How secure is blockchain really?
Even when developers use tried-and-true cryptographic tools, it is easy to accidentally put them together in ways that are not secure, says Neha Narula, director of MIT’s Digital Currency Initiative. Bitcoin has been around the longest, so it’s the most thoroughly battle-tested.
People have also found creative ways to cheat. Emin Gün Sirer and his colleagues at Cornell University have shown that there is a way to subvert a blockchain even if you have less than half the mining power of the other miners. The details are somewhat technical, but essentially a “selfish miner” can gain an unfair advantage by fooling other nodes into wasting time on already-solved crypto-puzzles.
Another possibility is an “eclipse attack.” Nodes on the blockchain must remain in constant communication in order to compare data. An attacker who manages to take control of one node’s communications and fool it into accepting false data that appears to come from the rest of the network can trick it into wasting resources or confirming fake transactions.
Finally, no matter how tamperproof a blockchain protocol is, it “does not exist in a vacuum,” says Sirer. The cryptocurrency hacks driving recent headlines are usually failures at places where blockchain systems connect with the real world—for example, in software clients and third-party applications.
...Since the DAO code lived on the blockchain, the Ethereum community had to push a controversial software upgrade called a “hard fork” to get the money back—essentially creating a new version of history in which the money was never stolen. Researchers are still developing methods for ensuring that smart contracts won’t malfunction.
The centralization question
One supposed security guarantee of a blockchain system is “decentralization.” If copies of the blockchain are kept on a large and widely distributed network of nodes, there’s no one weak point to attack, and it’s hard for anyone to build up enough computing power to subvert the network. But recent work by Sirer and colleagues shows that neither Bitcoin nor Ethereum is as decentralized as you might think. They found that the top four bitcoin-mining operations had more than 53 percent of the system’s average mining capacity per week. By the same measure, three Ethereum miners accounted for 61 percent.
Some say alternative consensus protocols, perhaps ones that don’t rely on mining, could be more secure. But this hypothesis hasn’t been tested at a large scale, and new protocols would likely have their own security problems.
Permissioned systems, however, raise their own questions. Who has the authority to grant permission? How will the system ensure that the validators are who they say they are?
So in the end, “secure” ends up being very hard to define in the context of blockchains. Secure from whom? Secure for what? “It depends on your perspective,” says Narula.
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