Blockchain technologies have the potential to greatly enhance security, but recent events have shown that it is not infallible. According to Chainalysis, cryptocurrency-related crimes resulted in $20.6 billion in illicit transactions in 2022. This raises the question of whether blockchain is truly secure by design, or if security must be actively designed and implemented into its use cases.
Blockchain technology differs in permissions, sizes, roles, transparency, types of participants, and how transactions are processed. However, decentralization, which eliminates the single point of failure, is common to all blockchain configurations. Cryptography, public and private keys, software-mediated consensus, contracts, and identity controls are also built-in security qualities that verify access, authenticate transaction records, prove traceability, and maintain privacy. These configurations enhance blockchain’s position in confidentiality, integrity, and availability triad by offering improved resilience, transparency, and encryption.
Despite these attributes, blockchains are only secure by design in theory. In practice, they must always be designed and implemented for security. Blockchain technologies offer several design configurations and applications that can enhance security, but they are created and managed by humans, which means they are subject to human error, bias, and malicious attacks. Therefore, security leaders need to work with product and platform builders to identify problems, interactions, and tradeoffs and actively design, test, implement, and manage them.
Six categories for blockchain use cases in security and privacy are available to explore the potential for improved security technology. Resilience and availability provide support against attacks, corruption, and downtime. These decentralized infrastructures mitigate vulnerabilities by distributing information, communications technology networks reducing data exposure and redirecting users when a centralized database is attacked. DNS decentralization benefits redundancy in the event of a DDoS attack. In the IoT context, distributing operations and administrative controls away from a central hub enables security decisions to be made closer to the periphery of the network.
Data on blockchains must not be altered, and consensus verifies transactions. Decentralized voting, health and scientific data collaboration across institutions, and decentralized metadata are emerging blockchain use cases where security is paramount. Transparency and traceability are core to blockchain designs, with security benefits manifesting differently in various applications. In a supply chain context, a tamper-proof digital distributed ledger stores records of transactions and freight data across parties and the product lifecycle, reducing the risks of counterfeiting and tampering. Authentication of software and device interactions is critical to prevent IoT device compromise, and blockchain hashing can help update, download, and patch verification with the product’s developer, thus preventing supply chain attacks.
Blockchain technology’s cryptographic keys authenticate identity attributes and credentials, preventing identity theft. Multisignature access controls and decentralized administration prevent error, takeover, or fraud. Companies can use blockchain’s encryption and hashing capabilities to secure data shared in messaging, chat, and social media apps. Digital ledgers have the ability to prove ownership validation, which has numerous security benefits across many blockchain use cases. Non-fungible tokens (NFTs) enable creators to watermark media, while cryptographic keys create immutable records of authenticity and ownership.
Blockchain applications already power projects that rely on security, controlled access, accountability, transparency, and efficiency. It is essential to understand the benefits and risks of blockchain’s general design before implementing these use cases and using them to foster trust in the digital world. Blockchain technology is rapidly developing and must be designed and managed with security in mind.