IRJET- An Overview of the Security of Blockchain

International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056
Volume: 06 Issue: 02 | Feb 2019 www.irjet.net p-ISSN: 2395-0072
© 2019, IRJET | Impact Factor value: 7.211 | ISO 9001:2008 Certified Journal | Page 153
An Overview of the Security of Blockchain
Sree Preetha .K.R1, Jaswanth .R2, Dhanush Kumar .K3, Keshore .S.M4
1Professor, Dept. of Computer Science Engineering, KPRIET, Tamil Nadu, India
2,3,4Student, Dept. of Computer Science Engineering, KPRIET, Tamil Nadu, India
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Abstract - The Blockchain is one of the most developing
internet technologies in recent years through its
introduction by Bitcoin and, it is also the most sought-after
technology cause of the integrity, anonymity and security, it
provides to the things that have value. Blockchain
technology redefines how data are stored and distributed
securely with cryptography and consensus mechanism in a
distributed manner. Thus eliminating the need for having
trust in a central authority. The data is made tamper-proof,
secured by using an asymmetric encryption algorithm,
hashing, and consensus algorithm. Because of this property,
it is implemented in various domains such as medical,
financial, supply chain management, etc. As the Block chain
evolves the security of the Block chain must be evaluated
comprehensively. This paper, discusses an overview of the
Blockchain, its security drawbacks and, how these
drawbacks are exploited.
Key Words: Blockchain Security, Privacy, Data Privacy,
Blockchain, IPFS.
I. Introduction
The Blockchain is still an emerging technology
and people are still trying to grasp the full potential of it in
various fields. Blockchain was first developed as an
underlying framework for bitcoin when Satoshi Nakamoto
released bitcoin white paper in 2008[5]. Since then bitcoin
attracted many private financial institutions and
organizations due to the anonymity and security it offers.
The level of security and anonymity the bitcoin offers is
possible only by its underlying framework Blockchain [4].
At its core, Blockchain is a digital decentralized ledger of
financial transactions which is incorruptible. Blockchain
was further developed with the introduction of Smart
contracts in Ethereum Blockchain by VitalikButerin.
Ethereum Blockchain can be programmed to store not
only financial transactions but anything data of value [10].
As Blockchain continues to evolve in various domains, it is
must to evaluate the security comprehensively.
II. Blockchain technology overview
The blockchain is not a single system but a
combination of various technologies such as distributed
technology, peer to peer communication, and
cryptography working together. This section covers
important components of Blockchain.
(i) Node and the Network
A node is a device on a blockchain network, that
is, in essence, the foundation of the technology [5]. Nodes
are distributed across a wide network and carry out a
variety of tasks. A node can be an active electronic device,
including a computer, phone as long as it is connected to
the Blockchain. Nodes are the individual parts of the larger
data structure that is a blockchain. The Blockchain
network is a decentralized peer to peer network which
consists of nodes. There are two types of node presented
in the network [10] namely, Full node and Light node.
Full Node fully enforces the rules of Blockchain
and has a copy of all the historical data of the Blockchain
in it.
Light Node references trusted full node’s copy of
the Blockchain.
(ii) Ledger
Ledger is a database structure where data are
stored securely. The ledger database is spread across
several nodes (devices) on a peer-to-peer network, where
each replicates and saves an identical copy of the ledger
and updates itself independently [5], [10]. The primary
advantage is there is no need for central authority. Once
the information is stored, it becomes an immutable
database, which the rules of the network govern. While
centralized ledgers are prone to cyber-attack, distributed
ledgers are inherently harder to attack because all the
distributed copies need to be attacked simultaneously for
an attack to be successful. Further, these records are
resistant to malicious changes by a single party.
(iii) Consensus Protocol
These protocols create an irrefutable system of
agreement between various devices across a distributed
network, whilst preventing exploitation of the system.
Blockchain consensus protocols keep all the nodes on a
network synchronized with each other [6]. Consensus
rules are a specific set of rules that nodes on the network
will ensure a block follows when validating that block and
the transactions within it. The key requirement to achieve
a consensus is a unanimous acceptance between nodes on
the network for a single data value, even in the event of
some of the nodes failing or being unreliable. Consensus
protocols also provide participants on the network who

are maintaining a blockchain with rewards and incentives
to continue doing so. These rewards come in the form of
crypto currencies or tokens, which can be extremely
lucrative, so much so that competition to confirm the next
block in a chain is extremely fierce. Some of the most used
consensus protocols are, proof of work and proof of stake.
1. Proof of work
Proof of work consensus protocol was devised by
Satoshi Nakamoto in the Bitcoin white paper and is now
widely used in many other cryptocurrencies. This process
is known as mining and as such the nodes on the network
are known as “miners”. The “proof of work” comes in the
form of an answer to a mathematical problem, one that
requires considerable work to arrive at, but is easily
verified to be correct once the answer has been reached
[6]. The answer is in the form of a target hash that miners
must produce with the current block for it to be confirmed
into the blockchain and, the miners must perform a trial
and error basis to get to the target hash. Technically, the
target hash can be found at first attempt but it is highly
unlikely.
