

Introduction

The irreversible public ledgers that are created via decentralised methods and typically lack a dependable authority are referred to as blockchain technology. This amazing method was used to pave the way for the emergence of cryptocurrencies, which allowed for the decentralised trade of digital assets. A number of digital currencies, including Ripple, Bitcoin, Litecoin, Ethereum, etc., have since appeared. Without the need for a centralised authority, entities were able to conduct financial transactions thanks to blockchain and the associated cryptocurrencies. Additionally, it serves as a neutral third party for verification while showcasing a genuine and widely accessible data storage method (Nakamoto, 2009). In addition to these benefits, this remarkable technology prevents any modification to the transactions that are made public (Rathore et al., 2017,2018).

In order to ensure that any attacker did not alter the documents in the chain in any manner, a chain of data containing digital signatures was used as an automated ledger in 1991 (Narayanan et al., 2016). The main idea behind the development of blockchain technology was this. This amazing concept was initially used for electronic money in a study report about the Bitcoin cryptocurrency in 2008 (Nakamoto, 2008a). Since Satoshi Nakamoto published the aforementioned article under a pseudonym, the true creators of this technology are still unknown. Blockchain and Bitcoin are now closely associated, and blockchain is frequently anticipated to be used for financial transactions.

Other digital currencies existed prior to Bitcoin, but their applications were limited. With the adoption of blockchain technology, Bitcoin profited immensely as it gained intriguing features that stoked enthusiasm among users. Single user authority was not provided due to the decentralised nature of Bitcoin and the blockchain. As a result, there was no longer a single point of failure, and customers could send money to one another directly without the use of a middleman. Additionally, it made it possible for the organisations (miners) in charge of maintaining the blockchain to get a fair split of profits and increased the system's usability.By combining decentralised blockchain technology with a consensus technique-based maintenance system, a self-policing methodology was created, ensuring that only legitimate transactions are added to the blockchain system.

Since blockchain has all of the aforementioned properties, it can be used for a variety of purposes in addition to financial transactions. IoT, supply chain management, decentralised cloud storage, distributed independent agencies, healthcare, propriety, and rights distribution are a few among them. Not only the commercial sectors, but also academia, have recently become captivated by blockchain technology. Other industries that could benefit from this revolutionary technology include medicine (Ekblaw et al., 2016; Azaria et al., 2016; Yue et al., 2016); finance (Huckle et al., 2016; Bylica et al., 2015; Hurich, 2016; Jindal et al., 2019); internet of things (IoT) (Dorri et al., 2017; Chaudhary et al. The various domains and respondent shares that employ blockchain in the respective sector (financial institutions) are highlighted in Fig. 1. Numerous blockchain applications have emerged as a result of the rapid adoption of blockchain technology across a wide range of industries, which has transformed banking and other financial services. Fig. 2 shows the rise in wallet users (users of the blockchain wallet) during the last three months.

Despite the introduction of several cryptocurrencies, Bitcoin remains the most well-known and widely used. It features a special data structure for storing information, and no outside party is required for transactions that happen within its network. The primary mechanism utilised to build Bitcoin was the blockchain technology, which was initially invented in the year 2008 and implemented in the year 2009 (Nakamoto, 2008b). In surveys done in 2015 and 2016, respectively, Bitcoin was rated as the best operating currency and the best performing product.The capital market for blockchain is said to have reached $10 billion in the same year (i.e., 2016). Bitcoin has more over 300 K transactions a day, according to a report from May 2017 (blockchain.info, 2017).

The emergence of programming languages that are turing-complete led to the creation of a few, such as solidity and serpent, which allowed users to create smart contracts that would run on the blockchain, ushering in the blockchain 2.0 era. A number of new cryptocurrencies with embedded smart contracts emerged with the introduction of blockchain 2.0. They include, among others, Ethereum, Ethereum Classic, and Hyperledger Burrow. At the moment, Ethereum is thought to be the most popular blockchain that supports smart contracts.We currently have 317,506 smart contracts, and more than 75,000 transactions occur every day (Lee Kuo Chuen, 2015). Because they make advantage of its decentralised nature, Blockchain is the primary technology utilised to build numerous cryptocurrencies. As was already established, the distributed consensus process of blockchain eliminates the requirement for a reliable third party to carry out transactions or exchange information. As a result, the implicated distrusted users can complete their duty without the need for a centralised authority.

The authors concluded from the foregoing description that they needed to concentrate on blockchain, which serves as the foundation of cryptocurrencies, in order to study them in depth and understand their mechanisms and vulnerabilities. As a result, this essay focuses on cryptocurrencies, their weaknesses, and the exploitation of such flaws rather than just discussing the architecture and mechanics of blockchain. It also elaborates on areas where improvements can be made as well as the advancements made in the realm of blockchain.

The remainder of the essay is organized as follows. The authors concentrate on a concise explanation of blockchain technology in section 2. The third section focuses on the newest blockchain technology, including forks, smart contracts, and consensus procedures. The topics covered in Section 4 are blockchain categories, applications, and blockchain expansions. The platforms in blockchain, such as cryptocurrency, Hyperledger, multichain, etc., are highlighted in Section 5. In addition to highlighting the difficulties and weaknesses of blockchain, this section also covers assaults on the two most important cryptocurrencies, Bitcoin and Ethereum. Section 6 discusses current blockchain security upgrades. The authors wrap up their assessment in section 7 by reviewing recent advancements and forecasted developments in the blockchain industry. Fig. 3 shows a schematic illustration of how this survey paper is organised.

fragments of sections

a description of blockchain

Since blockchain consists of open, immutable digital ledgers, it operates without a central authority (i.e., in a distributed ecosystem). Any user in the blockchain network can request to conduct a transaction, and that request is then recorded in a ledger that is accessible to all other users in the network. These people verify the transaction in the node, and only then is the node determined to be genuine if the users come to a consensus.

Forks and consensus techniques in blockchain technology

The preceding section provides a detailed explanation of the structure of blockchain. The process for adding new blocks to the current blockchain is also clarified, in addition to everything else. The writers illustrate the various blockchain mechanisms (forks and consensus procedures) in this section, which will further aid readers in grasping the previously covered ideas.

Blockchain classification

The foundation of blockchain is distributed ledger technology, which offers a consensus authentication method through a computer network that functions without a centralised authority for facilitating transactions and storing the information that is generated by them. Permission-based and participation-based blockchains are the two categories under which it is classified.

Challenges with ITS security and blockchain platforms

While blockchain has many uses, it is clear that digital currencies are its main use. This section will largely concentrate on reviewing a few blockchain platforms in order to highlight technological differences and strategies that are being used. The taxonomy of blockchain platforms is highlighted in Fig. 19. It should be emphasised that we are not promoting any of the platforms mentioned, and this list should not be seen as a comprehensive list of the most popular platforms.

blockchain improvements to security

We have already talked about how the blockchain functions as the foundation of the well-known cryptocurrency networks bitcoin and ethereum. Then, we researched numerous attacks and weaknesses that were made against these networks. The blockchain security advancements that may be used for blockchain deployment and subsequently enhance the bitcoin and Ethereum networks are now summarised in this section. Table 11 displays some of the security upgrades in the Finally, a few words

Blockchain is now highly regarded and advised because to its decentralised and peer-to-peer nature. Numerous blockchain-related research, however, simply considered Bitcoin. Blockchain technology, however, has several applications that go beyond Bitcoin. With its many properties, including decentralisation, persistency, privacy, and auditability, blockchain has repeatedly demonstrated its capacity to transform traditional IT sector areas. Within this study