Blockchain is threatened by cybercriminals, study finds

Researchers have found that cyber threats are bringing blockchain security into question on critical infrastructure

Miners who use calculations to validate transactions through blockchain technology could be at risk, according to joint research from Australia and Iran.

A study by Charles Darwin University (CDU) and the University of Tehran found that cybercriminals are tricking miners, who use the blockchain to power cryptocurrencies.

Miners who receive cryptocurrency as payment can be attacked by criminals who want to steal some of their computing power.

Professor Mamoun Alazab said this new attack method on blockchain was worrying because of its high success rate, especially when the blockchain technology is used in critical infrastructure.

“The deceptive attack is orchestrated by someone redirecting some miners’ computing power to another chain so that it (the attacker) can outrun the main chain and thus make the fork the dominant one,” he said.

Miners typically receive compensation for using their computational power to verify transactions on a specific blockchain.

“The chain, which miners are misdirected to, is designed to lose in the competition, and so is the main chain. Everything is for the attacker’s chain to win and become dominant.

“This vulnerability could also increase the success of other types of blockchain attacks,” Professor Alazab explained.

How does this affect cryptocurrencies?

Bitcoin, like other cryptocurrencies, is not safe from attack, according to Professor Alazab.

“But this new deceptive attack, along with some high-profile attacks that have cost millions of dollars, have shown that blockchain technology, especially Bitcoin, is not as secure as we think, or as it needs to be for use in critical infrastructure.”

The study found that Bitcoin’s blockchain technology was vulnerable, but deceptive attacks are not possible on Ethereum’s blockchain technology due to the tracking system.

Dr Ghader Ebrahimpour and Dr Mohammad Sayad Haghighi were also involved in the research from the University of Tehran.

“If preventive or compensatory measures are not taken, this attack could undermine confidence in a blockchain security and lower its value,” Dr Ebrahimpour said.

Blockchain miners have been warned about the effects of their work if it is used in financial systems or critical infrastructure.

Professor Alazab said there could be different solutions to the threat.

“One is to change the design and remove the block reward. The miners must then be rewarded out of transaction commissions.

“The concept of uncle block reward, similar to Ethereum, can also help mitigate the problem,” he said.