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One of the many promises of blockchain technology is that it allows users to store and exchange valuable information securely and tamper-proof. But how safe is the blockchain?
David Lancashire, founder of Saito, and Sarah Zhang, founder of Points, discussed the vulnerabilities of blockchain and long-term security issues during a panel on TechCrunch Shenzhen blockchain.
When it comes to security blockchain it is very important to identify "security from what and security for what", said Zhang, who co-founded Points, a scalable data collaboration protocol for blockchain for credit scoring and finance.
Security is about how these systems are designed, Zhang said. Take the data as an example, often the data recorded on the blockchain are considered safe. Putting transaction data on the blockchain can be very useful because it allows users to have a universal track of the transaction, but some types of information, such as raw data, if put on the blockchain will probably cause a security disaster.
Zhang said that security actually means implementing a good architectural project for the use case. Some pieces of technology, if put together in the wrong way, can create huge security vulnerabilities.
Economic vs. technical
The security vulnerability of blockchain is not a problem limited to restricted technical problems. According to Lancashire, the blockchain has a very paralyzing long-term vulnerability. Lancashire is the founder of Saito, a terabyte blockchain.
A common misconception about the safety of the blockchain is that it is vulnerable to threats from "hackers in the room," Lancashire said. For him, it is more about economics. For example, one of the real controversies with the recent Bitcoin Cash fork was that the miners started importing hashes from the Bitcoin mining pools. When the power of hashes becomes a commodity that people can buy as much as they want, examples such as the charge-laundering attack – when an attacker finds a way to earn more money than his peers to do the same job – will probably be more common.
Separately, there is also the so-called "51% attack", in which 51% of the domain in hash power will allow the majority chains to launch attacks against minority chains. Lancashire added that many people think that the hash war is over, but it is not. "Nobody attacks cryptographic primitives." People are attacking the economic interest, profitability and people's ability to keep running. "
Apart from the inherent economic vulnerability with current mechanisms, potential threats that could damage community trust will likely cause significant damage, Zhang added. The main aspect of the blockchain is the storage, registration, transfer and distribution of values, so security vulnerabilities risk causing a large amount of asset losses for users.
