Blockchain technologies are a digital ledger that is used for the implementation of the distributed central repository, and it does not have a central authority. It provides the ability for the users to record their transactions in a ledger which is a public record for the community. The transactions once published cannot be deleted there are several technologies that were combined with the Blockchain technology to offer more applications. The use of Blockchain and cryptocurrencies together with other computing technologies to come up with modern currencies of cryptocurrency, the electronic money is protected using cryptographic mechanisms, unlike the central repository. The bitcoin is the Blockchain approach product.

The currency of Blockchain systems issued in the storage of values and not just information. There is a digital wallet attached to the Blockchain technology where software enables storage of the electronic transactions. The wallet is used for transactions transferred from one wallet to the other. The participants each get a record online making it difficult for any attempt to change the record or forge the transactions at a later time. Many blockchain technologies focus on the storage of wealth, but others are for contracts. There are many new technologies for Blockchain being continuously developed to facilitate the new demands and to enhance the efficiency of the system.

There are other Blockchain technologies limited to given companies or specific people. Blockchain technology has incorporated existing technologies in a way that can help in addressing the problem. The document explores the fundamental aspects of blockchain technologies where transactions are validated by the users. While technology has offered benefits, it is not a silver bullet. Some issues should be explored regarding the security challenges presented by Blockchain technologies.

Blockchains are simply absolute digital systems deployed in a distributed environment and normally without a central authority. At their most fundamental level, they allow a group of users to document transactions on ledgers that are visible to that group in a way that no transaction can be edited or deleted once published. This technology was introduced around 2008 when it was used to facilitate the growth of electronic currencies where digital money transfers are carried out within a distributed environment. Blockchain has led to the success of electronic commerce systems like Ripple, Bitcoin, Ethereum and Litecoin.

Nevertheless, the technology is largely applied for a range of applications. The most crucial aspects of Blockchain technology is that it does away with some of the cyber security fears by consumers. The technology often has key features of persistency, decentralization, auditability and anonymity. With such features, it offers organizations the capacity to save on expenses as well as enhance efficiency. Organizations who wish to employ Blockchain applications should first understand crucial aspects regarding the technology. Blockchain technology has been realized or implemented as cyber money and is actually in use. Nevertheless, the various security challenges in Blockchain transactions, agreement, wallet and software are imminent. Therefore such fundamental security issues with the technology must be addressed. This paper thus highlights the security of applications enabled by Blockchain.

Security challenges

Blockchain settlement

Regardless of the fact that there ought to be a single Blockchain as a result of its sequential connection of the resultant blocks, a Blockchain can be divided to two as the current blocks can be temporarily generated where two different peers prosper  in the process of mining an answer to generate the block simultaneously. Within such scenarios, the blocks that are not selected as the current block by majority peers within the Blockchain network to carry on mining shall become useless. The Blockchain will simply follow the mainstream peers that have fifty percent or more mining ability. Furthermore, where an attacker has fifty one mining ability, where an attacker controls the Blockchain and they can integrate wrong or forged transactions, thus becoming a major problem.

Given that the current operating capacity of the entire Bitcoin network is gaining sensible operating capability already, this is deemed to be challenging. Nevertheless, mining peers associations have been mining actively to improve the capacity of mining. Therefore, this risk becomes a major security loophole, GHash, a top Blockchain mining tool, momentarily surpassed the fifty percent threshold, necessitating the Blockchain community to undergo internal and external modifications so it can handle the risk. Specifically, the chances of dominating Blockchain is tied to the elementary security of its applications and such security vulnerabilities have momentarily affected the economic variables as a result of the nature of the Bitcoin which is often closely tied to the market prices.

Security of Blockchain transactions

Given that the script employed by Blockchain in inputs and outputs is a flexible programming language, various transactions can also be manipulated with the same languages. For instance, a Bitcoin contract that helps to apply Bitcoin for pre-existing authentication, as well as all financial services, involves a method that establishes the contract using a script that integrates several signature methodologies referred to as multisig. Despite the fact that the scripts are employed to address an array of security problems, the chances of a wrongly configured transaction also increase as the script sophistication also increases. A Blockchain application that employs a wrongly configured locking script is rejected as nobody can adopt due to the challenge of generating the unlocking script. The use of contract-type transactions in the verification of script accuracy in transactions is not sufficient.

Security of Blockchain wallet

Bitcoin address which is a Blockchain application is a hash value of normal public key encoded using a couple of personal and public keys. Consequently, the Bitcoin transaction locking script with an address in the form of output which can be unlocked using the unlocking script which has a value signed using the public key of the personal key and the address. The Bitcoin wallet for instance stores data like the address personal key to be used for generating the unlocking script. This implies that loss of data within the wallet will likely lead to loss of Bitcoin as the data is crucial to the Application. The Bitcoin wallet is thus a major focus of concern for hacking attacks.

