Did you know that in 2021, there will be over 1 million blockchain-based smart contracts? Blockchain technology is the future of cybersecurity. You can never be too careful when it comes to protecting your data and assets. As blockchain technology is developed, blockchain security issues become more complicated and harder to deal with. This post talks about blockchain security issues that companies might face in the future.

What is Blockchain Security

Blockchain security is the protection of blockchain systems and data from attackers. It means sensitive information and the blockchain infrastructure are safe from hacker attacks. Therefore, if blockchain technology is hacked, data can be tampered with or the infrastructure destroyed.

Source: Specbee

There are three common ways blockchain security issues occur:

1. Hashing data storage: Blockchain data storage is done through blockchain hashes. These are created by running a hashing algorithm on user-inputted information and storing the output of this algorithm in blockchain storage.
2. Private key storage: This issue is about blockchain wallet providers offering users unique, cryptographically protected addressees to which only they have access.
3. Computing power issue: This security issue is about blockchain-based applications being vulnerable to DDoS attacks.

Types of Blockchain Security Issues

There are a few types of blockchain security attacks that blockchain technology currently faces. They are:

1) Blockchain 51% Attack

A blockchain 51% attack occurs when someone or a group of people gain control over more than 50% of the blockchain’s computing power. This makes it possible for them to rewrite blockchain history which in turn enables them to double-spend coins, prevent new transactions from gaining confirmations, prevent other miners from mining any valid blocks, and allow them to censor specific or all transactions.

Sybil attack

You can say a Sybil attack is a small-scale 51% attack. A Sybil attack occurs when an individual or group attempts to fill blockchain with nodes by creating blockchain fake identities. This blockchain security vulnerability allows attackers to:

• prevent blockchain users from connecting to certain blockchain network nodes
• censor or slow down specific transactions and/or blockchain addresses
• take control of the entire blockchain network.

2) Blockchain Timestamp Security Attack

A blockchain timestamp security attack happens when blockchain data becomes modified by a hacker due to incorrect blockchain time stamps. This blockchain security issue is often used to execute blockchain-based applications’ smart contracts before the blockchain transaction has taken place.

3) Blockchain Spam Attack

A blockchain spam attack or blockchain garbage transaction attack happens when blockchain users flood blockchain network nodes with unnecessary and unwanted blockchain transactions. This blockchain security vulnerability forces nodes to store, process, and return the irrelevant data while ignoring the relevant blockchain transactions.

4) Blockchain Replay Attack

A blockchain replay attack happens when hackers copy and replay blockchain transactions. A blockchain transaction is specially crafted to change its unique ID before being confirmed in the blockchain. This blockchain security issue allows attackers to trick blockchain nodes into thinking a blockchain transaction has not occurred yet, enabling them to double-spend coins.

5) Blockchain Routing attack

A blockchain routing attack happens when a blockchain network is flooded with bad blockchain data, thus preventing good blockchain data from being delivered correctly. This blockchain security issue is often used to prevent blockchain users from connecting to blockchain nodes and has the ability to cause huge blockchain performance issues.

6) Blockchain Double-spending Attack

A blockchain double-spending attack occurs when a blockchain user succeeds in spending their blockchain cryptocurrency more than once. This blockchain security issue may be used to defraud blockchain users or damage blockchain-based applications. However, the double-spending attack is blockchain network-specific and can be prevented by blockchain node confirmation.

How to Prevent Blockchain Security Issues

Blockchain security issues cannot be completely eliminated because blockchain is still an emerging technology and has to deal with what comes along with it. With that being said, blockchain can be secured using blockchain security best practices. Here are a few of them:

• Choose a trustworthy blockchain network and join it with decentralized blockchain nodes
  
• Conduct Blockchain / smart contract security audits and penetration tests.
• Apply blockchain code audits, which make it possible to find and fix any blockchain coding vulnerabilities
• Use a blockchain-based firewall and protocol updates to protect blockchain crypto assets.
• The blockchain-based system should have blockchain data segmentation, which not only protects blockchain crypto assets but also makes blockchain applications more secure.
• Try using various software/hardware solutions that prevent blockchain attacks by allowing real-time protection against all types of threats.

Conclusion

The blockchain is an emerging technology that has a lot of potential, but security is the key aspect we need to take into account as this space continues to grow. The blockchain’s open and decentralized nature means that there are many points of vulnerability, which can be exploited by hackers. It takes a lot of time and effort to build an airtight security plan for your website, but it will pay off in the long run if you take these steps now.