Cyber Security: An Analysis of Blockchain and Bitcoin Vulnerabilities

Desklib provides past papers and solved assignments for students. This report analyzes cybersecurity threats in blockchain and Bitcoin.

Cyber Security

Contents
Introduction:...............................................................................................................................3
Cyber Security:...........................................................................................................................4
What is cyber security:...........................................................................................................4
Cyberspace:................................................................................................................................4
Types of cybersecurity:..............................................................................................................5
Cybersecurity in blockchain and bitcoin:...................................................................................6
Cyber attack on Mt. Gox:...........................................................................................................6
The impact of blockchain and bitcoin on cybersecurity:...........................................................8
Improve the cybersecurity:.........................................................................................................9
Conclusion:..............................................................................................................................11
References................................................................................................................................12

Introduction:
Cybersecurity is the set of latest technologies that used to protect the systems, networks, data
and program from the digital attacks. The goals of the cyber attacks are to harm the system
with access and change the information and destroy the network. Implement cybersecurity in
an organization to prevent the complete system from these attacks.
The goal of the cybersecurity report is to enhance the skills and knowledge of the people
about cybersecurity. The report will include the types of cyber security with recent attacks
examples, their solution and recommendations for future security. Select a real example of
cyber-attack on the bitcoin and blockchain in the report and discuss its different factors.

Cyber Security:
What is cyber security:
Cybersecurity defines as the unwanted attacks on the integrity of the system networks and
programs to damage them and to access the information. Cybersecurity is an approach that
used with the multilevel protection layers to secure the organization network, programs and
data from hackers or attackers. People need to understand the principles of cybersecurity with
implement strong password, take back-up of data and work under the cybersecurity
framework. Cybersecurity is important at both levels, individual and professional as it
required to protect information from the cyber-attacks. The cyber security used to cover
different areas like application security, disaster recovery, network security and information
security (Lord, 2019).
Figure 1: Cyber Security
Source: (frontlineinc, 2019)
Cyberspace:
The term cyberspace is related to cybersecurity, cyberwar, cybercrime, cyberterrorism and
others. Cybersecurity defines as the security of cyberspace, where cyberspace is the virtual
computer world or the electronic medium that used for the communication over a network.
Internet is the network of the all the virtually connected computers that used to perform
different functions like, arithmetic, logical functions with using the electrical, optical and

magnetic impulse. Cyberspace is dynamic, exponential and undefined compare to a physical
world that is static and incremental (Rajnovic, 2012).
Types of cybersecurity:
Cybersecurity is important in each area like, government, corporate, military, medical,
financial and others to collect and securely store data in the computer devices. Here are
different types of cybersecurity attacks are defined as like, malware, phishing, cross-site-
scripting (XSS), SQL injection attack, denial-of-service (DoS and others.
 Malware: An antivirus alert pop-up on the computer screen and if a user mistakenly
clicks on this than attackers use this pop-up to enter into the system and this is known
as the malware attack. It has some more forms like, ransomware and virus that silently
damage the computer system and take control of all the process.
 Phishing: a fraud attempt that used to access the information of the user’s system like,
username, password and credit/debit card details of the users. In this process, a hacker
sends an email that related to the user’s normal email and it used to click on this mail
that it activated as a virus in the system.
 SQL injection attack: SQL vulnerabilities are used in this kind of attack with the SQL
queries that used to communicate with the database. Websites and server use
structured query language (SQL) to store the data in the database and the hacker uses
the same SQL command to execute the database.
 Cross-Site Scripting (XSS): in this type of attack, attacker directly attacks to the
user’s browser, not on the servers or websites. The attacker injects with the malicious
scripts to the vulnerable webpages and saves the script to the database. With this
process, data contain the malicious script and send to the server (SecureWorks, 2017).

Figure 2: XSS
Source: (Bocetta, 2018)
 Denial-of-Services (DoS): a type of cyber-attack in which attacker interrupts the
system process and functions and reduce their functionality. This attack divides into
two categories like buffer overflow attacks and flood attacks (cloudflare, 2019).
Cybersecurity in blockchain and bitcoin:
Bitcoin is the cryptocurrency or the digital currency that was created in 2008 by Satoshi
Nakamoto for the purpose of making a flexible process of payment with complete control
over it without need the third party. Blockchain is the technology on which the bitcoin
transactions work without the need for a central authority. Bitcoin is a secure way of
transaction, but this technology also hacked in some cases, that we discuss as followed. Here
are some biggest bitcoin hacks as below:
Figure 3: Cybersecurity in blockchain and bitcoin

