Blockchain technology has become the go-to secure framework on which we build all kinds of different data systems over the past decade. From banking to healthcare, companies in a wide range of industries are utilizing blockchain to serve their data security needs.
With all the attention surrounding this exciting new technology, it’s become a hot new target for hackers, thieves and other bad actors. Don’t take the blockchain’s security protocols for granted. They offer excellent protection but can’t completely remove the possibility of losing your data. Blockchain security challenges remain.
Protecting your data with the best in blockchain security services can give you complete peace of mind to utilize all that this exciting new technology offers without worrying about someone gaining access.
Let’s take a quick look at what exactly blockchain is, a brief overview of its security features and potential vulnerabilities, and how to add additional layers of security by working with companies that offer blockchain security services.
What is Blockchain?
The term blockchain has been thrown around a lot lately, and many of us have no idea what it means. As for those of us who have heard the word blockchain before, many associate it with cryptocurrency. While some of the most popular cryptocurrencies are built on blockchain technology and that was the first widespread use case, blockchain offers a secure way to do business in all kinds of industries.
Blockchain is a way of managing information and transactions in a decentralized way through the use of a distributed ledger. Everyone on the network has access to this immutable ledger, leading to transparency and a reduction in redundancy when compared to more traditional business networks.
When any new transaction or bit of data is entered, a new block is created and attached to the block preceding it. Think of it as adding links to a chain. Each new link contains data regarding the new transaction, as well as bits of info from the previous chain. This creates an immutable sequence protected by interweaving information from adjoining blocks—sort of like a built-in blockchain security system.
Each time a new block is added to the chain, it is first validated by a group of peers in the network. This generates consensus. That means everyone in the network agrees to the specific attributes of the transaction. The result is that no one, not even a system administrator, can alter a block once it’s been added.
As more and more new blocks are added, each individual link in the chain is tied tightly to the links on either side, permanently locking information so it’s impossible to alter or enter anything between blocks. Any changes would have to be added as a new block and validated. The system was designed in such a way that the security aspects of blockchain are the building blocks themselves.
What are the key aspects of blockchain security?
We’ve seen that blockchain is an incredibly secure way to make transactions and manage distributed databases, but why is that? What makes blockchain a more secure way to manage the things we want to keep private than different types of technologies? Let’s take a deeper look at what makes blockchain secure and how it stands above the others.
- Consensus - When transactions are made in the blockchain, they are validated by multiple different nodes within the peer-to-peer network. This is known as consensus. Once the transaction has been validated, the transaction is considered complete. By validating transactions, we can ensure that they were not made in bad faith. We also cannot sneak in any information that doesn’t belong.
- Cryptography - All the information in your blockchain transactions are secured by cryptography. This is a protocol that secures the information by encrypting data and providing a key to the owner so they can decode the information when they want to access it. Without the key, all the data is just a random sequence of bits that are completely useless to anyone who accesses it. Thus, keeping track of keys in a secure way is crucial to accessing information when you need it and keeping others out.
- Decentralization - Since blockchains aren’t tied to any centralized entity, such as an individual, an organization, or a group, they are considered to be decentralized. Transferring control to a distributed network offers a number of different security advantages, including the facts that it facilitates a trustless environment, improves data reconciliation, limits potential points of failure, and reduces weak points. A decentralized system cannot be corrupted by rogue administrators.
Even with all the inherent security protocols built into the blockchain architecture, there are still security risks in blockchain that make it possible for bad actors to access your data if they can find a way to get your key. Here’s how to protect yourself with common sense practices and blockchain security services.
Protecting Your Investments
With blockchain setting a gold standard in information security, you may wonder why exactly you’d need blockchain security services. The fact is, as secure as blockchain may be, there are still vulnerabilities that can allow hackers and bad actors to gain access to privileged information and steal investments. Understanding the ways hackers access and hijack your information is key to protecting yourself.
So, how do hackers access your information? In short, the biggest vulnerability in blockchain is the key. It’s the way we translate data and authorize new transactions, meaning anyone who gets ahold of it can impersonate us and initiate new transactions without our consent. Here are some spots where that vulnerability is most exposed.
Crypto Wallets and Exchanges
Cryptocurrency wallets and exchanges are some of the main targets of cryptocurrency hacking operations. This is because these kinds of entities store personal keys for crypto, and this represents a vulnerability in an otherwise secure system.
Wallets and exchanges are incredibly popular ways for people to purchase cryptocurrency. Since crypto wallets manage transactions and store keys, hackers will attack them to try to steal keys in bulk, allowing them to potentially drain a large amount of crypto accounts. The wallet or exchange you choose to use makes a big difference.
Crypto wallets and exchanges that offer blockchain security services to keep your investment safe are your best bet. Before you dive in and start buying crypto on one service or another, make sure you do your research. Some are far more secure than others. Choose a wallet that leads the pack in blockchain security services and you’ll have much greater peace of mind.
Hot Storage Devices
Anything that’s continually connected to the internet can be vulnerable to hackers. Storing your personal keys in a file on your computer desktop is not the same thing as keeping them on a piece of paper or flash drive in your desk drawer. Your computer hard drive and cloud drives are going to be considered hot storage, and things like handwritten notes, external hard drives and flash drives that are rarely connected are considered cold storage.
Since your hot storage devices are going to be connected to the internet either constantly or fairly regularly, a simple piece of malware embedded on a site that you visit can run a script to mine for your blockchain keys in the background.
For security reasons, you should never store your keys on a hot storage device. Keeping your keys on a cold storage device, one that isn’t connected to the internet but is still easily accessible, should be a key aspect to your crypto risk management system.
How to secure cryptocurrency
Whether you’re just getting started buying the recent crypto dips or expanding your portfolio, one of the most important steps is to make sure your investment is as secure as possible. Most people have a tendency to buy their crypto on exchanges or wallets, but going this route can make your money a tempting target for thieves.
Recent cryptocurrency hacking statistics reveal that exchanges and wallets are a top target due to the inherent vulnerabilities there. If you’re going to buy and store your crypto assets on these types of platforms, make sure you’ve enlisted the help of a trusted blockchain security solutions provider who offers robust blockchain security services.
Utilize the Best in Blockchain Security Services
Blockchain was designed for security. The kind of security it offers for monetary exchange makes it perfect in industries like healthcare, information technology, and government. That said, blockchain isn’t impenetrable. When you’re working with valuable or sensitive data, it’s imperative that your blockchain security services are providing you with the kind of protection you expect.
Not all security services are created equal, however. The protection you receive from your blockchain security services will only be as good as the service itself. Saving a buck or two by going with an unreputable company can cost you a whole lot more in the long run. Choosing a company that offers top tier protection will ensure your data remains secure and alert you the second it is at risk. Your peace of mind is worth the effort of finding and utilizing the best.