To improve the security of the application, multisig has been introduced for multi-step signatures. The fact that multisig only allows transactions when more than one signatures exist, this depends on the environment and can be employed as a feature of redundant security of the wallet. For instance, when multisig is set on an online Bitcoin wallet and set to necessitate the owners personal signature as well as the online wallet site signature when a transaction is initiated within the wallet, illegal withdrawals could be averted given that the owners personal key has not been stored, even in a circumstance that the web-based wallet site is seized by a malicious attacker.

Nevertheless, multisig is still being improved into services that consent withdrawal from the web portal only through biometric authentication or different equipment that employs a two-factor authentication or other secondary measures. The main solution to malicious attacks on the Blockchain application is the cold storage type wallets that are offline and do not rely on the internet such as paper Bitcoin and physical Bitcoin.

Other approaches such as hardware-based Bitcoin wallets have been employed to minimize the risk with regard to the vulnerability of online transactions. Hardware wallets such as Trezor records the key within a tamper proof system linked to the computer via a Universal serious bus, this is only when applied and the signed transaction is exchanged using the domestically stored key and only in situations that the user is authenticated. This simply implies that the storage unit is linked only when the need arises to create a Bitcoin transaction, and staying in cold storage like state the other time. Nevertheless, it is much secure as opposed to cold storage as there is an additional security feature for authentication, challenges like lack of friendliness to the user and loss of cold storage also hinder the hardware wallet application.

Security of the software

Bugs and vulnerabilities used in Blockchain applications can also be serious. Given that Blockchain developers explicitly explain all application processes, the application core software remains a crucial reference from the fact that the explicit processes of the early application system are known widely from earlier implementations. This public knowledge also comes with a challenge as hackers have so much information for themselves to aid them uncover weaknesses of the application and attack.

Nevertheless, even when the core software which should be reliable and secure, is not immune from the challenges of software malfunction like loopholes. An example of such a bug was the CVE-2010-5139 loophole that was realized in august of 2010. The bug lead to an integer overflow, a wrong transaction where half a trillion was brought out as one hundred and fifty four trillion Bitcoin was integrated in a genuine block and the challenge was not mitigated for eight hours.

In addition, there was a loophole in which an application block processed in a higher version was not compatible with a lower version since the database was altered from one platform to another. And given that the version of Bitcoin was also upgraded it led to peers of the earlier version and peers of the latest version to have dissimilar Blockchains for approximately six hours. These two case problems indicate that the overall confidence level of Blockchain application security with respect to blocks having a substantial impact after some time can be affected by a software vulnerability.

Blockchain applications could be breached through

Theft of user identity where attackers could simply steal the identity of users then impersonate them within the ecosystem of Blockchain to carry out fake transactions. There could also be fraudulent agents at the senders or receivers end such that attackers could forge nodes aimed at bringing down transactions, in some cases theft of nodes is also possible where an attacker could impersonate a genuine user and use the user’s credentials to carry out fraudulent Blockchain transactions.

Malicious attackers could also target miners of Blockchain applications such as Bitcoin from the basis that the access levels of miners have previously had instances of malware being received through social media or downloads. Attackers could also breach the availability of distributed nodes where they could carry out attacks aimed at denial of service on the Blockchain applications and ecosystems and hence bringing down the entire service. Attackers could also inject infected code into the distributed ledger as evident from the demonstration by Kaspersky Labs, such code could be simply injected into nodes then spread to the entire network.

The other vulnerability would be a reputational risk where since the Blockchain system is established on the values of integrity and trust, attackers could intentionally breach information in a few areas leading to lose of consumer trust and confidence which could, in the long run, result in the collapse of the entire Blockchain ecosystem. There is also target reconnaissance where the ecosystem appreciates transparency and openness where all users can view all transactions, attackers could then sue such public visibility to study the behavior of the transaction then come up with an attack strategy.

Finally, miners and users could bypass off-boarding and onboarding of nodes giving attackers the ability to breach the Blockchain ecosystem, vague Blockchain applications will be seen to compromise personal details or transaction information from individuals or nodes. It is therefore for Blockchain applications to first realize global adoption. Gaining trust from consumers shall be a key determiner together with usability and productivity. Trust is a consequence of peace of mind and system security or reliability for users, and thus when Blockchain applications achieve robust cybersecurity, such expectations could be met.