Source: (blockchain-council, 2019)
 Mt. Gox hack in 2011 in Japan
 Bitfloor in 2012 in the USA
 Poloniex in 2014 in New York
 Bitstamp in 2015 in Slovenia
 Bitfinex in 2016 in Hong Kong
Cyber attack on Mt. Gox:
These are major examples of cybersecurity attacks in bitcoin & blockchain process. Select
Mt. Gox that hack on 19th June 2011 in Shibuya, Tokyo. The organization launched in 2010
and it handles more than 70% bitcoin transaction in all over the world as it is the world’s
leading bitcoin exchange and largest bitcoin intermediary. The organization announced that
850,000 bitcoins are missing or stolen which have a total value of $450 million. It was the
cyber-attack on the organization and the company did not found what technique hackers used
to steal the money. The exact stolen amount was not confirmed by the organization and they
blame on the unspecified weakness of the organization. As per one of the statements of the
company, they blame on the design issues of the organization but the chief research officer of
the company, Mikko Hypponen said that the issues were found in the coding of the system
that was discovered at the time of the attack. The company also allow converting the bitcoins
into dollars and the same opposite (Schwartz, 2014).
Some basic causes of the cyber attacks in blockchain and bitcoins are like, suspected inside
job that is unknown to all. The funds outs from different wallets and laundered. The other one
cause is to be stolen from private key missing or stolen and provide access to the hacker with
a good amount and NEM tokens. Take action against the hackers by the company and pay a
refund to the users (Jenkinson, 2018).
There are some problems with the Mt. Gox that was not identified by the management before
the attack and these problems were tracked after the attack by the management. here are some
basic problems as below:
 Lack of A VCS: version control software is the part of software development in an
organization with different reasons
o It provides the functionality to keep track all the process of the system and
codebase. User can see the time of changes with using the VCS as well as know

about the person who made changes. The option of undo changes is also available
with using the VCS.
o The other functionality of the VCS is to reduce the fear of overlapping as more
than one programmer can do the program together.
 Lack of testing: Mt. Gox did not have any rules and standard related to the testing
policy as it was the world biggest bitcoin exchange platform without a testing phase.
 Bottleneck issues: the changes of the system approved by the CEO of the
organization as it was the end of the system.it is an example of bad management and
at last the management had the problem with the coding of the system.
 Lack of proper management: this is the summary of all the issues that the
management of the organization was very poor and childish.
A minor price crash was happed in 2011 in the organization in which attack hack the auditory
system for the transfer of good amount in the form of bitcoins into these accounts. This all the
process was done using the software of the organization and the value of bitcoins dropped
dramatically. In 2014, when the main robbery did that is around $473 million due to the delay
of the system and company suddenly stopped all the bitcoin transactions with the reason of
technical process in the company with short notice to resolve the issues as soon as possible
(black geeks, 2019).
The impact of blockchain and bitcoin on cybersecurity:
Bitcoin debut in 2008 in this world with an expected hope of changing the technical process
and cybercriminals. But after some time, it proved wrong as it was one of the more troubles
making technique at that time. Here are some positive and negative impacts of the bitcoins on
cybersecurity inductor as below:
 Bitcoin and ransomware: bitcoin provide a reason for the attackers to protect the
people money in the form of illegal money laundering. With the use of bitcoin, people
also had a reason for anonymity and it encourages the number of new cyber attacks.
 Rise of Blockchain technology with Bitcoin: blockchain build by the bitcoin, that is
decentralized communication system to address different cybersecurity problems.
Blockchain was implemented as the authenticate solution of the bitcoin transactions
and it could be the future of cybersecurity. The main problem with the security
systems is like easy to detect/locate, overtake by attackers and give different options
to hackers of attack. Blockchain is decentralized and offline technology as it is a more

