Learn about the 3 Different Blockchain Hacks

By CIOReview | Monday, June 17, 2019

Transparency, decentralization, and immutability are the salient features of blockchain that makes the technology popular among industries such as legal and healthcare.

FREMONT, CA: Blockchain technology is considered as an impenetrable information repository that can’t be leaked, modified, or destroyed. However, the numerous cases involving blockchain hacks have posed a question over such claims.

Primarily blockchain is considered a technology that will reform several sectors. Transparency, decentralization, and immutability are the salient features of blockchain that makes the technology popular among industries such as legal and healthcare. However, the primary purpose of blockchain has been to secure critical information and assets, whether it’s Electronic Health Record (HER) or crypto-tokens. But the numerous cases of attacks have led to the conclusion that while blockchain may be immune to traditional attacks, it has its own set of vulnerabilities. Here are some insights into blockchain-specific security concerns:

Blockchain Security

The concept of Blockchain thrived on its ability to protect assets and transactions through a decentralized distribution of data and control. As all transactions are replicated across a large number of nodes, modifying or destroying the information will not affect the integrity of the blockchain. Moreover, all data over the blockchain is secured through cryptographic hashing, which ensures that only those with the authorized access keys can access any piece of information on the blockchain.

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Despite such a robust security framework, the blockchain is vulnerable. These unique sets of vulnerabilities have been exploited such that the blockchain hacks in the last year have amounted to $1 billion. The most common types of blockchain hacks are as follows:

Sybil Attack

Blockchain allows a large number of nodes and users to verify transactions. In case of a Sybil attack, various nodes on a blockchain network are controlled by a single entity posing as multiple users. Thus it can sway a majority of the network power, thereby controlling the network decisions.

Denial of Service (DDOS) Attack

In case of a DDoS attack, an attacker floods the targeted machine or resource with a large volume of illegitimate service requests. The overloaded server or node gets too engaged to process service requests from legitimate users. A blockchain DDoS attack operates similarly.

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51 Percent AttackA 51 percent attack implies a single entity is authorized to alter blockchain transaction as it has gained control of the majority of the nodes. Such attacks usually experienced on smaller bitcoin network where it’s relatively easy to amass the majority of processing power.