A major part of the reason why key industry players globally are betting big on blockchain technology is that it is highly secure. The technology is very often spoken of as one of the most secure technologies that we have ever had.
There is no doubt about that fact. Secured by cryptography, the records on blockchains are nearly immutable and safe against cyber threats. However, there still are exceptional cases where someone may compromise the security of this evidently secure technology and tamper with its data.
Types of attack vectors in blockchain
51% Attack (Majority Attack)
Public blockchains rely on nodes (miners) globally that use high computational power to approve transactions and write them on the ledger. Each of these nodes has the same copy of the ledger at any given time.
No single node can change the data without the approval of the majority of the nodes. But in case a group of nodes controlling a majority of the computing power collaborate, they can alter new transactions and write them in a way they want. They may also tamper with the data previously recorded on the blockchain.
The 51% attack on Bitcoin Gold in 2018 lost almost $18 million due to the attackers being able to double-spend the funds.
Denial-of-Service (DoS) attacks are common throughout the cyberspace. Hackers use a DoS attack to prevent users from accessing the targetted online resource. They achieve this by sending an unprecedented amount of fake traffic to the online resource, causing the server to crash.
A Distributed Denial-of-Service (DDoS) attack is a variation of the DoS attack where hackers use multiple machines to target a single source. While theoretically, blockchains are secure against DDoS attacks, their security strength against these attacks depends on the number of blockchain nodes and the network hash-rate.
Sybil attack is similar to a majority attack, but in this case, a single entity or person creates multiple nodes with multiple fake identities so as to harvest maximum authority in transaction approval. Once they control a large proportion of the network’s voting power, they may outvote the other nodes and block or write transactions as they wish.
First explained by computer scientist Hal Finney, Finney attack is a type of double-spending attack. In this, attacker miners try stealthily adding a transaction to the block they mine such that it sends some of their coins back to their own wallet.
They use the transaction listed on the block to attain some service from a merchant without broadcasting the transaction. And once the service provider delivers the service, the miners broadcast the block that sends the payment back to them and not the merchant.
Proof-of-Stake blockchains are highly vulnerable to long-range attacks. In these attacks, the hackers attempt to rewrite the entire history of the blockchain by starting to tamper with the data on the blockchain from the genesis block. Also known as history revision attack, PoS blockchains are most likely to face these attacks due to costless simulation requiring no miners or computing power and weak subjectivity that makes it difficult for new nodes to identify the main chain.
So, are blockchains secure?
Speaking of blockchain security, the first blockchain network Bitcoin is considered by many as the most secure. However, like all other technologies, even blockchains have their security flaws. The one thing that can be said with utmost surety is that the more decentralised a blockchain is, the more secure it is against any attack.