Is Blockchain Secure Enough for Cybersecurity?

Blockchain technology is the subject of much excitement and speculation, even outside of cryptocurrency. Many businesses are now considering how they can implement it into their operations, and its emphasis on cryptography and transparency makes it a seemingly ideal fit for cybersecurity. Still, some security professionals have some lingering concerns.

While new technologies like blockchain can be exciting, trying to see past the hype is essential, especially in a cybersecurity context. Before security firms invest in blockchain solutions, they must ask if they’re secure enough to be worth the investment. In that spirit, here’s a closer look at how secure blockchain really is.

Security Benefits of Blockchain

Blockchain does have several cybersecurity advantages. One of the most publicized of these is its records are immutable. Once a blockchain transaction occurs, it’s virtually impossible to alter the documentation of that transaction.

This immutability comes from blockchains’ unique hashing process. Hashing algorithms give each entry on a blockchain a unique string of characters serving as a digital signature. Because hashes will be completely different even with just one byte of difference between two entries, and this process cannot be reversed, it provides immutability.

These records are also highly organized by design and visible to all users, enabling seamless traceability. Because each hash is unique and every block in the chain also has a unique timestamp, verifying any data transactions on the blockchain is easy. Blocks also appear in the chain chronologically, further streamlining the auditing process for faster security investigations.

This technology’s decentralization provides another security advantage. Storage and verification on a blockchain occur across the entire network, not just one or two devices. By removing single dependencies, blockchains reduce the risks of DDoS attacks or widespread damage from human error.

Blockchain also enables high user confidentiality. While records of transactions themselves are fully transparent, users’ identities remain anonymous, and cryptography ensures they stay that way. In most security contexts, there’s usually a tradeoff between security and user privacy — at least to administrators — but blockchains provide a solution.

Blockchain’s Security Shortcomings

Despite these advantages, blockchain could be better from a security standpoint. Many of its issues stem from factors that can be advantageous in some situations. For example, while blockchain’s immutability improves traceability, it also makes it difficult to correct errors. Because employees can’t edit blocks, they’d have to create entirely new records to replace old ones, which could take considerable time in a workplace with high enough error rates.

Decentralization is another beneficial aspect in some circumstances but introduces other security risks. Blockchain regulation is a new and frequently changing field, with 28 states having unique blockchain laws with varying scopes and requirements. The lack of a centralized authority can also make it less popular with some governments, leading to outright bans in some areas. As a result, governance and regulatory compliance may be challenging.

The anonymity of blockchain systems has made the technology a favorite for cybercriminals, as evidenced by illicit crypto activity reaching an all-time high in 2022. If administrators can’t confidently identify all users, it introduces verification and incident response obstacles.

Blockchain also has high complexity and implementation costs. As a result, businesses may have a difficult time creating a reliable blockchain system, introducing vulnerabilities from human error. The complexity can also lead to slow performance. In most contexts, that means lost productivity and frustrating IT processes, but in a security application, it hinders timely responses to potential security threats, leading to more disruptive breaches.

The Final Verdict

Given these advantages and disadvantages, it’s clear that blockchain has a lot of potential but isn’t as secure as it may seem at first. That doesn’t necessarily mean cybersecurity firms should avoid it entirely, but it does mean they should be careful.

Firms must ensure they have sufficient finances and network resources to support a fast-performing blockchain before implementing one. Keep in mind the process may be more expensive than it initially seems, too, due to complexity and setbacks in implementation. Reviewing the solution’s consensus protocol is also crucial, as each has unique strengths and weaknesses.

While crypto enthusiasts cite consensus protocols as a near-perfect security solution, there were more than 40 51% attacks on major cryptocurrencies in 2019. Teams should review how different blockchains’ protocols work and look through their history for major cybersecurity incidents to determine if one meets their security needs.

Businesses should also test any smart contracts for vulnerabilities or errors before deploying them. Training users on good private key management is also important for safe blockchain usage.

Approach Blockchain With Caution

Overall, blockchain is less secure than many may think, but cybersecurity firms can deploy it safely with the right approach. Responsible, safe blockchain implementation starts with understanding the technology’s weaknesses and how to account for them. Security professionals should tune out the hype and look at the technical specifics of a blockchain solution to decide if it’s right for them.

As this technology advances and regulations around it grow, blockchain governance and security will improve. For now, though, blockchain remains a promising but risky investment. Security teams interested in the technology should approach it slowly and carefully to minimize these risks.