11 June 2020

 

Cybersecurity Issues Within the Crypto Industry

The topic of cybersecurity is a big issue within the crypto community. We have seen many exchanges getting hacked and millions of users losing their Crypto. We have seen some 51% attacks leading to losses and double-spent tokens. We have even seen some other easier to explain examples such as someone forgetting their 12-word seed phrases. Truth is, there is a significant problem in Crypto revolving around security.

It’s a recent technology, and it’s quite complex – we cannot ignore the problems it can bring.

These computer security problems do not only occur in the blockchain. They occur much more easily in other industries. These security problems have led 48% of users to stop using any service that has had a data breach. Basically put, consumer trust – or lack of it – is a make-or-break for companies. Lack of confidentiality, privacy, or password control are some of the biggest security problems on different platforms.

These problems are human errors in programming – and criminals like to exploit and take advantage of this.

How Blockchain Solves Cybersecurity Problems

You might already see how the blockchain can help here. The blockchain could provide proof of authorship and authentication of origin. With this, you can configure that unregistered IPs cannot create or alter the registry. This will improve the proof of authentic usage for commerce between different companies.

This gives access to the exclusive distribution networks only to those who are authorized. This will likely be done through the use of Smart Contracts.

The blockchain could also bring some clarity to the issue of copyright. Every time someone uses an item registered in the blockchain, that will be registered. This entry will have detailed information on the date, time, and who used it. This can improve the management of intellectual property in the web 3.0.

In fact, there are already different proposals working with blockchain for computer security. One of these is Remme. Remme is a public key infrastructure proposal for the web 3.0.

Remme is a decentralized open-source system. It aims to create a new security standard based on the blockchain. The way they plan to do this is by replacing users with SSL certificates. Being decentralized, it would create individual IDs to manage the digital keys of each user. This would connect information between apps, browsers, and servers. They plan to give incentives to trusted members and sanction dodgy accounts.

Similar is the case for Cambridge Blockchain. CB have developed an identity management software for financial institutions in the blockchain. They provide an identity and compliance framework for financial institutions. Then, it connects the identity owner to service providers and trusted parties only. This ultimately gives control of identity data to the end-user. So impressive is this approach that PayPal decided to invest in it in 2019.

All in all, being such a new technology plays against the blockchain. There are still many unresolved issues around it. Yet, the potential for it to solve existing problems is bigger than the potential risk involved. Solving our cybersecurity issues with the blockchain might be one of the groundbreaking events of our times. When the risk-reward ratio is so well defined, there is only one thing to do: take the chance.

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Edmund McCormack
Tech industry veteran and blockchain technology investor. Simplifying cryptocurrency for almost a decade.

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