Cybersecurity Risks in the Blockchain Industry You Need to Know About
Many people explore Blockchain technology since it’s a promising and disruptive new way to track transactions without needing a centralized authority. But this new technology poses cybersecurity risks that enterprises must address before they deploy blockchain in their organizations.
This article will illuminate the potential risks, outline how to mitigate them and provide best practices for ensuring security when using blockchain.
What Are the Risks Associated With the Blockchain Industry?
Blockchain technology promises many benefits, including increased efficiency, better customer experience, and cost reduction. However, it also presents several risks to enterprises.
The Blockchain Industry is Volatile and New
The blockchain industry is still very volatile. Like the dot com boom, there is a lot of excitement and hype around blockchain. However, there have been few proven use cases, and many startups have already gone under. This unpredictability may be concerning for enterprises that are used to working with vendors with a proven track record.
There may also be concerns about vendors’ longevity and ability to deliver on their promises as cryptocurrency prices fluctuate wildly. Some vendors may even go bankrupt or be hacked and lose customer funds. A vendor who becomes insolvent due to inconsistent payments or fraud can risk the entire blockchain ecosystem.
To even navigate to the blockchain, users are required to input their private key. Therefore, any phishing attack on the blockchain would likely need a user’s private key. Loss of sensitive data could have severe consequences for enterprises that are particularly sensitive about their data.
Similarly, if a phishing attack were to succeed and the private key is compromised, the attacker would have access to all data stored on the blockchain—a very lucrative target for hackers.
Smart Contract Risks
Smart contracts are a new technology that enables transactions to be automated and self-executing. Contracts can codify terms into code; once completed; control is automatically transferred through the blockchain from the one who initiated the transaction to the recipient.
Blockchain has been touted as a potential solution to contract disputes by creating an immutable record. Still, the reality is that smart contracts can create more problems than they solve for enterprises.
Why Is Knowing the Cybersecurity Risks Associated With the Blockchain Industry Important?
Effective cybersecurity is essential to protecting enterprise data regardless of how the industry evolves.
While it is possible that a blockchain can solve the problems with IT governance and security management, enterprises must understand the risks associated with blockchain technology before they deploy it in their organizations.
How to Mitigate the Cybersecurity Risks in the Blockchain Industry?
The blockchain industry is growing like crazy. However, with so many new and exciting things happening, it’s easy to forget that risks are involved.
Knowing the best cybersecurity practices and developing a strategy before joining the industry will help to mitigate these risks.
Deploy a Secure Identity and Access Management System
Implementing a comprehensive, integrated, and scalable identity and access management system can deliver greater control over identity. For example, this will ensure that you can track who has access to which blockchain and that the private key is safely stored.
Develop Cybersecurity Awareness Training Programs
It’s essential to ensure all blockchain users are aware of potential cyber threats and understand how to engage with the technology safely. In order to secure user data and be a part of the blockchain ecosystem, it is necessary to provide education to the general public.
The blockchain industry is new, and it’s growing fast. Resulting in lots of opportunities to make mistakes and chances to get them right.
As the industry continues to evolve, it’s important for all stakeholders—from developers to executives—to keep an eye on cybersecurity risks so that we can create a safer and more secure environment for everyone involved. For more content about the blockchain industry, check out our blog now.