In the recent past, several reports on cyber breaches or attacks have led to the loss of private and valuable data. Cyber Incident and Breach Report reported that some cyber breaches had impacted nearly 281.5 million persons. The recent cyber-attacks and frauds have prompted demand for better data or information protection regulations advocating for individuals and firms to tighten their cybersecurity systems. One of the ways to protect against cyber breaches is by the use of blockchain technology.

Even though blockchain technology offers a tamper-proof ledger, the blockchain networks are subjected to fraud and cyberattacks. The cyber attackers can maneuver known susceptibilities in blockchain structure and have achieved in various frauds and attacks. Sixty million USD was stolen from DAO (Decentralized Autonomous Organization), a venture capital funding running via a decentralized blockchain stimulated by bitcoin. A hacker stole 73 million USD worth of customers’ bitcoins from Bitfinex- Hong Kong-based, one of the globe’s largest cryptocurrency exchanges, Bithumb-one of the Bitcoin and Ethereum cryptocurrency exchanges, was hacked where hackers compromised thirty thousand users’ information and stole USD 870,000 worth of bitcoin. Several reports on massive cyber breaches, which led to the loss of valuable information, have been reported in the recent past.

There are four main ways fraudsters and hackers can compromise blockchain security: 51%, routing, Sybil, and phishing attacks.

Phishing attacks

This refers to a scamming attempt to gain a user’s credentials. Attackers send wallet key owners emails devised to look as though they are originating from a genuine source. The emails request users for their credentials using counterfeit hyperlinks. Having entry to a user’s credentials and other sensitive information may lead to losses for the blockchain and the user network.

Routing attacks

Blockchains entrust on real-time, vast data transfers. Fraudsters can hijack data as its dispatched to internet service providers. For the routing attack, blockchain participants normally cannot see the threat. Therefore, everything appears normal. Though, behind the scenes, attackers have obtained confidential currencies or data.

Sybil attacks

Here the fraudsters make and use several false network identities to flood the network and finally crash the system.

51% attacks

Mining needs a large amount of computing power, particularly for large-scale public blockchains. But if a group of miners or a miner could rally enough resources, they could gain more than fifty percent of a blockchain network’s mining power. Accessing in excess of 50% of the power implies possessing control over the ledger as well as the ability to manipulate it.

Blockchain technology deals with security problems as well as trust in many ways: One, new blockchains are often stored chronologically. This means that they are often added to the “end” of the blockchain. Observing the, for instance, Bitcoin’s blockchain has a place on every chain, referred to as a “height.” It is tough to go back and change the block’s content after a block has been included at the end of the blockchain. To change the block’s content, the majority must reach a consensus to make the changes. This is possible since every block has its hash, along with the block’s hash before it and the previously referenced time stamp. A math function creates hash codes that turn digital data into a string of letters and numbers. In a situation that data is edited or changed, the hash code changes too.

For the hacker to be successful in hacking blockchain, it will require the attacker to concurrently control and change 51% of the copies of the blockchain to make their new copy the majority copy and, therefore, the agreed-upon chain. For such an attack to occur, it needs a vast amount of resources and money as the hackers would require redoing every block since they would now have distinct hash codes and timestamps.

To ensure the security of blockchain, the blockchain must have the following security features:

Use ledger- the ledger should reflect every transaction within a blockchain. The ledger should be immutable. Current data cannot be deleted or edited. For blockchain technology, this ledger is a decentralized application. Implying that intruders do not access the transaction or any sensitive information from this ledger. Persons can only read the data from a ledger.

Chain of block- in blockchain, every block should have a hash value. These blocks are linked by their previous hash. In case a hacker comes to correct the data, the data’s hash will be altered. It will impact the entire chain. Therefore, it will improve the protection of sensitive information or data.

Decentralized- blockchain is a decentralized application. Primarily it will support peer-peer communication. Thus, a network node is regarded as a computer. These several nodes should have a copy of the distributed ledger. This should be approving the transaction. In case one of these nodes doesn’t agree to a transaction, it can’t proceed, which means that the transaction is prevented.

While developing a blockchain application, it’s essential to consider security at each layer of the technology stack and manage permissions and governance for the network. A comprehensive security approach for blockchain solutions comprises utilizing technology-unique controls and conventional and current security controls. Examples of security controls to blockchain solutions constitutes:

Identity and access management, data privacy, smart contract security, key management, transaction endorsement, and secure communication.