Blockchain Security And Related Concepts (Byzantine Fault Tolerance, Consensus Mechanism, And Attach Scenario In Blockchain)

Blockchain technology enables decentralization through the participation of members across a distributed network where there is no single point of failure, and a single user cannot change the record of transactions. Given the decentralized nature of the Blockchain, there are no central authorities that validate and verify the transactions on the network, however, every transaction is secured and verified. For this to happen, a core aspect of any Blockchain network has to be present, it is called the consensus protocol/ mechanism.

Blockchain is a database that stores information electronically in digital format. It is critical to note that Blockchain is different from a traditional database in that while conventional data is collected in tables, Blockchain collects its information in groups (blocks).

Blockchain technologies differ in some critical security aspects, with who can participate and who has access to the data. Networks are typically labeled as either public or private, relating to who is allowed to participate, and permissioned or permissionless, relating to how participants gain access to the network. However, as much as it is considered secure, Blockchain is susceptible to cyber-attacks. Blockchain security is a comprehensive risk assessment and management procedure for a blockchain network to ensure its security. Security is achieved by incorporating assurance services, cybersecurity frameworks, and best practices to mitigate the risks of fraud and cyber-attacks.

Consensus Mechanism

Consensus mechanisms are the protocols, algorithms, or computer systems that enable cryptocurrencies to work. They (proof of work, proof of stake, etc.) are systems of agreement reached by all nodes (miners or computers) in a network that determine the validity of a transaction and then verify the transaction. In this way, it is the accuracy of the consensus protocol that makes blockchain technology reliable. The consensus protocol ensures that "51% attack" is unachievable and each transaction carried out on the network is the one and only one, therefore, eliminating the double spending issue.

The consensus mechanism is fundamental to the blockchain network. It influences how transactions are verified, how much energy is used, network fees, transaction speed, and other currency and network application details. The Blockchain consensus protocol consists of some specific objectives, such as coming to an agreement, collaboration, cooperation, equal rights for every node, and the participation of each node in the consensus process. Thus, a consensus algorithm aims to find a joint agreement that makes for the success of the entire network.

Byzantine Fault Tolerance

Byzantine Fault Tolerance (BFT) is a consensus approach that prevents a system from the difficulty decentralized networks have in agreeing on a single truth. It is a vital instrument for reducing the effect of malicious byzantine nodes on the network and ensuring that the blockchain network functions normally despite malicious actors. BFT is a system's structure that can resist the class of failures and can continue operating even if some of the nodes fail. BFT is one of the fundamental properties of creating reliable blockchain rules or protocols. Byzantine Fault Tolerance is akin to a fail-proof system based on specific parameters that have been put in place.

Byzantine Fault Tolerance is used in industries beyond Blockchain, such as aviation, space, and nuclear power, due to the high priority on safety and security. All necessary security and safety systems work with many interconnected sensors or computers acting as nodes. These nodes need to communicate with each other reliably, and BFT comes into play when a portion of these nodes become faulty, yet the system has to and is still able to function as intended. A candid approach to achieving or creating a secure Byzantine fault tolerance in Blockchain is through consensus algorithms.There are various consensus algorithms based on the business network requirement of the Blockchain. The most important and widely used are;

Proof of work (PoW)

It is one of the first consensus protocols used in blockchain applications. It is a method of verifying new transactions and tracking the creation of new cryptocurrencies/ tokens on the Blockchain. The idea behind this algorithm is to solve a complex mathematical puzzle, a process known as "mining," and give out a solution. This mathematical puzzle requires a lot of computational power, and thus, the node that solves the puzzle as soon as possible gets to mine the next block. Bitcoin and Ethereum 1.0 use proof of work (PoW) as their consensus protocol. In the case of an attack, the attacker would need to gain control of 51% of the currency all nodes have put together.

Pros

• Widely used by most popular cryptocurrencies

• Extremely secure

• Rewards cryptocurrency miners for enabling new transactions

Cons

• High electricity use

• It May require expensive hardware

• lt for individual miners

Proof of stake (PoS)

Proof of Stake is the most common alternative to PoW. Ethereum has shifted to PoS consensus; a low-cost, low-energy consuming alternative meant to improve upon perceived flaws of Proof of Work (PoW). In this type of consensus algorithm, instead of investing in expensive hardware to solve a complex puzzle, validators invest in the coins or stake capital in the form of ether into a smart contract on Ethereum. This staked ether (minimum of 32 ETH) then acts as collateral that can be destroyed if the validator behaves dishonestly or lazily. Those who own a certain substantial amount of a cryptocurrency have the power to validate transactions and create new blocks for that cryptocurrency network and receive rewards. It is like an investment system where investments yield returns. In the case of an attack, the attacker would need to gain control of 50% of the currency all nodes have put together.

There are a lot more consensus algorithms listed below;

Proof of Burn (PoB)

Validators' burn' coins by sending them to an address from where they are irretrievable to earn the privilege of randomly being selected to mine on the system.

Proof of Capacity (PoC)

Validators are supposed to invest their hard drive space. The more hard drive space, the better their chances of getting selected to mine and earn rewards.

Proof of Activity, Proof of Weight, Proof of Importance, Leased Proof of Stake, Proof of Elapsed Time, etc.

Attack Scenarios In Blockchain

Security threats on the Blockchain happen in these primary ways: phishing, routing, Sybil, and 51% attacks.

Phishing attacks

Phishing is an online fraud aiming to scam or trick people into providing sensitive information such as passwords, credit card numbers and wallet addresses. Fraudsters pretend to be trusted people or entities, send targeted users emails or share malicious links on public channels. They request users credentials using fake hyperlinks. Suppose the scammer gains access to a user's credentials and other sensitive information. In that case, it results in a loss for the user or the blockchain network.

Routing attacks

Blockchains rely on real-time, large data transfers. Hackers can intercept data as it is being transferred to internet service providers. Blockchain participants are unaware of the threat in a routing attack because data transmission and operations proceed as usual. The risk of this attack is that fraudsters extract confidential data or currencies behind the scenes without the user's knowledge.

Sybil attacks

In a Sybil attack, hackers generate and use many false nodes on the network to obtain majority consensus and disrupt the chain's transactions leading to a 51% attack.

51% attacks

Mining requires vast computing power, especially for large-scale public blockchains. A 51% attack is possibly the most dreaded threat in the blockchain business. It happens when a malicious user in a network acquires control of a given Blockchain's mining power. Having more than 50% of the power means hackers can modify the order of transactions and prevent them from being confirmed. They can also reverse previously completed transactions, resulting in double-spending. Private blockchains are not vulnerable to 51% attacks.

Conclusion

While these algorithms may not completely prevent these attacks, they make them impossible for hackers to carry out. Blockchain is incredibly hard to corrupt because of the anonymity and security features embedded within the technology.