Over the past two years blockchain is one of those technologies that has risen from a hardly-known and misunderstood technology to something that has generated a storm in the startup and enterprise sector. In a survey conducted by Deloitte, it was found that around 95% of businesses are now investing in blockchain. It has helped in lowering the number of middlemen in business and has brought more efficiency in the way we do business.
Apart from industries in the financial and technology sector, blockchain is also getting highly popular among sectors such as healthcare, logistics, cybersecurity, and even agriculture. And it is an estimation that blockchain is soon going to take over other industrial sectors as well.
However, the blockchain has not recovered from the problems that it generated over the past years. Even after considering it to be the utmost secure technology, there were several major hacks that took place on some of the major blockchain networks which included Bitcoin and Ethereum.
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Frauds and Risks
The security provided by blockchain is still questionable. Let’s consider a few examples in this context:
It was reported by Coindesk that hackers stole around $927 million through cryptocurrency exchanges along with communities that were catering to these. This was achieved by using blockchain technology.
The initial coin offerings (ICO) which were backed by the public blockchains were also under threat last year. One startup was reported to have experienced a security breach during while running their campaign last year and the crypto wallets of the people got emptied automatically by the hackers. Around $800K token went missing overnight, and the founders have to deal with the damages and refund.
Frauds and ICO hacks happen to be common in the present scenario as well. However, security specialists, businesses, and several legislators are working towards ending these cases. Today, almost everyone who has some connection with the blockchain technology is concerned in ensuring the top security and developing creative solutions in several aspects of the business. For extra security, startups are now using protected coin offering or PCO, which ensures asset protection to an investor even when they face a major setback. In case a new regulation or an attack impacts the operations of a company, they can establish a base value that would protect their coin offering.
Security and Privacy
Blockchain technology can create a lot of opportunities, but the risks associated with them are equally destructible. As a solution to this, the blockchain companies need to make security and privacy their top concerns before venturing into something new. The investors and blockchain users are advised to understand the tech stack that an enterprise is using and determine its level of security.
Today, some of the major blockchain projects that are run in the enterprises are permissioned or private blockchains. Unlike the public sectors, private blockchains can be accessed by a selected group of individuals who can validate, record, and exchange data over the ledger.
The practice of building a private blockchain is sometimes regarded to be misguiding. This is because the private blockchain is concerned with the screening of participants where the public one is accessible to almost every other people. But we need to understand that this itself can serve as a hack to protect the technology.
Consider the example of Bitcoin, which has experienced extreme cases of hacking over the years. However, it has turned out to more resilient with each hack and has set an example that public blockchains are far more superior than the private blockchains.
People often get confused between the blockchain hacking and security issues. A blockchain cannot get hacked. You must not consider the security issue of this technology with that of hacking such as the ones carried out on the cryptocurrency exchanges. Similarly, when it comes to normal hacks, its vulnerability arises from the hacks that are generated from centralization. Even when the blockchain technology remains decentralized, there are certain aspects that remain centralized, including the cryptocurrency exchanges. This is an indication that the hackers can attack just one of the aspects in the hope that they can gain access to private information.
The security of the blockchain is concerned with cryptography in some aspects. This technology is decentralized in nature and lays the foundation for its security. However, the aspects of decentralization and distribution are two major areas where people seem to take a lot of interest.
When it comes to data privacy issues, the blockchain operates can store the personal data and reference to it by using special characters that will make the data unreadable.
Moreover, storing the data means that the individual need to hold the responsibility themselves. They can store documents such as passport or license using traditional technology instead of the blockchain, which is certainly more secure as of now. This information can be stored in the standalone database along with the application systems. Moreover, this would reduce transparency and increase the risk of information getting stolen as it is usually spread over different networks. With blockchain, it is necessary to follow the law and regulatory policies in order to share the information which can secure your data to some level at least.
Blockchain technology has the potential to be fully robust, private, and secure technology. Its security is mainly concerned with architecture, workflow, and secure design practices. And as long as it is executed in a proper manner, it can overcome the risks associated with it.
Almost every system that you will find today is full of risks and vulnerabilities. In the technology-driven sector these days, it is necessary to take help of supervising and regulatory frameworks that would help in ensuring that the system remains stable, protected, and competitive all at the same time. This demands for the production of digital products that have protection regulations, cybersecurity, and data privacy. However, the biggest question remains whether we will be able to achieve this feat in the near future and ensure that our private data remains protected from all the possible attacks.