Blockchain Vulnerabilities and Effects accompanied with Preventative measures

[Danesifav]

Without a doubt, blockchain technology has grown in popularity in recent years. Apart from its initial application in cryptocurrency, it is now being used in healthcare, real estate, smart contacts.
technology collects and stores data in groupings known as “blocks,” and each block can hold a set amount of data. When a block is full, it is chained to the previous full block, forming a data chain, hence the brilliant name “blockchain.”

The technology has been a great example of how security tenets in financial transactions and information transmission are transformed. It provides a one-of-a-kind data structure as well as built-in security features. Blockchain is based on the ideas of consensus, decentralization, and cryptography to ensure transaction trust.
However, many blockchain security issues have arisen due to faulty technology implementation.

BLOCKCHAIN SECURITY ACCORDING TO BLOCKCHAIN TYPE

To further explain blockchain security, it is necessary to first grasp the difference between public and private blockchain security. In terms of participation and data access capabilities, blockchain networks can have various effects. As a result, there are two forms of labeling for blockchain networks.

Blockchain networks can be private or public, depending on the privileges required for membership. The means for participants to acquire access to the network, on the other hand, are governed by whether the blockchain network is permissioned or permissionless.

• Public blockchain networks are open and might allow any user to join while maintaining participant anonymity.

• In private blockchain networks, identity is used to confirm membership and access privileges. Furthermore, they only allow familiar organizations to participate.

FIVE BLOCKCHAIN SECURITY ISSUES AND SOLUTIONS

Many people are right when they believe blockchain is inherently secure. Blockchain is unquestionably beneficial to organizations, but it has significant drawbacks due to specific security issues. Here are five of the top blockchain security challenges and their solutions.

1. 51% ATTACKS

Miners play an important role in validating transactions on the blockchain, allowing them to develop even further. A [51% attack] is possibly the most dreaded threat in the entire blockchain business. These attacks are more likely to occur in the chain’s early stage, and a 51% attack does not apply to enterprise or private blockchains.

A 51% attack occurs when a single individual or organization (malicious hackers) collects more than half of the hash rate and seizes control of the entire system, which can be disastrous. Hackers can modify the order of transactions and prevent them from being confirmed. They can even reverse previously completed transactions, resulting in double-spending.

To prevent 51% attacks:

• Improve mining pool monitoring.

• Make certain that the hash rate is higher.

• Avoid using proof-of-work (PoW) consensus procedures.

2. PHISHING ATTACKS

Phishing attacks on blockchain networks are increasing, causing [serious issues]. Individuals or company employees are frequently the targets of phishing attempts.

The hacker’s goal in a phishing attack is to steal the user’s credentials. They can send legitimate-looking emails to the owner of the wallet key. The user is required to enter login details via an attached fake hyperlink. Having access to a user’s credentials and other sensitive information might result in damages for both the user and the blockchain network. They are also vulnerable to follow-up attacks.

To prevent phishing attacks:

• Improve browser security by installing a verified add-on to notify you about unsafe websites.

• Improve device security by installing malicious link detection software as well as dependable antivirus software.

• Reconfirm with the partner if you receive an email requesting login details relating to the issue.

• Don’t click on the link until you have thoroughly reviewed it. Instead of clicking on the links, enter the address into your browser.

• Avoid open Wi-Fi networks when using an electronic wallet or other important banking transactions.

• Make sure your system and software are up to date.

[lesDecroissant]

Thanks @Danesifav for the response, I will like to reorganise the category of security categories in web3 (both enchain / offchain) as a post.

Following are the major categories of attack vectors in the blockchain ecosystem.

Consensus security :

• This corresponds to the underlying assumptions of the theoretical threshold of what is the minimum nodes that are needed to be honest for validating the transactions in order to avoid sybil attacks . this is most critical component as it directly evades the . the security of a given L1/L2 chain is proportional to Nakamoto Consensus (which defines the degree of collusion between the blocks in order to influence the finalisation of transactions and TPS) . Even though apart from major issues related to consensus (like 51% attack) are being managed with shifting to alternative transaction consensus, there are other more sophisticated attack vectors (mainly Miner Extractable Value) , which although are not as threatening as 51% collusion, but still has been a major concern given the significant loss caused to the developers in terms of loss revenue and slippage for DeFI protocols. also this issue is significant for the side chains given that

• To avoid/limit this attack vector, will need a comprehensive approach of auditing the underlying consensus protocols to be resistant to these attack (either via formal verification as defined by paper which describes the research in the field of formal verification in order to hard bound the mathematical security). But also to develop the clients that are secure and more decentralised (like helios).

