Key Threats to Blockchain Network Security and Countermeasures 

Key Threats to Blockchain Network Security and Countermeasures 
Key Threats to Blockchain Network Security and Countermeasures 

Blockchain technology has received a lot of interest in recent years because of its incredible blockchain network security tamper-proof characteristics. However, some key blockchain security threats threaten the network’s serenity. This article will discuss these threats and corresponding countermeasures. 

 

Blockchain technology has undoubtedly experienced broad adoption in recent years. Apart from its initial application in cryptocurrency, it is now employed in healthcare, real estate, smart contacts, and other fields. 

 

However, many blockchain security vulnerabilities have arisen due to faulty technical deployment. 

 

As a result, the blockchain may become insecure, allowing attackers to engage in various nefarious behaviors, such as slowing the chain’s operation, reversing blockchain transactions, stealing users’ private keys, and much more.

 

Before getting into blockchain network security, let’s discuss blockchain. A blockchain is a decentralized ledger that records transactions across multiple computers so that the information cannot be changed retrospectively. 

 

To assure data integrity and security, this system employs the principles of decentralization, cryptography, and consensus.

 

Principles of Blockchain Network Security

The central principles on which blockchain network security is formed are;

  1. Consensus mechanism
  2. Decentralization
  3. Cryptography

 

Consensus Mechanism

These are protocols used to reach agreement among dispersed processes or systems on a particular data value. Proof-of-Work (PoW), Proof-of-Stake (PoS), and Delegated Proof-of-Stake (DPoS) are a few examples.

 

Decentralization

Blockchains, as opposed to traditional centralized systems, disseminate data over a network of computers or nodes, reducing single points of failure.

 

Cryptography

To secure data transfers, blockchains employ cryptographic algorithms. For example, Bitcoin mines and validates transactions using the SHA-256 (Secure Hash Algorithm 2).

 

Key Threats to Blockchain Network Security and Possible Countermeasures

Despite the high level of security provided by blockchain’s intrinsic features, potential attacks and vulnerabilities remain. Let us examine these threats and look at possible countermeasures.

  1. Sybil Attacks
  2. 51% Attacks
  3. Double Spending Attacks
  4. Routing Attacks
  5. Selfish Mining Attacks
  6. Vulnerable Smart Contracts

 

Sybil Attacks

This sort of attack, named after a famous fictional character, involves an attacker creating many bogus nodes on the network. 

 

Using those nodes, the attacker can gain majority consensus and disrupt chain transactions. As a result, a large-scale Sybil attack is nothing more than a 51% attack.

 

Many blockchains use proof of work and proof of stake algorithms to address blockchain security challenges such as Sybil attacks. 

 

While these methods may not wholly prohibit such assaults, they make them impossible for the attacker to carry out.

 

Possible Countermeasures on Sybil Attacks

By limiting the amount of connections per node, an attacker can avoid overwhelming the network with malicious nodes.

 

Also, because they require computational resources or a stake of value, PoW and PoS systems can aid in preventing Sybil assaults.

 

51% Attacks

Miners play an essential role in validating transactions on the blockchain, allowing it to expand. Blockchain technology bases its judgments on public support. 

 

For example, two blocks with conflicting transactions may be mined simultaneously. In that instance, the block with the most network approvals is preserved in the chain, while the other becomes stale.

 

The consequences can be severe if a group of hostile hackers gains control of 51% or more of the mining power. The hackers can then utilize their dominant status to cancel transactions and carry out fraudulent activities. 

 

They may be able to rewrite parts of the blocks, but rewriting the entire blockchain (while theoretically possible) is difficult.

 

Blockchain security vulnerabilities, such as the 51% attack, are more likely to occur in the chain’s early phases. It is possible to obtain 51% of mining power at a time when there are very few miners on the network.

 

Possible Countermeasures on 51% Attacks

Increasing the number of blockchain network users enhances decentralization, making it more difficult for a single entity to control 51% of the network.

 

Seeing as they do not rely on mining power, Proof-of-Stake (PoS) and Delegated Proof-of-Stake (DPoS) consensus techniques lower the risk of a 51% assault compared to Proof-of-Work (PoW).

 

Double Spending Attacks

One distinguishing aspect of real currency is that you cannot pay the same bill in two distinct locations (unless you are a magician or a con artist). Digital assets, on the other hand, are copied; after all, they are just bits of 1s and 0s.

 

So, in the preceding example, Elon can attempt to transmit the identical Astra coin to Jeff and Mark’s two distinct wallet addresses. This type of attack is known as a double-spending attack.

 

In general, measures are incorporated into the blockchain to avoid such assaults. For example, if the currency is sent to Jeff in the first block, the transaction to Mark will be ignored in the following leagues.

 

However, if both transactions make it to two distinct blocks mined simultaneously, the block with the most confirmations from network nodes will be maintained, and the other will be ignored after some time. 

