Is Blockchain Really Secure?

Lately, we have been hearing more and more about scandals related to hacks and information leaks. Blockchain seems completely safe, but is it really? We tell you about the ten most common attacks on distributed databases.

No Technology is 100% Secure

No technology can be 100% secure, and blockchain is no exception. Attacks on distributed databases differ in the way they are hacked: the goal is the consensus mechanism, which allows changing the information that is entered into the registry.


Miners have the unique right to confirm legitimate transactions within the network, and each of their shares is determined by the hash rate – the computing power of the blockchain. The more “power,” the easier it is to carry out one of the following types of attacks.

1. Attack 51%

The most common threat to the blockchain network. The attack is named after a business control analogy The problem is in the Proof-of-Work protocol, which is used by projects such as Bitcoin, Litecoin, Monero, and others.


Real-Life Examples

  1. In August 2016, the Ethereum, Krypton, and Shift blockchains were subjected to a 51% attack.
  2. In 2014, the Ghash.io mining pool exceeded 51% of its own computing power in Bitcoin.

2. Eclipse Attack

Also known as an eclipse attack, this is a special type of cyberattack where a hacker creates an artificial area around a single node to control its actions. The attacker redirects outgoing and incoming data from the target node to their own, separating the deceived user from the real network.


Consequences

  1. Double-spend attacks
  2. Miner power failure

3. Vector76 Attack

This attack, also known as a "single confirmation attack," combines a race attack and a Finney attack.

Conditions for Success

  1. Electronic wallet for withdrawal of funds with one network confirmation
  2. Direct incoming connections to the node from the wallet provider
  3. The victim node must have a fixed IP address

4. Sibyl Attack

The most popular type of attack on peer-to-peer networks. Named after a famous case of dissociative identity disorder, a node in the blockchain acquires several entities.

Impact

  1. Network disabling
  2. Double spending
  3. Tracking transactions

5. Finney's Attack

Named after Hal Finney, this attack exploits unconfirmed transactions on the network.

Attack Process

  1. A miner generates a block with a transaction from address A to address B (both belonging to them).
  2. The miner makes another payment from A to C (belonging to another user).
  3. If the second transaction is accepted without confirmations, the attacker can release the block with the first transaction, making the second one invalid.

6. Routing Attack

This attack exploits vulnerabilities in third-party software introduced into the client-provider connection.

7. Race Attack


Another type of double spending where sellers release goods before transactions are confirmed.

Prevention

  1. Do not accept incoming connections to the node.
  2. Wait for multiple confirmations before finalizing transactions.

8. Attacks on Cryptographic Functions

Hackers often exploit human errors and vulnerabilities in the code.

Example

In the Ethereum network, a fraudster exploited a vulnerability and stole $50 million in project coins, leading to a split in the community.

9. Overflowing the Transaction Queue

A stress test attack where thousands of transactions are sent for processing, overwhelming the blockchain.

Real-Life Cases

  1. Coinwallet.eu’s stress test in 2015
  2. F2Pool's similar test with 80,000 transactions

10. Denial of Service (DDoS Attack)



These attacks flood the network with identical requests, causing service disruptions.

Blockchain Protection Mechanisms

  1. Block size and script limitations
  2. Signature verification constraints
  3. Non-standard transaction registration


Conclusion

Our list includes only the most common attacks on blockchain systems – their diversity is astounding. Some attacks are financially motivated, while others aim to expose digital vulnerabilities. Developers continuously implement security measures, upgrade software, and monitor potential threats. If you want to invest in cryptocurrency or build blockchain solutions, consider the risks. Good luck.