Software Supply chain attacks:

• This corresponds to the dependencies used for developing enchain smart contracts / offchain having major security flaws, and their existing dependency graphs, causes the potential zero day attacks. for instance the potential bugs found in openzeppelin and avalanche blockchain show the challenges that can happen if the dependencies are not taken into consideration .

• The potential solution is to use exactly the versions of the libraries in the blockchain/ smart contract , rather than using whitecaps like ^ for defining the functions in the package managers . also check always the security scanners and implement the best

Lack of secure code / potential vulnerability in the implementation :

• This corresponds to the most common vulnerability pattern attacks that create major attacks in smart contract protocols , bridges , oracles and other off-chain infrastructure . As explained in prominent places like the rekt news and and other security analysis . the challenge is caused due to the composability of the services and publicly available details about the smart contract protocol makes it easier for black hats to reproduce the potential attack vectors in the sandbox enviornments without ever giving traces for the web3 companies to avoid the attack on the level of surveillance (which is possible for web2 cloud native applications).

• Also given that off-chain components (like bridges, oracle) are mostly not taken into consideration for single point failures while doing the security audits in the past (and most of the time the reports do acknowledge the vulnerability but the dev teams took this suggestion as accepted risk) and thus mostly high throughput but centralised validation bridges that had found vulnerability in the blind signature (wintermute, wormhole) caused major losses to DeX’s even though most of the affected protocols might not have these assets as scope of threat vector.

• For avoidance of the critical attack hacks, there must be approach of threat intelligence by real time analysis of the interaction of the potential doubtful operations enchain/off-chain. given that many great projects are going at great lengths for writing secure code, doing end 2 end audits (both contract logic security and formal verification), not every web3 team has the bandwidth and time in order to devote the resources, thus the teams should indeed follow the analysis of their protocol contracts by using checklist created by great dev teams ( like trail of bits security checklist , t11s solcurity, keeping check based on the crowdsourced audits from code arena etc), but also using open source security detection framework like forta to check unchain activities and then define your security rules in order to proactively react based on sudden critical change in the smart contract operations. along with that providing more trestless design patterns (having address(0 as owner once ), avoiding upgradeable contracts and insuring passable operations) can indeed reduce the damage of the attacks on the blockchain projects.

that’s it for this edition, this was a 30k ft overview of the main categories of the attack vectors in the coming times, feel free to share other attack vectors that community wants to know more and I am happy to address them in the upcoming articles.

[Humphery]

@Danesifav I must applaud your efforts on this article. Excellent read!!

Not to contradict your work, I moved on to make a few contributions to it.

1. A 51% attack occurs when one or more miners control more than 50% of the network’s mining hash rate. This empowers them to reverse transactions, double-spend coins, and block fresh transactions from being confirmed.

Effect: A successful 51% attack has the potential to cause significant damage to a blockchain network since it can be used to influence the system and interrupt its normal operation. Preventive Measures: The easiest method to avoid this type of assault is to collaborate with other miners to ensure that no single entity controls more than 50% of the network’s hash rate. Furthermore, some blockchains have included specific algorithms that may detect suspicious activity and inform the network to protect against potential 51% attacks.

2. Sybil Attack: A Sybil attack is a type of attack in which a malicious actor creates multiple fake identities on a network in order to gain control of the network.

Effect: A successful Sybil attack can lead to network manipulation since the malicious actor can utilize their forged identities to acquire control of the network and disrupt its normal operation.

Preventive Measures: The best approach to prevent a Sybil assault is to implement identity verification processes to ensure that only authentic users can access the network. Furthermore, some blockchains have included specific algorithms that can detect unusual activity and inform the network to protect against future Sybil attacks.

3. Denial-of-Service Attack: A denial-of-service (DoS) attack attempts to disrupt a network by flooding it with traffic.

Effect: A successful DoS attack can cause network disruption since the bad actor can overload the network and prohibit legitimate users from accessing it.

