Impact of blockchain on cybersecurity

28 March 2018

Cyber security is an urgent issue for all modern people living in the era of information, which is transferred over the Internet. Security companies continuously make efforts to develop and upgrade their products aimed at protecting consumer and corporate machines and mobile devices against data breach and other types of cyber-attacks. However, as the practice shows those efforts prove insufficient as attackers are becoming wiser and their actions are getting more sophisticated and ‘ingenious’. Could blockchain become the last word in cyber security, ensuring better data and systems protection?

Higher layer of authentication

Conventional systems require users to enter their usernames and passwords to authenticate themselves and confirm their actions performed to initiate a transaction, send an application, request a loan etc. Usually the information about login credentials is stored by third parties called Certificate Authorities. In case of data breach suffered by such Authorities, all sensitive data will leak into the hands of hackers, and they may create false keys to tamper accounts.

Blockchain allows organizations to use a distributed public key system to authorize users by their devices, where each device is assigned a special SSL certificate, which is better than a password. Certificate data is managed on the blockchain making it harder for perpetrators to attack the system and use false certificates.

Besides, if hackers use false credentials to make a login into an account within the blockchain environment, the system traces the discrepancies and prevents further actions.

Transparency and decentralization

When transmitting data online websites usually encrypt it to protect against any leaks and thefts, but decrypting the data on the other end requires special keys, which also should be kept secret. It complicates the process of data protection, and there are risks that the private keys may be stolen.

Blockchain is an open ecosystem, where all information is publicly available, and all participants of the network may verify the data, which ensures that the information cannot be forged or removed. Moreover, all actions are recorded into the blocks interconnected with previous blocks: it means that the data is replicated in every subsequent block. Thus, when the system compares the newly created block with the whole chain, and finds that it contradicts other blocks, it will be disapproved and recognized as false.

DDoS attacks

Current centralized system of managing domain names makes it easier for attackers to derange a large number of websites, because domain names of many financial services providers are usually hosted by the same centralized providers. In contrast, storing domain names on a blockchain will result in countless efforts for con-artists to incapacitate websites, because the DNS becomes completely decentralized on the blockchain technology. Blockchain involves a large number of nodes storing the data, and hackers will have to delete data on every such node all at one time in order to orchestrate a successful DDoS attack.

Accurate records

All transactions performed on the blockchain network are accurately recorded and updated to ensure that every participant could view the changes in the data. Every transaction is timestamped and is provided with a digital signature, which means that any participant may trace the chain of actions back to any particular time period and find the location of a certain party that initiated the transactions.

Thus, every action initiated on the blockchain is cryptographically linked to a user, who performs it. This structure contributes to the reliability and sustainability of the system, ensuring non-repudiation of transactions.


Most blockchains use consensus protocols to process and complete transactions made within the network. Consensus protocol presupposes that before a certain transaction is approved by miners and gets completed, the author of the transaction should provide a specific proof, acceptable for a certain blockchain, that his/her ownership is true and that the transaction does not involve double spending.

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