Security Challenges in Blockchain

On February 13, 2017

Blockchain has taken the fintech industry, especially the cashless transaction mechanics by storm and has big potential to revolutionize the IT and financial sector in a powerful way. For most people the first thing that comes to mind in Blockchain’s context is Bitcoin and deservingly so, given the popularity of the latter. Blockchain, simply put, is a series of chronological blocks or a ledger of immutable and unchangeable data integrated into a chain. But the word has so much more meaning to it than just the literal interpretation and is ever growing in popularity.

Blockchain is quickly growing from its roots as a cryptocurrency and making breakthroughs in Governments and various industries like healthcare, real estate, and transportation. As bitcoin approaches its highest price of 2019, it is safe to say that the strongest move for blockchain is yet to come. Even Social media giant Facebook has launched its own cryptocurrency called Libra recently this year.

But even as it makes it step towards the big league, Blockchain still has a critical chink in its armour which is the end-to-end security lapses that can be exploited and rob people of their investment. This is both a threat to existing investors and a strong deterrent to fence-sitters and potential investors.

For Blockchain to truly evolve, it has to come up with new ways of ensuring robust and hard-to-exploit security framework and end-to-end dependable and reliable encryption that cannot be hacked by cybercriminals.

Some of the challenges that need to be overcome by the Blockchain industry in order to engender growth are :

  • Lack of Regulations & Standards : Blockchain as a whole has one major problem of not having a universal set of rules and regulations governing all of the Blockchain functions and processes.
  • Untested Code : Code for Blockchain is not properly tested as they should be, before being deployed and even allowed for use at full scale. One major example of this is the 51% problem; this hypothetical threat could materialize if a significant number of participants conspire against the rest of the participants.
  • Public and Private Key Security : These keys are of cryptic length having variable characters. Requiring both public and private keys to access a block is synonymous with blockchain functionality. This represents both its strength and a critical weakness as all a hacker needs is the correct key to access your data and manipulate it as they want.
  • Vendor Risks : Third party blockchain vendors having weak security systems for their own site, flawed code, and even personnel vulnerabilities can expose their clients blockchain credentials.

A third party Security Specialist can do wonders for the end-to-end robust and verifiable security for Blockchain Based solutions.