Privacy concerns

While advantages of crypto-currencies include pseudonymity, many possible Blockchain applications need contracts and smart applications to guarantee connections to known identities, and hence bring out crucial issues regarding privacy and data storage security as well as accessibility to the ledger. Though no technology can guarantee a hundred percent security, no one has so far been able to breach the decentralized architecture and encryption offered by Blockchain applications. The identity levels applied in Blockchain technologies are quite unique and provide a better level of confidence that any party is whoever they claim to be.

Nevertheless, such claims do not pre-empt the calls for every organization that adopts Blockchain technology to look at how security and privacy can help them during design. Specifically, drawing public confidence in Blockchain applications will imply framing the discussion proactively around the ideologies of security, value, and trust.      The other issue with the technology is that for a person to be able to access the network, the network has to have of the individual’s login credentials together with the individual’s identifier. Within a centralized system, such credentials only need to be kept in a single location.

For Blockchain applications, such information is stored within all nodes that have Blockchains that the person wants to interact with, in which case some may be compromised easily as opposed to in the case of a secure single central server. This is specifically a concern in cases of biometric identifiers that were once compromised by malicious attackers that cannot be easily altered. Furthermore, the nature of the technology implies that all data stored within the Blockchain remains stored in the form of additional blocks are integrated to the chain implying that crucial private information might remain in cyberspace forever.

The other challenge is that absence of one major authority can be hard to prevent malicious attackers from getting access to subtle information once the login credentials of the person have been compromised. For instance, when a person hacks someone’s bank account details it’s easier to notify the bank to cancel and change the details. For Blockchain technologies, it could be hard to update such login credentials and even easier for a hacker to simply lock the authenticated user out by just updating their details once they gain access.

Apart from that, it is also a challenge from the perspective of security as it leads to uncertainties with respect to who is responsible for notifying users when their login credentials are breached. Many countries have laws on data breach notification that demand that the custodians of personally identifiable information should give notice to the owners of such information in case their details are compromised. It remains a challenge how such laws will be effected n Blockchain technologies where the network is distributed or their applicability at the moment.

A huge challenge facing data privacy currently is the predicament created by the joint advances in data cataloguing, data retention, and data search abilities. As the world creates more data about citizens, and as the data is continually cataloged and refined to be easily searched, such data becomes perpetual and visible to a lot of people in a manner that has never been seen before. Blockchain applications are likely to perpetuate such trends. One of the benefits of Blockchain is that it stores all transactions within its genesis block hence allowing for almost flawless record keeping. As the amount of transactions stored on Blockchains increases, so does perpetual records of such transactions.

Going forward, it might be ideal for each transaction that everyone engages in to be stored within the Blockchain and people may not have any control over where or how such information is used or stored or have it deleted in any way.  Therefore, privacy concerns brought about by such perpetual records are enormous. Such records exist could bring problems for all those who do not want a full record of their entire transactions to existing for eternity. Additionally, there is no evident agreement as to who controls information contained in such records. There is a possibility for Blockchain networks to sell such information without informing the persons who participated in the transactions and the persons may not have any recourse. Without clear regulations on ownership, it might be possible for government agencies or private citizens to have access to such data without the person’s consent.

With the weak or lack of central authority in Blockchain applications, the big data that is in the network might be difficult to amend. Blockchain has replaced the server thus doing away with the need for a central authority as well as enabled transactions via the collaboration who together store the transaction details and finally give a go-ahead for the transactions employing a P2P technology. Blockchain technology has distributed the framework and makes use of peer networks as well as peer computing resources. Practical actions like proof of stack and work have over the years been used to foster the security of Blockchain applications. Despite the fact that the security of such applications is constantly being improved, challenges have continued to emerge with the creation of solutions to the ongoing.

Malicious attackers often try to get their hands on a user’s personal key which is stored in user’s local computers or their smartphones so as to penetrate the applications. Research is ongoing on the use of a secure token or the storage of personal keys securely. This paper presented the security of Blockchain-related applications, indicating a clear need for more to be done with regard to their security. A lot of issues must be put into consideration in the application of Blockchain regardless of the environment deployed.

Blockchain is a foundation of several security challenges even to date, such as wallets, transactions, and software and future research should focus on providing solutions to these problems. User information anonymity must be guaranteed when employing Blockchain applications, moreover, user information must be exhaustively deleted when eradicating the service. Where such information is not destroyed exhaustively, malicious attackers could use the information to fill in the remaining information then attack the application. Consequently, future research should provide a technique to guarantee security by offering a framework for secure use and deletion of Blockchain protocols. It’s evident that studies relating to the efficiency of Blockchain are also needed given that the environment has so much crucial data being transmitted regularly.