I was having a chat with a friend of mine when the issue of how secure blockchain really was came up. Basically the question was:
Short answer: Yes.
Long answer: Yes, but it’s complicated.
While the concept itself is pretty resilient to hacking, blockchain, like all other software suffers from being imperfect software written by imperfect programmers.
The number of times where cryptocurrencies have been stolen and blockchain exchanges have been “hacked” is a testament to that.
However, most of these were not because the blockchain itself was insecure, rather the implementation of supporting software. The attacks used the normal hacks we all know and love. Phishing, insecure credentials etc.
There will always be bugs and exploits in software that will allow hacking. But what if the software was perfect and people were not easy to phish:
Short answer: Yes.
Long answer: Yes, but it’s not likely.
Theoretically, there are several attacks that can hack a blockchain network.
The first and most well known is the 51% attack, where an attacker gains enough processing power to overcome the network and falsify records in their favor.
Another way is to break into the ISP of one or more of the network nodes, separate them from the rest of the network, run a tonne of fraudulent transactions and reconnect.
If all goes well the fraudulent transactions will be longer and hence accepted.
You could also flood the network with fraudulent transactions and cause a DDoS attack.
In theory, all of the above is possible. In practice it gets complicated.
Let’s look at the first one:
How could an attacker gain 51% of a network? Off the top of my head either;
Companies are least likely to go this route. There are easier and less risky ways to make money when you have that kind of resources. In fact, it’s actually easier to just mine the cryptocurrency yourself rather than go rouge in my opinion. But then again I don’t have that kind of resources so it might be worth it.
Governments, on the other hand, are likely to do it, especially in a future where contracts and other sensitive records are on blockchain. I can clearly see countries using this as the next form of warfare.
While viruses may have gone the way of the dodo, malware is still a problem. It is conceivable that a hacker could infect enough computers/smartphones/smart toasters and then use all that power to overcome a network.
Would they though?
Probably, hackers have been known to do the weirdest things for the lolz.
If you had a super AI or a super Quantum computer or a super AI on a super Quantum computer that could take over a blockchain network, would you do it?
This scenario is the most fun to think about, but in my opinion, is unlikely.
While AI/Quantum computer could do it, it’s more likely that the first ones capable will cost an arm and a leg, therefore the people with enough resources to get them early would have better things to do with them.
By the time the price goes down enough for the bad guys to get them, the good guys would also have them, preserving the status quo.
So, in summary, can blockchain be hacked, yes.
Is it likely, in my opinion, no.
That’s my two cents on the subject.
If you found it interesting why not follow me on twitter @phoexer or share this article. If you have your own views on the topic you can let me know, I’m very interested to hear what everyone thinks.
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