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Blockchain

Updated Jan 30, 2024 ·

Overview​

Blockchain is a distributed ledger technology that creates a secure and tamper-resistant way to record and verify transactions.

Applications in Cybersecurity​

Secure Data Storage:

  • Blockchain can be used to store sensitive information securely.
  • This leverages immutability to prevent tampering.

Identity Verification:

  • Blockchain-based identity solutions use cryptographic techniques.
  • This verify users without relying on centralized authorities.

Supply Chain Security:

  • Blockchain can enhance supply chain security.
  • It can provide an immutable record of product provenance and traceability.
  • For more information, please see Supply Chain Analysis.

Features​

Immutability​

Once data is added to a blockchain, it cannot be changed without agreement from the network.

  • Makes records tamper-resistant and ensures a reliable audit trail
  • Increases trust in data integrity and historical accuracy
  • Helps detect unauthorized changes or fraud attempts

Consensus Mechanisms​

Blockchain relies on consensus algorithms to agree on the validity of transactions, ensuring trustworthiness in a decentralized environment.

Common consensus mechanisms include:

  • Proof of Work (PoW)
  • Proof of Stake (PoS), which help

Cryptographic Security​

Blockchain relies on cryptography to ensure secure and trustworthy transactions.

  • Uses digital signatures and public-key cryptography for identity verification
  • Each block links to the previous one using a cryptographic hash
  • Creates a tamper-evident and traceable chain of records

Decentralization​

Blockchain runs without a central authority by distributing control across many nodes.

  • Reduces single points of failure
  • Each node operates independently
  • Redundant design improves resilience against failures and attacks

Public Ledger​

A public ledger records all blockchain transactions in a way that’s secure, anonymous, and transparent.

  • Allows anyone to track and verify transactions
  • Does not rely on a central authority
  • Immutable and accessible by all participants

Smart Contracts​

Smart contracts are self-executing programs on a blockchain that run automatically when conditions are met.

  • Enforce contract terms without intermediaries
  • Transparent and tamper-proof once deployed
  • Ensure predictable outcomes based on code logic

Common Use Cases​

Smart contracts automate processes across many industries.

  • Financial Transactions – Automated payments, insurance claims, or loans
  • Supply Chain Management – Tracking goods and automating logistics
  • DeFi (Decentralized Finance) – Run financial services without banks

Challenges of Smart Contracts​

Smart contracts offer benefits but also pose certain risks.

  • Bugs or logic errors can be exploited
  • Difficult to update once deployed
  • Legal recognition varies by jurisdiction

Permissioned Blockchain​

A permissioned blockchain restricts access to the network and its operations to approved participants.

  • Only trusted users can access or validate data
  • Rules and roles are managed by designated entities
  • Faster and more scalable due to controlled participation

Unlike public blockchains, where anyone can join, permissioned blockchains require users to be granted specific roles or permissions.

Applications of Permissioned Blockchain​

Often used in business settings for privacy and control.

  • Enterprise Use – Handles sensitive data securely within organizations
  • Consortia – Collaboration between trusted groups with shared governance
  • Private Transactions – Supports confidential business operations

Challenges of Permissioned Blockchain​

While secure, permissioned blockchains have trade-offs.

  • More Centralized Control – Reduces decentralization, increasing reliance on few parties
  • Lower Transparency – Not open to public auditing or participation
  • Limited Resilience – Less robust against tampering compared to public networks

Security Considerations​

Fifty-one Percent Attack​

Occurs when an attacker controls the majority of a blockchain network’s power.

  • Gains over 50% of mining or validation power
  • Can alter transactions, double-spend, or block new ones

Smart Contract Vulnerabilities​

Smart contracts are automated code on blockchains, but flaws in their design can be exploited.

  • Bugs in code may lead to loss of funds
  • Poor input validation can trigger unintended actions
  • Exploits can’t be reversed once executed on-chain

Privacy Risks​

Blockchain data is often public, which can expose user activity.

  • Transactions are traceable even without names
  • Patterns can reveal identities or sensitive behavior
  • Raises concerns in financial and healthcare use cases

Key Management​

Users must protect private keys to keep blockchain assets secure.

  • Losing a private key means losing access to assets
  • Stolen keys allow full control of the associated funds
  • Secure storage and backups are critical