Traditional cybersecurity vs. blockchain-based solutions: key issues

Web3 enthusiasts sometimes suggest replacing traditional security systems with decentralized solutions. However, this comparison is wrong since the two forms of security solutions serve different purposes – and Web3 projects can still profit from traditional security frameworks.

Security is one of the ceaselessly cited benefits of blockchain over traditional databases and financial networks. In fact, unlike data stored on regular servers, data stored on the blockchain can’t be altered, manipulated or destroyed. However, there’s plenty of confusion between two different concepts: blockchain security and blockchain-based security.

Let’s make clear the differences between these concepts, in addition to the constraints of decentralized systems. Stefan Huber, CEO of BlackFort – the primary L1 network to supply a multichain wallet with built-in antivirus – Comments:

“What most people don’t understand is that on-chain and off-chain security solutions are complementary and not alternatives. Industries like healthcare and manufacturing can definitely benefit from blockchain-powered identity management and access control, but Web3 also needs regular cybersecurity frameworks as some features are too expensive to replicate on-chain.”

Blockchain security

Blockchain security is an umbrella term for the systems, solutions and practices used to guard blockchain networks. decentralized applicationsFunds stored in smart contracts and users interacting with the blockchain from malicious attacks.

These solutions and practices can in turn be divided into two types: those based on blockchain and people not based on it. Below one can find some examples for clarification. Please note that these are examples only and never exhaustive lists.

1) Security solutions with blockchain

• Multisig wallets: Wallets that require multiple signatures to finish a transaction are used to forestall unauthorized fund transfers in Web3 projects.
• Decentralized oracles: Smart contracts often require off-chain data (like cryptocurrency prices). Using a number of decentralized oracle Prevents malicious actors from providing false details about these contracts.
• Gas fees: Surprisingly, non-zero gas fees are the most effective deterrents against a typical sort of attack – DDoS. By making such spam attacks costly, they discourage perpetrators.

2) Security solutions that will not be based on blockchain

• Web3 antivirus programs: These apps detect crypto scams, malicious smart contracts, and phishing web sites and warn users before they sign potentially harmful transactions. Some advanced wallets are sometimes available as browser extensions and now even have this feature as a built-in security measure. Stefan Huber, CEO of BlackFort Exchange Network, continues: “When a user initiates an interaction with a dApp smart contract or wallet address, the antivirus program built into our wallet scans it against a database of known scams, simulates the transaction and immediately informs the user when…”It is protected to proceed with connecting to the dApp or sending crypto to a selected address.”
• Asset custodian: These are market participants who secure digital assets for others. While custodians typically use cold multisig wallets and other blockchain-based solutions to guard their customers’ funds, the custodian-customer relationship stays traditional and involves signed documents and charges paid off-chain.
• Multi-factor authentication: Good old MFA, particularly biometric authentication, is an efficient method to protect crypto wallets.

Blockchain based security

The term “blockchain-based security” refers to security systems and tools that use blockchain as an integral a part of their technology. Such tools could be utilized in Web3, Web2 or the actual economy.

The most interesting use cases of blockchain-based security solutions include:

• Supply chains: Valuables and shipments could be assigned unique blockchain identities to make sure authenticity and track the movement of products. Perhaps probably the most significant use case for blockchain in delivery management is its ability to forestall ransomware attacks.
• Internet of Things: Blockchain is used to authenticate individual devices (e.g. sensors) and accounts before accessing an IoT network. This can prevent data breaches, phishing attacks, malware installations, and more.
• Data security: Blockchain helps secure data and regulate access to sensitive files. For example, financial and medical records are sometimes stolen and sold on the dark web. However, such breaches could be prevented if access requires the usage of a blockchain private key.

Conclusion: the all-important human factor

Blockchain-based and legacy cybersecurity solutions have to be combined to effectively protect Web3 projects and user funds. After all, Web3 platforms still run on virtual servers like AWS and user-facing wallets run on older devices.

At the identical time, we must not forget crucial element of crypto security on the end-user level: the correct practices to guard one’s crypto wallet’s secret phrase, private key and password.

Most crypto thefts occur not due to code exploits, but because wallet owners unintentionally reveal their seed phrases or private keys. Click here fake airdrop linksfall victim to SIM swap fraudetc.

Worse still, it’s common for Web3 projects to have their social media and GitHub accounts compromised, that are then used to steal money from end users. This shows that employees of blockchain projects also often don’t follow correct cybersecurity practices.

Understanding how hacks, crypto scams, phishing, and social engineering attacks work might be crucial aspect of blockchain security. Without training end users and project team members, no blockchain security solution will ever be sufficient to guard assets in Web3.