Blockchain security has become an important part of its growing popularity.
With blockchain security it is very difficult for any block within a blockchain to be altered or modified, which helps prevent fraud. Additionally, identifying codes built into each block allow for transactional data to be easily traced.
Yet, it’s not foolproof, and even blockchain has cyber risks, especially with its increased usage for transactional data to be quickly and easily processed.
First of all, there are vulnerabilities at blockchain endpoints. While blockchain has been touted as virtually “unhackable,” it’s endpoints that are far less secure.
For example, the result of bitcoin trading or investment may be a large sum of bitcoin being deposited into a “hot wallet,” or virtual savings account. These wallet accounts may not be as hacker-proof as the actual blocks within the blockchain.
Also, to facilitate blockchain transactions, several third-party vendors may be enlisted. Some examples include payment processors, smart contracts and blockchain payment platforms. These third-party blockchain vendors often have comparatively weak security on their own apps and websites, which can leave the door open to hacking.
Another blockchain security issue is the absence of clear regulatory standards. Since there’s little standardization in the blockchain world, developers have a challenging time benefiting from the mistakes of others.
Analysts insist that scalability issues also exist. Today’s blockchains are the largest ever built, and as the technology continues to gain in popularity, blockchains are only going to get bigger. This has caused some experts to be wary, simply because these large-scale blockchains are untested.
Common concerns center around the issue that as the blockchain ecosystem grows, additional vulnerabilities may be discovered and exploited, or that the tech infrastructure that supports blockchain will become more prone to simple mistakes.
There’s also the matter of insufficient testing given blockchain’s newness. While blockchain has historically been used for cryptocurrency trades, it’s increasingly being used in other fields.
The problem is the coding used in non-cryptocurrency applications tends to be untested and highly experimental, meaning that hackers may be able to find and exploit vulnerabilities.
Want to know more? Tonex offers Blockchain Security Workshop, a 2-day course where participants learn how to use a comprehensive risk management framework and system applied to blockchain network.
For more information, questions, comments, contact us.