Blockchain for Business Leaders: An Unbreakable Security Solution?

Blockchain technology has garnered significant attention for its potential to revolutionize various industries by offering decentralized, transparent, and secure systems. However, labeling blockchain as an unbreakable security solution would be an overstatement. Like any technology, blockchain has its own set of challenges and vulnerabilities that need to be addressed to ensure its robustness.

Why Hackers Love Complexity 

Slow transaction speeds and scalability are just the tip of the iceberg—ask architects and engineers, and they’ll tell you that implementing a private blockchain can be a nerve-wracking challenge. The sheer complexity often leads to inefficiencies and errors, which is where both cybersecurity professionals and attackers are finding the gaps. 

Add to that the challenge of integrating multiple blockchain platforms that don’t always play nicely together, and it’s clear why many organizations question whether the technology is ready to serve as a foundation for business operations.

Old Threats, New Targets

While blockchain is designed to be secure, it is not impervious to traditional cybersecurity attacks For example, 

• Smart Contract Exploits: Smart contracts, self-executing contracts with the terms directly written into code, can contain vulnerabilities. In 2016, the Decentralized Autonomous Organization (DAO) experienced a hack due to a flaw in its smart contract, leading to the loss of $50 million worth of Ether. 

  
  
  
  

• Phishing and Social Engineering: Attackers often target blockchain users through phishing, aiming to steal private keys and gain unauthorized access to assets. Human error remains a significant risk factor in blockchain security. 

  
  

• 51% Attack: if a single entity gains control over 50% of a blockchain's computational power, it can manipulate transactions and compromise the integrity of the ledger. In oldschool cybersecurity we classify this as a business logic flaw. For instance, in 2020, Ethereum Classic suffered three such attacks, resulting in significant financial losses, and smaller blockchain networks are still targets for such attacks. 

It is important to note that across all of these examples, the vulnerability lies in the weakest component, which is often not the technology itself, but for example the human element on top of the technology. 

The Quantum Threat No One Can Ignore

Advancements in quantum computing pose potential risks to blockchain security. Quantum computers could, in theory, break the cryptographic algorithms that underpin blockchain networks, rendering them vulnerable to attacks. 

While practical quantum attacks are not yet a reality, the advancements in this field will eventually push technology providers and the cybersecurity industry to identify proactive measures and, for example develop quantum-resistant cryptographic methods. 

High-Profile Hacks Shaping Cybersecurity Strategies

We mustn't forget about some of the recent events that have further underscored the vulnerabilities within the blockchain ecosystem. In a significant security breach, suspected North Korean hackers successfully stole $1.5 billion from Bybit, the second-largest crypto exchange. This ups the pot Lazarus Group has reportedly stolen from Western platforms to £5 billion in cryptocurrency, funding Pyongyang's nuclear program. 

But there is a silver lining; whilst these incidents highlight the fact that even prominent platforms may be susceptible to sophisticated state-sponsored cyber-attacks, we also see unprecedented initiative. Just days after the attack, cryptocurrency exchange Bybit, has launched a bounty program to help recover its funds, and is able to do so owing to the unique properties of blockchain which allows tracing of stolen funds as they move through wallets and mixing services.

Is Blockchain Really Unbreakable?

While blockchain technology offers promising features such as decentralization, transparency, and security, it is not an unbreakable solution. Organizations must move beyond the assumption that blockchain is inherently secure and instead adopt proactive programs to get ahead of potential threats.  

At 45 Cyber Labs, we empower businesses that use blockchain technologies through security hardening, risk management, and robust training programs. If you’re concerned about adopting blockchain, get in touch to learn how we can help secure your specific use case.