Cybersecurity Budget for 2023
Dec 05 2022
Cyber Strategy
As 2023 approaches, it is time to plan the next year budget of the company, and cybersecurity spending must be prioritized.
Blockchain technology has significantly transformed data storage and transfer, enabling more secure and transparent transactions across various sectors. However, cybercriminals have found ways to exploit blockchain technology for their purposes. As such, it is crucial to understand the potential entry points that cybercriminals can leverage to compromise the security of a blockchain network. This article will explore various vector attacks cybercriminals can use to compromise a blockchain.
In a 51% attack, cybercriminals seek to take over more than half of the network's mining hash rate by taking over most validator nodes. These attacks primarily focus on proof-of-work blockchains, which rely on "miners" to confirm transactions and add new blocks to the chain by solving difficult mathematical puzzles.
Attackers with 51% of the network's hashing power can manipulate the blockchain in several ways, including reversing transactions, double-spending coins, and stopping other miners from adding new blocks. In 2020, cybercriminals took over 57% of the total hash power of Grin, a privacy-focused cryptocurrency, causing the cryptocurrency blockchain to halt payouts.
The character Sybil from a book published in 1973 about a woman with dissociative identity disorder inspired the attack's iconic nickname. With a Sybil attack, cybercriminals use a single node to create many fake identities. Sybil attacks employ false personas to seize control of a company or system through overwhelming influence.
The manipulation of transaction validation and the creation of fraudulent blocks are just two examples of the damage that Sybil attacks can do to blockchain networks. They can also cause network centralization if the cybercriminals control too much of it.
Cybercriminals isolate a single node from the network to take control of many nodes in the blockchain network. Next, they overwhelm the network with fake nodes, all of which attempt to make contact with the compromised node.
By rerouting incoming and outgoing traffic, the cybercriminal can isolate an individual node from the rest of the network, making it more difficult for that node to communicate with other nodes, validate transactions, or even launch additional attacks such as double spending or denial of service.
Distributed Denial of Service (DDoS) attacks are a common type of cyberattack, and they already hit blockchain companies like Bitfinex and OKEx in 2020. Due to the blockchain's decentralized nature, botnets can be extremely large despite being less vulnerable to these attacks. By overwhelming a server with a flood of requests, a distributed denial of service attack can knock out essential financial services like mining pools, electronic wallets, and cryptocurrency exchanges. DDoS botnets can also affect a blockchain's application layer.
Smart contracts are contracts with embedded computer code that carry out their terms automatically once certain conditions are met. The blockchain network stores these contracts, making them both immutable and public.
When parties to a smart contract sign an agreement, they take on some level of risk if the source code of the agreement contains flaws. Financial loss, network outages, and the exposure of sensitive data are just some of the potential outcomes of such attacks.
For example, a reentrancy attack is a prevalent vulnerability in Solidity, a programming language used to write smart contracts on the Ethereum blockchain, that allows untrusted functions in other smart contracts to take control. This attack happens when contract A calls a function in contract B that may or may not return a value. In turn, contract B can call a function in contract A, taking advantage of it for its own purposes.
In a Timejacking attack, cybercriminals target the timestamp of a node on the blockchain network. This attack is similar to a 51% attack but requires less computational power and may be easier to carry out. It takes advantage of a theoretical flaw in the way Bitcoin handles timestamps.
Cybercriminals introduce many false peers into the network with incorrect timestamps, causing the node's network time counter to be reset and forcing it to accept a new blockchain. In this way, cybercriminals can control the node's capacity to verify transactions and add blocks to the blockchain. This poses a threat to the security of the blockchain and may disrupt the network.
Blockchain networks are built to be secure, and their popularity is growing but not impenetrable. Knowing the different kinds of attacks that can be launched against a blockchain network will help the company better prepare for and prevent them. That means keeping up with the most recent threats and vulnerabilities and implementing strong authentication and access controls.