- February 26, 2021
- Posted by: Contego Inc.
- Category: Technology
Blockchain and Crypto. These are the latest buzzwords that have been taking the modern tech world by a storm. Many businesses and individuals are grappling to get onboard before the ship cruises away. But is it worth it? That’s the big Question!
Cryptocurrencies like Bitcoin, Ethereum, and XRP are tipped to reshape the future of global finance, which raises a few eyebrows regarding security posture. As cryptocurrency continues to rise in popularity, so does the risk of cyber threat actions that only grade-A cybersecurity can neutralize.
Blockchain is also marking its position as a go-to technology with numerous applications, including recording transactions made with cryptocurrencies. Its wide application in various sectors like education, banking, and trade also raises cybersecurity concerns.
In this section, we’ll expound more on:
- What is cryptocurrency
- What is blockchain
- How cryptocurrency and blockchain may impact the security of your business
- Positive impacts of cybersecurity and blockchain
So let’s get started!
What is Cryptocurrency?
A cryptocurrency is an electronic form of virtual or digital money/asset that serves as a medium of exchange. It leverages cryptography to add an extra security layer making it practically impossible to duplicate or double-spend.
You’re probably wondering; if it’s cryptographically secured, then how is a cryptocurrency is still vulnerable to cyber threat actions? The problem is that government and regulatory bodies worldwide haven’t successfully figured out appropriate legal structures and norms for regulating cryptocurrencies. And that’s the missing piece of the puzzle that cybercriminals capitalize on (more details below).
What is Blockchain?
A blockchain is a system of recording information and sets of data in a manner that’s impossible to hack, change, or cheat. In other words, a blockchain is a digital ledger of information decentralized across expansive computer networks on the blockchain.
There are several transactions for every block in the chain, and every time a new transaction gets added to the chain, a record of the same spreads across every participant’s ledger. As such, tampering with just one block in the chain raises the alarm in every block. And if a cybercriminal were to hack the system, they would have to corrupt the entire ledger, which is practically impossible.
How Cryptocurrency and Blockchain May Impact Your Business’ Security Posture
As you may know, crypto is built on blockchain, a decentralized system that plays well in addressing various cybersecurity concerns. One of the most predominant cryptocurrencies is Bitcoin. Thanks to the blockchain’s distributed nature, Bitcoin offers users an anonymous, reliable, and secure way of transferring funds. And crypto’s anonymity is one of the factors that make it a target by cybercriminals. They can buy or sell digital currencies maliciously without attracting any trace of suspicion.
Besides that, businesses trading cryptocurrencies are usually at risk of cyberattacks that can cause far-reaching losses. These may include:
- Phishing Attacks. This is where cybercriminals target cryptocurrency trading platforms to steal unsuspecting users’ credentials and using them to demand a ransom or profit.
- Malware. By infecting a trader’s computer with malware, a hacker can enter the mining systems and steal the computer’s mining resources. Also, a criminal can use this technique to steal currencies from online wallets.
- Hacked Trading Platforms. By compromising trading platforms, cybercriminals can easily access users’ credentials and steal funds from their accounts.
Overall, the downsides of cryptocurrency anonymity make it favourable for running illegal errands. Cryptos are increasingly being misused in facilitating ransomware attacks as well as money laundering. What’s more frustrating is that tracking down and prosecuting individuals responsible for such crimes is hard.
How Blockchain Enhances the Security Posture of Your Business
So far, one thing is clear; blockchains and cryptocurrencies are practically correlated. However, from the explanation above, you notice that the downsides lean exclusively towards cryptos (and not the blockchains), right? Blockchain consists of three core features that make it incredibly resourceful to cybersecurity. These are decentralization, transparency, and immutability.
A decentralized system is one where information is duplicated across multiple servers to bolster security. Every participant’s ledger has a node that hosts the blockchain. When a new node gets introduced, the entire ledger must be downloaded to update the information across all decentralized servers. Therefore, if a cybercriminal tries to tamper with recorded information, they would have to destroy every node, making it an impossible mission.
An immutable object is unable to be changed. Thanks to the integrated nature of nodes, they make data solidly intact. What’s more, all nodes continually verifying and updating information makes the blockchain system very secure. Likewise, if a cybercriminal attempts to interfere with any data, they would have to hack several blockchain nodes simultaneously.
Transparency can either be an advantage or a drawback based on the situation at hand. Every transaction on a blockchain is usually visible publicly, meaning there’s no end-to-end data encryption. You can’t tell who owns a wallet other than the fact that they could be transferring funds from a personal to an exchange wallet. Hackers can take advantage of that (transparency) plus the anonymous aspect to stage malicious attacks on unsuspecting users who may have exposed their wallet addresses.
However, that data isn’t usually encrypted doesn’t necessarily mean that’s not possible. There are some blockchains tailor-made to encrypt data, plus there are apps that facilitate the same for safer storage. The bottom line is, blockchain offers a hack-proof, secure, and safe data storage system hence optimizing cybersecurity.
Over a decade since the launch of the first cryptocurrency, Bitcoin, digital currency is only growing stronger and more valuable together with supporting technologies like blockchain. Most people were doubtful about the invention, labelling it the biggest internet scam, but today, cryptocurrency is reshaping the digital landscape.
However, the technology has some loopholes that cybercriminals are leveraging to stage malicious attacks and defraud innocent users. The good news is, businesses and users that deal with cryptocurrency can avoid falling victim to these attacks by bolstering their cybersecurity systems.
If your business allows cryptocurrency transactions and you haven’t optimized your security posture yet, we’re here for you. Contego is a company consisting of a team of IT professionals specializing in cybersecurity and risk management consulting. We can help your business develop a structured, enterprise-wide IT approach to optimize and secure your business. So don’t be left behind! Arrange a FREE cyber threat assessment with our experts today!