Blockchain Exploitable Loopholes That Are Not Perceivable

In recent years blockchain technology has seen sweeping adoptions. Apart from the initial conversion into cryptocurrencies today, healthcare, real estate, and smart contracts are some other areas.

However, like most emerging technologies, it has its vulnerabilities. Reports reveal that while blockchain technology creates a tamper-proof ledger of transactions, blockchain networks are not invulnerable to cyberattacks and fraudulence.

Moreover, those with surly objectives can exploit known vulnerabilities in blockchain infrastructure and have prevailed in various hacks and frauds over the years.

This guide will help you identify unperceived vulnerabilities and improve your understanding of what it means to you.

Some Blockchain Vulnerabilities

1. Routing Attacks

Blockchain technology employs a concentrated network to function. The ISPs bind and share route information via the BGP (Border Gateway Protocol). This protocol is old and has some susceptibilities that an assailant can exploit.

For instance, an assailant manipulating an ISP can disclose a false route and thereby negate transactions for some nodes or even partition the blockchain network in half!

Presumably, as used above, Elon’s node is placed at 100.0.0.0/16 (/16 is the IP prefix). Now, if an assailant reproduces a route to 100.0.0.0/17 via the BGP, promptly this data will be edited in all the routers, As a result, the data meant for Elon will be deflected to the passage stipulated by the assailant.

This is because when BGP is submitted with two incompatible routes (100.0.0.0/16 by Elon vs 100.0.0.0/17 by the attacker), it chooses the one with a higher prefix. Hence the word Exploited

2. Private Keys Security Attacks

public-key cryptography is at the essence of blockchain technology. Consequently, improper undertaking or handling of public-key cryptography can stimulate some serious blockchain security cases.

If the key signing is carelessly implemented in your blockchain (for instance using the same key for many signings instead of a Merkle tree), it can allow an assailant to procure your private key from the public key. controlling your private key implies owning all the data linked with you in a blockchain.

Simply put, In cryptocurrencies, it means possessing all your coins. Although, the possibilities of this occurrence are very less unless you use buggy code for your blockchain.

Therefore, The major subject is the improper handling of private keys. For instance, storing private keys in infected computers, and public pastes, are go flags for exploitation. In 2020 around $300k worth of cryptocurrency was hacked because the user left the public key in Evernote.

3. Vulnerable Smart Contacts

Smart contracts are essentially agreements inscribed in code that use blockchain for record-keeping.

For instance, if you loan a person some money, you get intermittent interest until the borrowing duration is over after which you get back your central amount.

Now though, in cryptocurrency, the good thing is that you need no intermediary like a bank. Once the contract is in place there are no compromises to change it.

However, periodically, all these contacts are poorly coded. This allows an assailant to find conceivable weaknesses in the code and take advantage of them. An instance is seen in the case of DAO when an attacker was able to find such a flaw and steal $50 million worth of cryptocurrency.

4. Timejacking

Timejacking exploits a suppositional vulnerability in the Bitcoin timestamp approach. During a time-jacking onslaught, a threat actor rewrites the network time counter of the node and impels the node to approve an alternative blockchain.

They may complete this attack when a malicious user augments multiple fake peers to the network with erroneous timestamps

Consequently, one way to avoid time-jacking attacks is by prohibiting acceptance time ranges or using the node’s system time.

5. Long-Range Attack

A long-range attack is an attack procedure where the assailant goes back to the genesis block and forks the blockchain. The new branch is occupied with a partially, or even completely, distinct history from the main chain. The attack is successful when the framed branch becomes lengthier than the main chain, hence it overtakes it.

Long-Range attacks fall into three different categories, namely Simple, Posterior Corruption, and Stake Bleeding. We may associate Long-Range assaults in PoS protocols with selfish mining attacks of PoW protocols as the assailant in both circumstances is augmenting the secret blocks.

However, selfish mining attacks cannot go back to the genesis block of PoW protocols as it prohibits the required computational effort, hampering the result. Nevertheless, both attacks fork the main chain and try to append forged blocks where the assailant essentially includes different transactions.

6. Vector76 Attack

Vector76 is a mix of Race attack and Finney attack. In this case, a malicious miner establishes two nodes, he links one to the exchange node, and the other to a well-connected peer in the blockchain network. After that, the miner generates two transactions, one high-value, and one low-value.

Consequently, the assailant premises and withholds a block with a high-value trade from an exchange service. After a block acknowledgment, the attacker promptly sends the pre-mined block directly to the exchange service.

Moreover, the assailant along with some miners will deem the pre-mined block as the main chain and confirm this transaction. Thus, this attack capitalizes on the fact that one part of the network sees the transaction the assailant has incorporated into a block while the other part of the network doesn’t see this transaction.

Notably, After the exchange service ascertains the high-value transaction, the assailant sends a low-value transaction to the main network, which ultimately rejects the high-value transaction.

As a result, the network credits the assailant’s account with the amount of the high-value transaction. However there’s a high odds for success with this type of attack, but it’s not common because it obliges a hosted e-wallet that approves the payment after one authorization and a node with an incoming transaction.

Conclusion

Many may conclude that blockchain is indeed a very revolutionary technology that has incorporated the whole exercise of consensus-building with the rigor of code. A blockchain is as secure as its underlying code. 

Therefore, blockchain security is a concern for both users and code creators. Regular in-depth security audits and pen-testing will prevent your blockchain from going defunct in the future and ultimately protect users data.