secure system. It is a highly distributed database that can be replicated as a large
network of computer systems. The database continues update by the network and
blockchain database can’t be stored at a single point or location and it is not easy to
access and difficult to hack.
 Minimize the customer details to the security breaches: in recent years, some data of
the customers was hack by the attackers as these data keep by each organization about
its customers. The data like name, email, address, bank information with a credit card
and other personal information. In this data of customers, some cant is encrypted so it
is easy to hack by the attackers. In the case of bitcoin, it is not required to share the
financial information with the organization as a brand and company don’t need
physical authentication each time.
 Customer can store their currency in offline Bitcoin wallets as it is not easy to track
and hack the decentralized blockchain network as it the growing threat of keylogger
activity. With install the keylogger in the user’s wallet, it is easy to detect their wallet
and hack it. The bitcoin members aware people in their network about the risk of
keylogger and its applications (Tudja, 2017).
Improve the cybersecurity:
Identify different applications for the security of the blockchain as well as improve the
security of the data sharing and storage, navigation, utility of world wide web, cyber security
of IoT, and network security.
 Data sharing and storage: ledgers of private and public distributed are used to abolish
the single failure source from the given ecosystem to protect the data. IoT provides
the facility to store the blockchain data on the cloud with the authorised change
flexibility as well as store securely and maintenance with easy searching. This data
can be verified with users and blockchain improves the sharing of security with data
storage by creating the decentralised network with client-side encryption.
 The utility of WWW & Navigation: improve the security of wireless internet access
point by authorising the user’s credential to store the blockchain transactions. Use the
DNS records for the navigation purpose of the web pages and utilise safely the web
applications and secure communication with encrypting methods. implement these
solutions in the blockchain and control the complete set of nodes of the network.

 IoT: track the data management and prevent data from malicious access by
implementing the permission access control in the nodes of the network. Use the
blockchain to improve the security of the firmware deployment with peer-to-peer
propagation and provide identification of IoT device with seamless secure data
transfer and authentication.
 Private user data: it is hard to implement the private user data policy in the blockchain
as everybody has a duplicate copy of ledger for the privacy purpose and data
protection. Encrypt the user device and store the blockchain by the user would be an
option for the private user data that can be retrieved only by the user.
 Network security: Improve the SDNs using blockchains and similar to use containers
for the authentication of critical data that stored in the decentralised database. Use the
cluster structure to the control the blockchain enabled architecture of SDN as this
architecture used to private and public communication between the nodes in a
network (Taylor, P.J., Dargahi, T., Dehghantanha, A., Parizi, R.M. and Choo, K.K.R.,
2019).
Figure 4: Improve Cybersecurity
Source: (Roberts, 2019)

Conclusion:
Explained cybersecurity with its different types and cyberspace in the current report of
cybersecurity. Take the current issue of cybersecurity in the area of blockchain and bitcoin
with the organization of Mt. Gox of Tokyo, Japan. Define this cyber attack briefly with its
impact on the bitcoin market and on the blockchain. Provide recommendations as to the
improvement of cybersecurity.

References
blockchain-council (2019). The Future of Cyber Security: Blockchain Technology. [online]
Blockchain-council. Available at: https://www.blockchain-council.org/blockchain/the-future-
of-cyber-security-blockchain-technology/ [Accessed 9 May 2019].
blockgeeks (2019). 5 High Profile Cryptocurrency Hacks - (Updated) - Blockgeeks. [online]
Blockgeeks. Available at: https://blockgeeks.com/guides/cryptocurrency-hacks/ [Accessed 9
May 2019].
Bocetta, S. (2018). How To Protect Your Website Against A Cross-Site Scripting (XSS)
Attack | Acunetix. [online] Acunetix. Available at:
https://www.acunetix.com/blog/articles/how-to-protect-your-website-against-a-cross-site-
scripting-xss-attack/ [Accessed 9 May 2019].
cloudflare (2019). What is a Denial-of-Service Attack | Cloudflare. [online] Cloudflare.
Available at: https://www.cloudflare.com/learning/ddos/glossary/denial-of-service/
[Accessed 9 May 2019].
frontlineinc (2019). Security Risk Assessment Los Angeles, IT Security | Frontline, LLC.
[online] Frontline, LLC. Available at: https://www.frontlineinc.com/it-security/security-risk-
assessment-los-angeles-it-security/ [Accessed 9 May 2019].
Jenkinson, G. (2018). Mt. Gox, Coincheck, Binance and More: How Exchanges Are Learning
to Deal With Cyberattacks. [online] Cointelegraph. Available at:
https://cointelegraph.com/news/mt-gox-coincheck-binance-and-more-how-exchanges-are-
learning-to-deal-with-cyberattacks [Accessed 9 May 2019].
Lord, N. (2019). What is Cyber Security? Definition, Best Practices & More. [online] Digital
Guardian. Available at: https://digitalguardian.com/blog/what-cyber-security [Accessed 9
May 2019].
Rajnovic, D. (2012). Cyberspace – What is it?. [online] blogs@Cisco - Cisco Blogs.
Available at: https://blogs.cisco.com/security/cyberspace-what-is-it [Accessed 9 May 2019].
Roberts, D. (2019). 5 Essential Steps To Improve Your Cybersecurity Strategy. [online] EC-
Council Official Blog. Available at: https://blog.eccouncil.org/5-essential-steps-to-improve-
your-cybersecurity-strategy/ [Accessed 9 May 2019].