While blockchain is very efficient with respect to transactions, there are concerns about the security of blockchain-distributed ledger technology-based transactions. Vulnerabilities also exist in smart contracts based on some blockchain-based technologies. Some of the issues discovered are that blockchain-based distributed ledger technologies can be hacked like any other IT platform or protocol. If someone chooses to save their private keys on an Internet-connected device, they can be stolen. Once private keys are stolen, it does not matter how secure the blockchain architecture and encryption features are for hackers. Incidents like this have occurred in the past, e.g., the Ethereum attack in June 2016, in which US $150 million was lost.

Nodes of a blockchain can be infected by malware like any other IT system. This has been proven through POC software that was demonstrated by Interpol at Black Hat Asia in March 2015. This POC software was morphed into malware that could circumvent the blockchain node and introduce data unrelated to transactions into the blockchain. Researchers have also demonstrated that botnets have the ability to send messages by utilising the nodes in the network. Fujacks Trojan, a botnet backdoor, has successfully proven that it can remotely control infected computers that are nodes in a blockchain, collect information, and install other malware or tools into the nodes of a blockchain.

Securing Keys. Banks have concerns about transactions’ confidentiality, securing private keys, and the strength of cryptographic algorithms used in blockchain-based transactions.

A blockchain-based smart contract is visible to all users of the said blockchain. However, this leads to a situation where bugs, including security holes, are visible to all yet may not be quickly fixed. Issues in Ethereum smart contracts, in particular, include ambiguities and easy-but-insecure constructs in its contract language, Solidity, compiler bugs, Ethereum Virtual Machine bugs, attacks on the blockchain network, the immutability of bugs, and the fact that there is no central source documenting known vulnerabilities, attacks, and problematic constructs.

WHY VERACITY FOR BLOCKCHAIN RISKS

Veracity's focus is on cybersecurity-related services. Our team includes members certified as CPA, CISSP, CISA, CISM, CRISC, CGEIT, ISO 27001LA, etc. and have several years of relevant experience to manage such projects.

We conduct our assurance engagement against established standards used by auditors to assess the internal controls of a blockchain distributed ledger deployment. The control objectives and criteria vary based on the scope of the engagement and client operations. The relationship between the organisation deploying the blockchain and the purpose it serves must be viewed to help determine the controls that should be included in the engagement. Hence, our engagements are usually risk-based. In addition, the impact of the blockchain distributed ledger technology adopted in financial areas on the organisation's financial statements will also be a determining factor as to whether required controls are covered in the scope of the engagement.

Endpoint Vulnerabilities

When we think about the involvement of humans in specific, this has more to do with a point where human intervention can be thought about, and the nearest occasion is with computers, as they are used to develop blockchain applications. The vulnerability looms large during the input and output of data during the process of blockchain development.

Blockchain Security issues with Security Key

To access any blockchain data, public and private keys play a very vital role. These are the two types of keys, which are a string of cryptic characters entrusted with the action of protecting blockchain data. But as are other critical codes susceptible to data hacking in particular, blockchain data is also vulnerable to being either hacked or stolen by hackers, who can even go to that extent by attacking the weakest point of your whole system.

Risks through Sellers:

Buying any type of application from vendors carries a certain amount of risk. Blockchain applications are no different. We have also heard about smart contracts connected to blockchains, which are undeniably faster, transparent, and conflict-free ways of exchanging any high-profile or critical document. However, blockchain products involving smart cards are more vulnerable, and care should be taken to avoid any threats.

Data Upgradation:

Usually this does not figure as a threat concept for any software application scaling up, unless there is malware that gets downloaded along with the new version to be scaled up to. However, the blockchain security risk could be more evident here, as after certain initial upgrades, the additions tend to happen as an entire block.

Blockchain code not being tested correctly:

Software testing plays a huge role in any type of project. Especially blockchain applications, which have to do more with data security. An improperly tested code can be susceptible to cyberattacks.