Blockchain All the Rage But Comes With Numerous Risks

If you haven't jumped into the blockchain frenzy, chances are you at least know about it. The Internet is flooded with talk about the up-and-coming technology, though little of it mentions security.

But, as with all new technology, security risks can be found beneath the hype. Indeed, threat actors are finding new targets amid the rise of blockchain as they serve up social-engineering attacks, malware, and exploits to businesses and consumers, according to a recently published report by McAfee's Advanced Threat Research Team.

"It's the Wild West," says Raj Samani, chief scientist at McAfee. "You're talking about an industry that's basically worth hundreds of millions of dollars being run by organizations that are, quite frankly, small businesses."

Cryptocurrency is the first and most prominent implementation for blockchain, which was first used for bitcoin in 2009. Since then the technology has skyrocketed, with people across all organizations and industries learning about what it is and how they can use it.  

"One of the reasons [security] hasn't been covered is there's been a lot of movement around blockchain," says Steve Povony, head of advanced threat research at McAfee. "Every major company and industry is buying and implementing some form of blockchain."

The problem, he continues, is a lack of understanding among users. This, combined with blockchain's myriad security complications, has created a rapidly growing technology that's misunderstood from a security perspective. Sure, blockchain is fundamentally secure, but it's also a deregulated, decentralized, and unmanaged platform. The power goes to end users, who are responsible for ensuring transactions are done right.

"We're not seeing new iterations or something fundamentally different about the way blockchain is being attacked and the ways it's being used maliciously," Povony explains. "The same problems that plague us with every security issue are present in blockchain as well."

Cybercriminals Target the Blockchain
However, variations related to blockchain pose new threats. Take "brain wallets," for example, which are designed to help people manage private keys. Brain wallets have keys generated by a word or easy-to-remember seed, which makes them susceptible to attacks.

In most cases, blockchain's consumers are the easiest targets. Researchers attribute this to a "start-up mentality" in which growth often trumps security. In its report, McAfee's team broke blockchain threats into four groups: phishing, malware, implementation exploits, and tech vulnerabilities.

Phishing attacks are the most familiar blockchain threats given their commonality and success rate. Most threat actors don't care who their victims are so long as they pay, and they're not picky about the currency. Attackers also use malware to obtain lesser-known cryptocurrencies, such as Monero and Dash, the latter seen in GandCrab ransomware.

Malware targeting blockchain takes several forms. One is cryptojacking, in which cybercriminals hijack a target browser to mine currency. Malicious coin mining on the endpoint had an "explosive resurgence" in late 2017 and early 2018, McAfee reports, as new miners appeared and old miners were reformatted with mining capabilities. While miners primarily target PCs, they've also been known to hit smartphones.

The third attack vector is blockchain implementation and its supporting tools. These threats are more like exploits of traditional software and Web applications, researchers explain, and attackers are less likely to succeed the closer they get to the blockchain. The threats go back to the root of a common problem: people who use blockchain without understanding it.

"Similar to any complex technology, if the person implementing or using blockchain or cryptocurrency doesn't fundamentally understand the tech, you have inherent weaknesses there," Povony explains. "When you don't think about the details, you end up with a widened attack base."

The last class of attacks is on how blockchain operates. Much of the security focus on blockchain relates to the integrity of the ledger and the tech supporting it. However, it's on users to adopt secure practices for this to work. Researchers cite the example of dictionary attacks, which try to break a victim's password or other means of authentication.

While the blockchain has been well-researched and has potential, you should still approach the technology with caution. Attackers are targeting the blockchain by revamping old threats with a modern twist; as a result, even phishing attacks can compromise blockchain users.

"The key message here is do your due diligence," Samani says. "Yes, there is money to be made, but honestly, with great opportunity comes great risk."

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