Preventive Measures: The best strategy to prevent a DoS attack is to utilize specialized algorithms that detect unusual traffic and inform the network to protect against prospective DoS attacks. Furthermore, some blockchains have added rate-limiting algorithms that limit the amount of bandwidth that may be delivered to the network in order to prevent DoS attacks.

[Stallonaking]

Wha an insightful content @Danesifav
Want to chip in some small thing

Blockchain security issues and solutions

• Routing attacks
  A blockchain network and application rely on the real-time movement of massive amounts of knowledge. Hackers can use an account’s anonymity to intercept data because it’s being transmitted to internet service providers.
  In the case of a routing attack, blockchain participants are usually unaware of the threat because data transmission and operations proceed as was common. The danger is that these attacks will frequently expose confidential data or extract currency without the user’s knowledge.
  To prevent routing attacks:
  • Use encryption.
  • Implement secure routing protocols (with certificates).
  • Change passwords regularly; use strong passwords.
  • Educate yourself and your workers about the risks associated with information security.
• Private keys
  Private Key or seed phrase is the main key to your funds. If your private key is weak, it can be easy for a hacker to guess. This means that they could gain access to your funds.

Private keys should be kept secret and strong enough that they can’t be easily guessed.

• Scalability issues
  Blockchain technology continues to be in its infancy and so has quantifiability problems. This implies that the network will solely handle a restricted variety of transactions at any given time. There are multiple offline solutions (L2s) & sidechains which you can use to avoid scalability issues.

• Malicious nodes
  The other security problems facing blockchain technology are the danger of malicious nodes. This will happen once a lousy actor joins the network and tries to disrupt it. They’ll try this by flooding the network with transactions or making an attempt to reverse valid transactions.

Despite the numerous security flaws in the blockchain, cyber security experts are working hard to fix or lessen these issues. Blockchain may be deployed most securely and firmly by IT professionals with the necessary analytical and technical expertise. But knowing about such assaults and how to prevent them is always a smart idea for protecting your valuables.

[Cashkid18]

A notable illustration of how the principles of security in financial transactions and information exchange have changed is blockchain technology. It provides a special data structure along with built-in security features. Blockchain depends on the concepts of cryptography, decentralization, and consensus to provide transactional trust. However, many businesses and early users have remained troubled by blockchain security vulnerabilities.Blockchain security issues affect even well-established blockchain firms. Additionally, there are a lot of undesirable hazards that keep cropping up in the realm of blockchain security, which raises the important issue, “Is Blockchain really secure?” and leaves a lot of room for skepticism.
The complexity of the current state of blockchain security is evident from a detailed overview of the various blockchain security concerns. To build better networks and systems, it is crucial to be aware of blockchain security flaws. Furthermore, technological developments like AI-based code, transaction, and infrastructure analysis tools may herald new developments in blockchain security.

[Bukaric]

Good one @Danesifav but I’ll like to talk about another blockchain security issues and it’s solution.

1. SYBIL ATTACK ON BLOCKCHAIN:
   A Sybil attack employs a single node to manage numerous active false identities (also known as Sybil identities) concurrently in a peer-to-peer network, by controlling the vast majority of the network’s influence. This kind of attack seeks to weaken the legitimacy or power of a well-respected system.

The attacker have the potential to carry out unauthorized actions in the system after a successful Sybil attack. It allows a single entity, like a computer, to generate and manage many identities, such user accounts and IP address-based accounts, for instance. All of these false identities deceive individuals and computer systems into thinking they are real.

Gaining undue influence over network choices is the main objective of a Sybil attack on a blockchain network. To accomplish this, the attacker develops and maintains a number of aliases and can as well block users from the network.

Some prevention measures to take, in order to prevent a Sybil attack are by using;

1. SOCIAL TRUST GRAPHS:
   By looking at social graph connectivity data, Sybil assaults can be avoided. By doing this, an individual Sybil attacker’s potential damage can be reduced while yet remaining anonymous.
   The Advogato Trust Metric, SybilGuard, and SybilLimit are a few of the currently used methods of Social Ttust Graphs.

2. IDENTITY VALIDATION:
   By exposing the real identities of adversarial entities, identity validation can aid in the prevention of Sybil attacks. Validation is based on a central authority that can both execute reverse lookups and verify the identity of entities in the network.