What Is Blockchain Security?

Written by: University of Tulsa • Jul 22, 2024

Blockchain security professional looking at data.

What Is Blockchain Security?

In 2023, online criminals stole at least $24 billion in cryptocurrencies (bitcoin, ethereum, etc.). This data comes from Chainalysis , which compiles data on blockchain, the foundational technology behind digital currencies.

The data underlines the challenges of blockchain security. Even though blockchains are designed to keep records safer than many other kinds of databases, they can still be vulnerable to cybercriminals.

Given that $1.6 trillion in digital assets were on blockchains at the end of 2023, as reported by Digital Asset Research, understanding how to protect blockchains is more important than ever. A degree program in cybersecurity can prepare a professional for steadily expanding career opportunities in the field of blockchain security.

Basics of Blockchain Security

Blockchain security is a relatively new subfield of cybersecurity, itself part of the larger field of information security . The first blockchain, for the cryptocurrency Bitcoin, was launched in 2009.

A blockchain is a specialized form of database that stores the same data in multiple places. Because it’s distributed to several locations, it’s also called a distributed ledger. Its unique nature carries both inherent strengths and vulnerabilities.

Inherent Security Strengths

The design of blockchains includes several features that help make data more secure.

Cryptography: Data is encrypted, making it difficult for hackers to decode without cryptographic keys.
Decentralization: Multiple users store the same blockchain, making it impossible to alter data in just one location.
Consensus: The group of users who store the blockchain also independently validate and agree upon each block of data added to it.
Immutability: Once a block of data has been added, it can’t be changed.
Transparency: Every block of the chain is visible to all users.

Vulnerabilities in Blockchain Security

A blockchain’s unique security features can also carry unique vulnerabilities. Rather than trying to hack into a blockchain itself, the most common kinds of attacks target its users or data outside the blockchain.

Phishing

A phisher tries to trick a user into revealing their passwords or the cryptographic key they use to transfer money. A user receives an email that appears to come from a genuine source. However, its links lead to phony websites, which ask the user to enter their credentials.

Routing and Bridge Attacks

In a routing attack, hackers siphon off data while it’s being sent over the internet, for example, from the blockchain to a user.

Bridge attacks do the same when data is being transferred between blockchains, as when money is converted from one kind of cryptocurrency to another. A 2022 bridge attack on the Binance exchange resulted in the theft of $570 million worth of tokens.

Sibyl and 51% Attacks

Smaller blockchains can be crashed or taken over by criminals who open multiple accounts.

In a Sibyl attack — named after a well-known case of multiple personality disorder — cybercriminals flood a network with fake accounts.
In a 51% attack, a group accumulates 51% of the power to validate transactions, allowing it to override other users and alter information.

Elements of a Blockchain Security Plan

Similar to other kinds of cybersecurity, a blockchain security plan provides in-depth defense. Each element employs multiple layers to protect a chain and its users from bad actors.

Identity and Access Management

A plan manages who has access to a blockchain and ensures that they identify themselves properly. Key components include the following:

Multifactor authentication (MFA) requires not only a password but also a one-time code sent to a remote device.
Encryption prevents hackers from decoding data being sent to and from the blockchain.
Role-based access limits each user to certain kinds of actions.

Governance and Risk Management

Securing a blockchain includes analyzing its risks and creating policies to manage them, such as:

Assessing what an organization stands to lose if a blockchain is breached, both financially and operationally
Creating a disaster recovery plan for worst-case scenarios
Using software tools on a regular basis to test a network for weaknesses
Tracking laws and regulations on cybersecurity and data privacy
Keeping users up to date on potential threats and practices to avoid them

Careers in Blockchain Security

Blockchain security falls under the job description of an information security analyst, according to the U.S. Bureau of Labor Statistics (BLS). The BLS projects jobs will grow by 32% from 2022 to 2032, compared with 3% for all occupations. The field has various requirements and rewards.

Duties

Common duties can include the following:

Developing blockchain security plans, standards, and best practices
Keeping current on technologies, tools, and threats
Ongoing testing of systems for vulnerabilities
Training and helping users with security procedures
Reporting on security statistics and attempted attacks

Education

Blockchain security positions generally require at least a bachelor’s degree in fields such as cybersecurity, computer science, or information technology (IT).

Salary

As of April 2024, information security analysts earned an average of $120,360 a year, according to the BLS. That figure compares to $104,420 for all computer occupations and $48,060 for all jobs.

Explore the Career Possibilities of a Cybersecurity Degree

With the explosive growth of online data storage, including blockchains, cybersecurity career growth is outpacing that for most other occupations. A degree program such as the online Master of Science (M.S.) in Cyber Security at The University of Tulsa can equip students with knowledge of threats, technologies, and strategies to protect organizations, investors, and users from cybercriminals.

Because the program is online, students can participate from any location, and because it’s accelerated, students can complete it in as little as 20 months, even while working full time. Learn more about how such a program can prepare you for a rewarding career in the cutting-edge field of cybersecurity.

Recommended Readings

The Importance of Supply Chain Cybersecurity

Skills Needed for Cybersecurity

Why Is Cybersecurity Important?

Sources:

Blockchain.com, Unique Addresses Used

Chainalysis, The Importance of Blockchain Security

Chainalysis, 2024 Crypto Crime Trends: Illicit Activity Down as Scamming and Stolen Funds Fall, But Ransomware and Darknet Markets See Growth

CNBC, “$570 Million Worth of Binance’s BNB Token Stolen in Another Major Crypto Hack”

Digital Asset Research, Digital Asset Data: 2023 Recap and 2024 Trends

IBM, What Is Blockchain Security?

Kaspersky, What Is Blockchain Security?