This process involves rewarding cryptocurrencies
for the miners who get the target hash and, this reward
acts as an incentive for the miners to produce the target
hash as the process involves wasting lots of computing
power and electricity.
2. Proof of Stake
In proof of stake system, the creator of the next
block is determined by a randomized system that is, in
part, dictated by how much of that cryptocurrency a user
is holding or, in some cases, how long they have been
holding that particular currency [11]. Instead of
computational power, as is the case in proof of work, the
probability of creating a block and receiving the associated
rewards is proportional to a user’s holding of the
underlining token or cryptocurrency on the network [3].
The randomization in proof of stake system prevents
centralization, otherwise the richest individual in the
system would always be creating the next block and
consistently increasing their wealth and as a result their
control of the system.
The main advantage of this system than proof of
work is it doesn’t waste much energy in confirming the
block so it is cost effective. It is superior to proof of work
system as it uses less electricity to run.
Delegated proof of stake (DPOS). Similar to
POS[3], miners get their priority to generate the blocks
according to their stake.
III. Security Risks in Blockchain
In the wake of Bitcoin’s rise, blockchain is being
adopted in many other industries, to securely deliver data
in a series of encrypted transmissions that are extremely
difficult to trace. But, Blockchain technology is not
completely secured as there are some exploits and risks
present in the Blockchain are explained in the below
section.
(i) 51% Vulnerability
The consensus mechanism Proof Of Work has a
big vulnerability in it that can be exploited, if a single
miner or group of miner gets hold of more than 50% of
computing power in the Blockchain then the miner has
control over the Blockchain [8]. When a miner forms a
valid block of transactions, the individual will normally
broadcast the block to the rest of the miners on the
network, so that other miners can verify its validity, which
allows for consensus as to the shared state of the
blockchain to be reached. However, a bad actor with more
than 50% of a network’s computing power could begin
mining privately. The transactions included in these
privately mined blocks are not broadcasted to the rest of
the network. This results in a scenario in which the public
version of the blockchain is being followed by the rest of
the network, but the bad actor is working on his own
version of the blockchain and not broadcasting it to the
rest of the network.
When a malicious miner gets hold of more than
50% computing power of the Blockchain than the miner
can do the following attacks,
i. Initiate double spending attacks [8].
ii. Change or modify the order of transactions.
iii. Restrict normal mining operations of other
miners.
iv. Obstruct the confirmation of other transactions
and blocks
The 51% attack would be in vain for the attackers
as it would require significant expenditure and little
financial returns. The attacker should spend more
computing resource than half of the entire blockchain
network and the result the miner will get from performing
the attack will be unprofitable when compared to the
resource the miner spent. The 51% vulnerability is not
present in the Proof of Stake consensus protocol so it is
much secured than Proof of Work protocol and some
major blockchain system are currently in the transition of
their consensus protocol from Proof of Work to Proof of
Stake.

(ii) Private Key Security
Blockchain uses public/private key cryptography
to generate the signature for a transaction and verification
[1]. The private key is also used to managing assets in the
wallet by the node participating in the network. Managing
public/private key in the blockchain in a very important
security measure but by default blockchain doesn’t
provide any security protocol to manage the keys so it is
user’s responsibility to secure it.
Once the user’s private key is lost, it will not be
able to be recovered. If the private key is stolen by
criminals, the user’s blockchain account will face the risk
of being tampered by others. Since the blockchain is not
dependent on any centralized third-party trusted
institutions, if the user’s private key is stolen, it is diﬃcult
to track the criminal’s behaviors and recover the modiﬁed
blockchain information.
Key generation method selection is also
important. Depending on the blockchain, the hash and
cryptographic key generation may vary. If unsafe or easy
to crack methods are used to create a key in particular
Blockchain implementation, the private keys of nodes
could be possibly stolen.
Due to decentralized, distributed, and definite
nature of the Blockchain, the rule of the Blockchain says
that the transaction that has occurred and has been
already approved cannot be deleted from the Blockchain
forever (whatever happened, happened). Additionally,
there is no Certification Authority (CA) or any other
"golden source of information" present in the Blockchain
system (note, this is applicable mostly for the public
Blockchains). As a result, the end user has no reliable
means to properly verify the credibility of other user's
public key.
(iii) Untested Code
The blockchain is fresh and extremely fast
developing the technology. Most of its code is actually
open source and anyone in the world can contribute into
the development of a number of major projects such as
Bitcoin, Litecoin, etc[2]. As the blockchain technology is
growing rapidly there may be still vulnerabilities left in
the code even though many engineers must have tested it.
