Blockchain Vulnerabilities: Imperfections of the Perfect System

The whole cryptocurrency and blockchain craze has attracted both fans and critics of the new tech, but the flip side is that it has lured cybercrooks, too. After Bitcoin prices reached the mind-blowing point of $20,000, malicious players got busy looking for weak links in the blockchain. The bad news for regular users is that threat actors have evidently found imperfections in the way cryptocurrencies are stored and transferred.

If a cryptocurrency exchange gets hacked because it has gaping security holes, such as improper handling of wallet keys, blaming it on Bitcoin and the blockchain is a misconception. It’s like securing the door to your house. If you lock it and lose the keys, and thieves find them and rob your place, it won’t mean that the lock is lousy – it’s the human error to blame. All threats to the blockchain, therefore, come down to people’s negligence, overconfidence or indifference to the fundamentals of crypto-security. To prevent hackers from compromising cryptocurrency assets, it is imperative to know the sources and vectors of their activity at different levels.

Impact at the Network Level

Cybercriminals often use DDoS attacks to disrupt the IT infrastructure of well-protected companies. To pull off an incursion like that, they tend to stick with the following workflow:

First goes a network scan according to a predefined scenario that varies from case to case. The goal is to identify potentially vulnerable nodes. The selected nodes undergo an attack.

For instance, Lightning Network, a second-layer solution providing payment channels for the Bitcoin blockchain, fell victim to a DDoS attack in March 2018. The incursion was orchestrated by an anonymous hacking crew calling themselves BitPico, which leveraged a set of automated tools capable of connecting to hundreds of nodes. Lightning Network developers never actually found any vulnerabilities back then, (Read more...)

*** This is a Security Bloggers Network syndicated blog from InfoSec Resources authored by David Balaban. Read the original post at: http://feedproxy.google.com/~r/infosecResources/~3/Bo9GXscM_lI/