Cybersecurity in Transactions on The Blockchain
What makes Blockchain technologies secure?
Learning Objectives:
- Security Measures for Transactions
- Types of Cyber Attacks
Introduction:
Transactions on the blockchain are becoming the backbone of modern advancements. A transaction is a part of a series of cryptographic blocks. These cryptographic blocks contain the unique id number for themselves and the following block. They can also hold data connected to a specific id number. A distributed network of users then validates these blocks, checking for their connectedness. In layman’s terms, every person on the blockchain (the distributed network of users) can look at the transactions, ensuring a consensus. This factor of blockchain transactions is essential for modern advancement. Distributed networks provide decentralization and peer-to-peer transactions for the users by having direct connections to each other. Alongside cryptography and networks, these transactions are immutable once on-chain. Immutability means transactions can not be deleted or altered, making them reputable and fair. Since transactions are connected, if one is changed, the blockchain breaks; transactions are updated. These aspects might make one speculative of transactions. However, trust in blockchain technology grows.
Security Measures for transactions:
Blockchain types are necessary to understand to ensure security. There are four types of blockchains: Public, Private, Permissionless, and Permissioned. Public and Permissionless blockchains are both used to give any user access to validate transactions, neither limit a user. Users validate their network to protect the integrity of the blockchain. Private and Permissioned blockchains give membership to specific users; an authorized group or person oversees. All of these blockchains allow developers the flexibility to create their blockchain technology.
In addition to the characteristics of the different blockchains, there are other types of security measures. One of the most common is Decentralized Autonomous Organizations or DAO. DAOs give users a voice through voting and making changes to the blockchain, essentially a democracy for the blockchain. In addition to DAOs, PoW and PoS are both consensus methods that Bitcoin and Ethereum created, respectively. PoW (Proof of Work) requires a miner to find a key or password to the next block on the blockchain. PoW creates an environment that is transparent, effectively a public or permissionless blockchain. PoS (Proof of Stake) requires a user to own a lot of stake in a cryptocurrency to acquire the next block. In contrast to PoW, PoS does not have competition since the algorithm relies on who has most of the cryptocurrency rather than who has enough computing power to get the key to the next block. In addition, PoS is also more efficient since computing power is not a critical component.
Types of Cyber Attacks:
Blockchain types and consensus architectures are susceptible to some of the most common attacks. The most common attacks are Phishing, Routing, Sybil, and 51%. Phishing attacks continue to be the most common attack. To perform a phishing attack, a user may run a program or manually swindle another user to give their personal information and gain authentication into a network. Routing attacks are possible when someone gains access to a network with a lot of data. Hackers will then intercept this data while it goes through the system. Sybil attacks are comparable to DDoS attacks, where a person floods a network with information to result in a complete crash of the system. The last and most detrimental are 51% attacks. Specifically, they dismantle the Public and Permissionless blockchain. These attacks make a decentralized network centralized if a group or person has the resources to control 51% of the transactions. A 51% attack can completely ruin blockchain technology, which is why education is essential in preventing such attacks.
Conclusion:
Transactions on the blockchain will provide security and advancement for future technologies. By inherently using cryptographic blocks for these transactions, users can control and see what is actively happening on a blockchain. The different blockchains are necessary for someone looking to build blockchain technology. Understanding whether a person should use a public, private, permissionless, or permissioned blockchain allows the developer to combat the vulnerabilities of the specified type. Permissioned and private types will be susceptible to Phishing, Routing, and Sybil cyber attacks. Permissionless and public are vulnerable to Phishing, 51%, and Sybil attacks. These attacks are more likely than not to be combated with education on the vulnerabilities and innovation of consensus algorithms.
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