(iv) Scalability issues
As the blockchain continues to grow, it requires
all the data to be stored in every node to secure it. It
possesses a huge threat to the scalability of the
technology. The growth of the blockchain ledger will
become unmanageable for most of the users to participate
in the network [2]. Also while Visa and MasterCard can
verify thousands of transactions in a second, blockchain
can only do a few. So these issues present a huge threat to
the blockchain.
(v) Front end issues
The blockchain is just a backend technology and a
front end user interface must be provided for the user to
interact with it [2]. If the front-end used to interact with
the Blockchain is faulty and its design lacks basic security
countermeasures, the whole system could be
compromised. In fact, so far nearly all documented
incidents and successful attacks on the Blockchain
technology where related solely to the faulty
implementations of the frontend solutions.
IV. Security attacks on Blockchain
Blockchain brings major security enhancements
with it when compared to traditional centralized systems.
But Blockchains are maintained over a peer to peer to
network and there are different attacks possible in it,
likeDdoS, Sybil attack, routing an eclipse attack.
(i) Denial of service attack
The DDoS attack is a common attack to disrupt
normal traffic of a targeted server, service or network by
overwhelming the target or its surrounding infrastructure
with a flood of Internet traffic[6]. DDoS attacks achieve
effectiveness by utilizing multiple compromised computer
systems as sources of attack traffic.
Though Blockchain network is comparatively
safer against the DDoS attack than a centralized network,
it is still susceptible to it. In Blockchain the DDoS attack
boils down into overloading the nodes in the Blockchain
with packets consisting of valid transactions or junk
packets. The nodes will get stuck processing these
transactions and the network will be impacted. There are
ways to limit the probability of success of DoS attacks but
we cannot completely eliminate it.
(ii) Sybil Attack
One of the biggest issues when connecting to a
peer-to-peer network is Sybil attacks [6]. A Sybil attack is
one where the attacker pretends to be so many people at
the same time. In Sybil attack, there is a malicious node
that has been able to create so many identities in the
network. Within the network, this malicious node looks
like it is a large group of nodes representing a large
percentage of the network. The other honest nodes that
wish to connect to the network may not be able to detect
such behavior and may accept shared information from
this malicious node thinking the data is arriving from so
many different sources.

Countermeasures such as Proof-of-Work (PoW)
have been utilized by many cryptocurrencies to protect
against Sybil attacks during mining. PoW requires each
node that wishes to participate in the mining process to
compete in an expensive crypto-puzzle. Now, creating
multiple identities is still possible, but, providing the
computational power to solve this puzzle then becomes
the issue. So it doesn’t completely eliminate the Sybil
attack.
(iii) Eclipse Attack
Eclipse attacks are a type of network attack that
aims at eclipsing certain nodes from the entire peer-to-
peer network [6]. This simply means, monopolizing a
node’s connections so that it doesn’t receive information
from any nodes other than the attacking nodes. In contrast
to Sybil attacks, Eclipse attacks are mainly focused on
attacking single nodes rather the entire network at once.
An attacking node could easily perform a double
spending attack in such a setting. This can easily be done
by sending the victim node a transaction showing proof of
payment, eclipsing it from the network, then finally
sending another transaction to the entire network
spending the same tokens again [12]. Given the fact that
the victim node is isolated and only receives data from the
malicious nodes, it will continue to believe the incorrect
state of the blockchain.
The blockchain is resistant to Sybil attacks
because of its proof of work concept[6] though in a worst-
case scenario is when an honest node is being massively
Sybil attacked but still has a single connection with an
honest node that is connected to the true Bitcoin network.
As long as a single honest node is passing the true data to
the full node which is being attacked, it will ignore all the
attempts from the Sybil attacker’s nodes.
(iv) Routing Attacks
Routing attacks rely on intercepting messages
propagating through the network and tampering with
them before pushing them to their peers [6]. The only way
for nodes to detect such tampering is when they receive a
different copy of it from another node.Routing attacks are
divided into two separate smaller attacks.
(i)Partitioning attack [12] where the attacker tries to split
the network into two or more disjoint groups. This can be
done by hijacking certain points within the network that
act as the linking point between two groups.
(ii)Delay attack [12]: The attacker picks up the
propagating messages, tampers with them and finally
pushes them to the side of the network that has not seen it
before.
There are valid methods to limit these attacks
from occurring [13]. For example, by continuously
diversifying the network connections, it will make an
attacker’s life much harder to find points to hijack and
split the network into two or more disjoint groups.
Another method is to monitor the network parameters
such as Round-Trip Time (RTT) and recognize irregular
patterns. Once detected, the nodes can simply disconnect
themselves and try to connect to other random nodes.
V. Conclusion
The peer to peer system in which the blockchain
works will never be secure but it definitely provides
enhanced security over centralized systems. Without a
doubt, there is a number of security threats applicable to
the Blockchain. These threats must be noticed and
remembered. Yet, most of them are already being resolved
by the protocol design and software development side. For
sure a standardized approach for the Blockchain security
is needed and baseline framework and standards should
be created by recognized organizations
References
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