Blockchain and web 3.0 can be risky places to live and work. How well do you know the vulnerabilities and attack vectors present in the industry today? The blockchain space is an emerging and budding industry. Therefore, it is expected that things could go wrong.
Who are Bad Actors?
Bad actors are entities attempting to circumvent or breach computer security. They are you adversary who try to shut down your system or steal your most priced assets. These are the people you defend yourself against when you follow strong security protocols and practices.
Bad actors would look to make quick gains here and there off people who lack knowledge. And some investors will lose money. These are some of the issues that come with a budding industry like the blockchain and web 3.0.
Not Just Hacks and Backdoors
However, it’s not as simple as hacks and backdoors. $350K of board apes were stolen recently due to a hack of the BAYC discord server. It is clear to see that there are many potential weak points with respect to user and account security. Before we then come to the discussion of Layer 1s being tampered with. And stopping block production, as was the case with Solana. There are vulnerabilities that are related to the user and account security.
Any IT security professional will tell you that risks and vulnerabilities are everywhere. It is almost impossible to keep every aspect of your infrastructure protected every time. The approach to security has been threat assessment, constant monitoring, and preventive measures. Even at this, there is the human factor. Humans remain a weak link and are often unpredictable. Human errors are inevitable regardless of the amount of scenario planning, or in-house security awareness.
Attacks on the consensus mechanism
An attacker can compromise consensus by controlling 51% of the net worth. This is why consensus mechanisms are designed to make it unfeasible to perform a 51-percent attack. Consensus magnesium depends on having the majority of miners acting honestly out of self-interest. This is specific to proof of work. So, in a 51% attack, a group of miners that control a majority of the hashing power could launch an attack. They have the ability to mine the majority of the blocks and the deliberate fork the blockchain to execute double-spending.
Double-spending can only be done on the attacker’s own transactions for which he can produce a signature. Double-spending your own transaction is profitable if you invalidate a transaction and you get an exchange payment or a product without paying for it.
Phishing attacks
Instances of phishing attacks on blockchain networks have increased. Individuals and company employees are frequently the targets of phishing attempts. The goal is to steal the user’s credentials. Bad actors send legitimate-looking emails to the owner of a wallet. Then they ask the user to enter some details by following a fake attached hyperlink. With this, they get access to the user’s credentials and other sensitive information the attacker can then do serious damage to both the user and the blockchain. The user is now vulnerable to follow-up attacks.
Flash loan attacks
Flash loan attacks take place when smart contracts designed to support flash loans are attacked and assets are transferred somewhere else. These attacks exploit uncollateralized loans by manipulating smart contract inputs.
Blockchain structure vulnerabilities
There are blockchains springing up to solve different problems. Each blockchain has a unique architecture. With respect to structures and components, there are security tradeoffs. Private versus public blockchains, for example, differ in whether known entities or unknown entities can join the network and participate in verification. Different network configurations make use of different components, which means different security risks. These configurations create several questions: How is a consensus achieved? How is identity verified? How are sidechains and/or data in transit managed? What incentivizes miners?
As components, algorithms and uses for blockchain continue to evolve, so too will attack tactics and threat mitigation techniques.
