Cybersecurity has emerged as a grave concern for many businesses. Organizations now store large amounts of data on the web. Many transactions are conducted online as well, while numerous activities and workflows are coordinated through connected apps and devices. Unfortunately, this heavy reliance on the internet leaves companies vulnerable to hacks and exploitation.
Cybersecurity experts are constantly looking for new solutions and measures to address this. Now, many blockchain developers are working on cybersecurity solutions too, which can potentially redefine the security field as blockchain has several inherent traits that can resolve specific threats.
Now that blockchain has become one of the hottest cybersecurity topics, some experts believe that it could shake up the industry while others write it off as a buzzword. Which view is right, it could the answer fall in-between? Let’s see.
What is blockchain?
Bitcoin popularised blockchain, but it’s a technology in its own right. Basically, blockchain stands for a public ledger that records and verifies every transaction, whether with cryptocurrencies or other. ‘Blocks’ of transactions are verified, processed, and then added to the ‘chain’, creating an immutable record.
With bitcoin, the identities of those conducting transactions remain anonymous, but the ledger itself is public. However, blockchain developers can build blockchains with different attributes, such as private ledgers, or make the identity of transacting parties known. Each tweak to the blockchain model will yield its own advantages and drawbacks.
Many cryptocurrencies have adopted blockchain due to its ability to maintain anonymity while also providing transparency and security. At the very least, users can see anonymous transactions and access the immutable public ledger. While the blockchain itself is not a panacea for cybersecurity threats, it could be a useful security tool when used properly.
How about Bitcoin hacks and scams?
Blockchain’s reputation has been tarnished by various cryptocurrency exchange hacks and scams. However, cryptocurrency hacks haven’t targeted blockchains themselves, but instead elements outside of those blockchains. Human error and other weaknesses mean that systems relying on a blockchain are still vulnerable even if a blockchain itself is sound.
For example, hackers have targeted cryptocurrency trading exchanges, stealing login credentials, and then using them to modify the blockchain by sending bitcoins to different accounts. The blockchain did its job, but failures cropped up elsewhere. Still, there’s an important lesson here: a system using the blockchain will not be foolproof since weaknesses could exist outside of the ledger itself.
Security Benefits of Blockchain
One of the key tasks for cyber forensic teams is determining who logged in where and did what. Various logs and monitoring systems can help cyber forensic experts uncover past activities. However, with blockchain, a cyber forensic expert can review the ledger to obtain much of this information.
Blockchain ledgers create detailed and hard-to-manipulate records of various transactions. While cryptocurrencies often keep identities anonymous, companies could ascribe specific and known identities. Every action and transaction would be recorded, confirmed, and then reconfirmed.
Moreover, blockchain is independent of reputation and allows mutually distrusting parties to carry out transactions. One does not even need to know the identity of the other transacting party. Instead, a confirmed and reconfirmed record of a transaction is generated. With cryptocurrencies, when someone sends money, the sender, receiver, and third-party processor all confirm the transaction.
Immutable records with no intermediary
With a public ledger, there is no single record to tamper with. Blockchain ledgers can be distributed among various parties. Each party can then verify transactions. This aspect has already given rise to early smart contracts that reduce the need for lawyers to act as intermediaries. Instead, two parties in a contract can verify everything on their respective ends, with the contract then executing itself.
Similarly, companies will be able to rely on immutable records for the tracking and auditing purposes. There will be no need for facilitators and software to conduct transactions or to track activities. This is important because such go-betweens often form weak links that can be hacked.
Reducing human errors
As smart contracts show, eliminating intermediaries and using a system that verifies transactions on both ends while also creating an immutable ledger introduces automation to the process. This reduces the need for human input. In turn, this reduces the risk of human error, which has been the cause of many security breaches. Blockchain can reduce the need for human inputs in other ways as well.
A company might set up strong password protocols, for example. However, if employees don’t protect their passwords and confidential information, hackers might obtain the passwords. Rather than hacking the code, many hackers now rely on social engineering, getting people to voluntarily or accidentally divulge information, such as passwords.
With blockchain, it’s possible to verify devices without a need to provide a password or login. The device could be given an encrypted identity, such as an SSL certificate, which would then be verified through the blockchain. Of course, if a user were to leave the device laying around, it could be physically compromised.
Distributed data storage
Ensuring the safety of stored data is a major cybersecurity concern. If unscrupulous parties can hack stored data, they may gain access to sensitive information. Blockchain allows for data storage to be distributed. Simply by moving data away from centralised databases, blockchain makes data stores less appealing targets.
Further, data can be divided into “chunks” and scattered around the web. Let’s say a company is storing payment information. What if the company divides individual credit card numbers into four parts, and distributes each part to a different area via a blockchain? Or what about storing a credit card number in one place, the card expiration date in another, and the security pin in yet another? Now, even if a single database is hacked, most of the data remains protected.
Is blockchain the answer to all of the security needs? Most likely not. Certain vulnerabilities, such as human error, will remain, and blockchain-specific vulnerabilities could emerge as hackers dedicate more resources to compromising the technology.
Nevertheless, the cybersecurity solutions that blockchain developers are working on look promising. The distributed, immutable, and encrypted nature of blockchain may produce several advantages. Still, while there are plenty of reasons to be optimistic, it’s important to remember that blockchain is far from being a silver bullet.