Many people are not mistaken when they assume blockchain is inherently secure. However, blockchain also has some drawbacks when it comes to security. Blockchain is definitely helpful for businesses, although with a heavier downside due to its particular security issues. Armors, a well-known blockchain security company, summarizes the issues worthy of attention in blockchain security in 2021.
1.Flash loan attack
2021 is the year when flash loans broke out, and many Defi projects were attacked by flash loans. The Cream Finance attack is a typical flash loan attack for price manipulation. After obtaining a large amount of funds through the flash loan, the contract design flaw is used to significantly change the price and make a profit. Flash loan attacks will cost more than $6 billion in 2021.
Armors believes that market price oracles and governance tokens can mitigate lightning attacks.
2.Reentrancy attack
Re-Entrance attack vulnerability is one of the attack methods in Ethereum. As early as 2016, the hard fork of Ethereum was caused by The DAO incident. Reentrancy attacks are similar in nature to recursive calls in programming, so they can happen when a contract sends ether to an unknown address.
Simply put, there are two conditions for a reentrancy attack vulnerability: 1. An external contract is called and the contract is insecure; 2. The function call of the external contract is earlier than the modification of the state variable.
3.51% Hashrate Attack
Obtaining the hash value of the blockchain through malicious means, computing power is crucial. Therefore, a compromised blockchain could result in transaction reversals and double-spending. In 2018, three prominent cryptocurrency platforms encountered a 51% hash rate attack. The three platforms are Ethereum Classic, ZenCash and Verge. To this day, due to the 51% computing power attack, the annual loss is still more than 20 million US dollars.
4.Blockchain endpoint vulnerabilities
Another notable risk in blockchain security is the vulnerability of blockchain endpoints. Few people care about the security of blockchain transaction endpoints.
Data recorded on the block is secure. However, wallet accounts are not necessarily safe. Some online wallets will keep users’ passwords in some temporary files, and these are likely to be used by hackers. In 2021, more than $800 million in encrypted assets will be stolen due to insecure wallets.
5.Routing attacks
The next prominent concern for security and privacy issues in blockchain technology is routing attacks. Blockchain networks and applications rely on massive real-time data transfers. Now, hackers can easily intercept data while it’s in transit to ISPs. The danger of routing attacks in blockchain security is their anonymity.
Since everything works, blockchain actors cannot easily spot the threat of routing attacks. Routing attacks are often used to reveal confidential data or gain monetary gain without alerting network participants. Therefore, it is clear that routing attacks are deadly as they can cause considerable damage before detection.
6.Phishing Attacks
Phishing is one of the most common decoy techniques used by hackers. This is basically a scam attempt to obtain user credentials. The hacker sends an email to the wallet key owner by pretending to be a real and authoritative source, and the email requires the user to authorize his relevant information through a fake hyperlink. Once the user clicks the fake link to enter, and fills in his own password or private key, the user Digital assets are immediately transferred by hackers. In 2021, the loss of encrypted digital assets caused by phishing incidents will exceed 1.5 billion US dollars.
Armors Company Limited (www.armors.io) was established in 2017 and is one of the earliest professional blockchain security labs. Armors has provided security audits penetration testing, cross-chain migration, platform security and other comprehensive guarantees and services for more than 1,000 blockchain platforms, exchanges, wallets, smart contracts, etc. Armors has secured over $6 billion in digital assets for clients in 5 years. At present, Armors is recruiting blockchain security engineers and business development leaders in various regions around the world.
