How Blockchain Security Can Keep Your Crypto Safe?

With the rise of cryptocurrency and the increasing adoption of blockchain, ensuring the safety and security of your digital assets is more important than ever. Blockchain technology might look tamper-proof. However, like any technology, it is not immune to security threats. Let's explore what these threats are and what are some of the best practices to avoid them. But first, it is important to understand different types of blockchains.

Types of blockchains

Public Blockchains:

  • Anyone can join and validate transactions

  • Transactions are public and transparent

  • No restrictions on processors

Private Blockchains:

  • Restricted to business networks

  • Membership is controlled by a single entity or consortium

  • Transactions are private and often require permission to view

Permissioned Blockchains:

  • Limited to a select set of users with granted identities using certificates

  • Transactions are private and often require permission to view

  • Membership is controlled by a single entity or consortium

Blockchain security risks

Cyberattacks can be a major threat to blockchain technology even if the ledger of transactions is near-impossible to tamper with. The most common cyberattacks are code exploitation, stolen private keys, and employee computer hacks.

Code exploitation happens when cyber criminals exploit structural vulnerabilities in the code of a blockchain system to carry out malicious activities such as stealing funds or manipulating data records.

Stolen private keys put someone's digital signature susceptible to theft; if a cyber criminal were to gain access to these keys, they could pose as the signature's owner for malicious purposes.

Lastly, employee computer hacks involve cyber criminals gaining access to personnel data by somehow infiltrating the server where it is stored.

How to ensure the blockchain is secure?

Blockchains need to function on a secure and resilient infrastructure. Thus, when establishing a private blockchain, proper security protocols must be in place to ensure secure operation. Business risks such as financial implications, reputational factors, and compliance requirements must also be considered.

On the other hand, governance risks mostly arise from decentralised blockchain solutions and must involve strong controls on decision criteria, governing policies, identity and access management.

Administrators must create a risk model that addresses all business, governance, technological, and process concerns to execute a blockchain solution security model. Next, they must assess the blockchain solution's dangers and develop a threat model.

These measures can be based on:

  • Implement blockchain-specific security mechanisms.

  • Use standard security controls.

  • Implement blockchain business controls.

It is worth mentioning that Scallop Chain is a regulated and secure blockchain to store your cryptocurrency or build decentralised applications (dApps). With its focus on security, scalability, and compliance, Scallop Chain offers a trusted and reliable option for individuals and businesses looking to leverage the power of blockchain technology.

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