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With its immutability, global consensus, and many others, blockchain may appear to be the ultimate security system. However, new-age security assaults are emerging that are very sophisticated and may do massive irreversible harm.
Understanding these threat vectors is critical for anybody creating and deploying blockchain solutions. And you’ll be reading more into it in this article.
What are Blockchain attacks?
Blockchain attacks require the presence of a vulnerability. These flaws can be any number of problems, such as logic bugs, reentrancy issues, integer overflows, etc. Also, these can be in related software and services, smart contracts, bridges and the underlying blockchain technology.
Generally, a blockchain is a ledger technology used to store and record data. Here are a few examples of blockchain security attacks:
The 51% attack is the most well-known attack on public PoW blockchains. Its objective is to accomplish a double spend or spend the same UTXO twice.
Additionally, most of the hash rate is required to launch a 51% attack on a blockchain, hence the name. A malicious miner who wants to double spend will first make a standard transaction in which they spend their coins on an item or in exchange for a different currency.
They’ll start mining a private chain at the same time. It implies following standard mining procedures with two deviations.
First, their privately mined chain will not include transaction spending on their coins. Second, the blocks they uncover will not be broadcast to the network, hence the “private chain.”
Their chain will expand faster than the honest chain if they control the bulk of processing power. In PoW blockchains, the Longest Chain Rule dictates what happens if a fork occurs. The legitimate chain is the branch with the most blocks and reflects the chain built with the most computational capacity.
Typically, the attacker will broadcast the private branch to the entire network after succeeding in their preferred outcome (i.e. rolling back a transaction or minting new coins.). All ethical miners will abandon the original chain and begin mining on the malicious chain.
In computing, a Distributed Denial-of-Service (DDOS) attack is an effort to render a network resource inaccessible to its users via network flooding with many requests to overwhelm the system.
It’s an assault that can affect any online service, not just blockchains. In a DOS (Denial-of-Service) attack, these requests originate from the same attack source, making it quite simple to avoid.
You can have a mechanism that automatically bans a single IP address if it sends many requests that legal grounds cannot justify.
The distributed aspect of a DDOS assault refers to many distinct sources from which the malicious requests originate.
A DDOS assault is far more difficult to counter since you must distinguish between genuine and fraudulent requests, which is a difficult problem.
It is virtually an ideological dilemma in the context of blockchains. The goal of introducing transaction fees was to reduce spam.
A SPAM attack is a situation where many small transactions are sent to the blockchain to make it slow and clogged. The reason for doing so is to make the chain unusable and kickstart negative news about it.
The goal of introducing transaction fees was to reduce spam, but this is a balance of keeping it inexpensive for normal users and smart contracts and not too cheap to allow spam attacks.
Some argue that requests with a transaction charge cannot be considered spam. While there are occasions when you would perceive a transaction to be spammy, prohibiting them would be a slippery slope.
Censorship resistance is one of the most appealing features of public blockchains. Starting to filter transactions that aren’t included, regardless of the criteria used, would set a dangerous precedent for any blockchain.
A replay attack is a type of cyber assault in which a hostile party intercepts and then replays a lawful data transfer over a network.
The network’s security procedures accept the attack as a regular data transfer since the initial data, which usually originates from an authorized user, is genuine.
Hackers that use replay attacks don’t need to decode the original communications because they are intercepted and re-transmitted verbatim.
Bypassing genuine credentials and replay attacks may be used to access information kept on an otherwise secure network.
You can also use them to dupe transactions at financial institutions, allowing attackers to withdraw money straight from their victims’ accounts.
In other circumstances, hackers will use a cut-and-paste attack to combine bits of several encrypted communications and send the resultant ciphertext to the network.
The network’s response to such an assault frequently provides the hacker with helpful information that may be utilized to exploit the system further.
There are limits to what hackers can do only through replay assaults despite the obvious hazards. Because attackers can’t modify the delivered data without the network rejecting it, the attack’s efficacy is limited to repeating previous activities.
These assaults are also reasonably simple to counter. Simple defences, such as a timestamp in data transfer can deter simple replay attempts.
Servers can also store repeated messages and terminate them after several repeats, limiting how many attempts an attacker can make by replaying messages quickly.