Security in Blockchain Systems: Precautions and Cyber Attack Prevention

Blockchain is renowned for its security and transparency, as the recorded data cannot be easily altered or forged. However, the Blockchain system is not 100% secure; there are still risks of attacks and vulnerabilities to be cautious of. This article will analyze the security precautions in Blockchain and recommend methods to prevent cyberattacks.

Common Attack Patterns in Blockchain

51% Attack 

If an attacker controls more than 50% of the hashing power of a Proof of Work (PoW) network, they can alter data, such as reversing transactions or creating fake blocks.

Example: An attack on a small coin network with low hashing power.

Sybil Attack

The attacker creates a large number of fake accounts or nodes to dominate the Blockchain network.

Used in systems that rely on voting from nodes, such as Proof of Stake. (PoS)

Smart Contract Vulnerabilities

Vulnerabilities in smart contracts, such as poorly written code, can be attacked using methods like the Reentrancy Attack.

Example: The DAO attack on Ethereum, which resulted in the loss of millions of dollars.

Phishing Attack

Users are tricked into revealing personal information, such as private keys, through fake websites or emails.

Routing Attack

Intercepting data between nodes in a blockchain network, especially during the data transmission phase.

Safety Precautions regarding Blockchain

• Choosing a Blockchain network: Choose a network with a large community of users and developers, such as Bitcoin or Ethereum, which are more stable and have better attack prevention.
• Management of Private Key: Private Key is the heart of security. If lost or stolen, it could result in the loss of all assets. Avoid storing keys online or on devices connected to the internet.
• Using Smart Contracts: Thoroughly review and test the Smart Contract before use to reduce vulnerabilities.
• Software updates: Always use the latest version of the software and wallet to prevent vulnerabilities that may have been fixed.
• Choosing an Exchange and Wallet: Use services that are reliable and have high-security standards.

Preventing cyber attacks on Blockchain

• Strong Proof of Work (PoW): Increase security by distributing mining power across the network to reduce the likelihood of a 51% attack.
• Multi-Signature System: Transactions must be approved by multiple keys to reduce the risk of a single Private Key being stolen.
• Data encryption: Use advanced encryption technology to protect data on the network.
• Smart Contract Code Review: Hire an expert to audit the code for vulnerabilities before use.
• True decentralization: Support node distribution to avoid single point of failure issues. (Single Point of Failure)
• Educating users: Educate users about safe Blockchain usage, such as avoiding phishing and managing private keys.

Case Study: Past Attacks and Lessons Learned

The DAO Hack (2016):

A vulnerability in the DAO's Smart Contract on Ethereum led to a theft of 60 million dollars.

Lesson: It is necessary to thoroughly review the code.

Verge 51% Attack (2018):

The Verge network was attacked 51% multiple times in a single year.

Lesson: The PoW system should have sufficient mining power and the network should be more decentralized.

Although Blockchain is a highly secure technology, it is still vulnerable to attacks and various vulnerabilities. Understanding precautions and using appropriate preventive measures, such as managing private keys, auditing Smart Contracts, and choosing reliable services, will help make Blockchain usage more secure and stable in the long run.