 

However, mitigating blockchain security vulnerabilities such as double-spending attacks has its drawbacks.

 

Mark, for example, would still expect one Astra coin in his wallet. As a result, users often wait at least six more blocks to be mined (as proposed by Satoshi Nakamoto in his white paper) before being sure of receiving the coin. 

 

Furthermore, if a motivated attacker can perform the 51% percent attack outlined above, they can easily follow up with the double-spending attack.

 

Possible Countermeasures on Double Spending Attacks

To reduce the possibility of double spending, most blockchains require numerous confirmations before calling a transaction final.

 

The two-phase commit protocol can be used to prevent double-spending throughout the transaction process.

 

Routing Attacks

One thing is clear: blockchain technology requires a solid network to function. BGP (Border Gateway Protocol) connects ISPs and allows them to share route information. 

 

This protocol is outdated and contains various flaws that an attacker could exploit.

 

For example, an attacker in control of an ISP can publish a bogus route, denying transactions to specific nodes or potentially severing the blockchain network in half!

 

In the prior example, suppose Elon’s node is 100.0.0.0/16 (/16 is the IP prefix). Now, if an attacker uses BGP to propagate a route to 100.0.0.0/17, this information will be quickly updated in all routers (this is how BGP works by sharing route information with neighbors). 

 

As a result, Elon’s data will be rerouted to the entry provided by the attacker.

 

BGP chooses the one with the more extended prefix when given two competing routes (Elon’s 100.0.0.0/16 vs. the attacker’s 100.0.0.0/17).

 

As a hacker accomplished the routing assault in 2014, blockchain security issues linked to routing can have catastrophic consequences. This enabled the hacker to prevent mined blocks from propagating over the network. 

 

Instead, they exploited the information to claim the effort as their own and were thus paid with mining fees.

 

Possible Countermeasures on Routing Attacks

The adoption of secure routing protocols (with certificates) can help in the prevention of blockchain routing attacks.

 

Selfish Mining Attacks 

It’s exactly what it sounds like: a selfish mining attack.

 

Assume Jeff sends a few Astra coins to Mark with a delay, resulting in numerous independent transactions (along with many other transactions from others giving coins to each other). 

 

Meanwhile, Elon and Bill are fighting to validate these transactions as miners.

 

Assume Elon discovers the valid block for the first transaction. Still, instead of spreading it over the network, he begins working to locate the second good block for the subsequent transactions. 

 

He keeps making his private chain of blocks until the regular blockchain is one block behind. He then carefully exposes his chain to the network.

 

Some blockchain systems are designed to keep the longest chain in the event of two competing forks. As a result, Elon can now demand a more significant mining charge.

 

In contrast, if Elon had publicized the legitimate block as soon as he discovered it, he and Bill would have begun vying for the next block at the same level.

 

Thus, in a selfish mining attack, an attacker leverages his advantage position to retain for extended periods to maximize revenues. This method, however, is dangerous. 

 

If Bill or another miner had discovered the next block before Elon and publicized it, all of his efforts would have been for naught.

 

At first appearance, this appears hazardous and unprofitable; however, an examination utilizing Markov chains has revealed that selfish mining works!

 

Possible Countermeasures on Selfish Mining Attacks

Miners who are caught engaged in selfish mining could face a penalty system.

 

Accelerating block propagation would give dishonest miners less time to operate on their chain, minimizing the likelihood of selfish mining.

 

Vulnerable Smart Contracts

Smart contracts are code-written agreements that leverage blockchain for record-keeping.

 

In real life, for example, if you lend someone money, you will receive periodic interest until the borrowing time is over, at which point you will receive your principal amount back.

 

This can now be turned into code and used in place of real money with cryptocurrency. The advantage is that no intermediary, such as a bank, is required. There is no way to modify the contract once it is in place.

 

However, these contacts sometimes need to be correctly coded. This enables an attacker to identify and exploit potential faults in the code. 

 

This was demonstrated in the example of the DAO, where an attacker could use such a weakness and steal $50 million in cryptocurrencies.

 

Possible Countermeasures on Vulnerable Smart Contracts

Regular audits of intelligent contract code might detect potential vulnerabilities before deployment.

 

By limiting further interaction with a smart contract unless specific circumstances are met, time locks can guard against reentrancy attacks.

Block numbers or block hashes instead of fixed timestamps can help prevent manipulation.

 

Final Thoughts 

Blockchain is a truly revolutionary technology that has combined the entire process of consensus-building with the rigor of coding. A blockchain is only as secure as the programming that powers it. 

 

As a result, before making your blockchain public, conduct extensive tests and audits for any blockchain network security concerns. As the monetary value of your blockchain grows, so do the attacks on it. 

 

While blockchain network security services may appear expensive, they are nothing compared to the costs you may suffer if your blockchain-based software is attacked. Regular security audits and pen-testing will keep your blockchain operational in the future.