Security Issues in Blockchain-Based Businesses

Security Issues in Blockchain-Based Businesses

Rajesh Yadav, Digvijay Singh
Copyright: © 2023 |Pages: 10
DOI: 10.4018/978-1-6684-5827-3.ch012
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Abstract

A few years back, it was arduous to identify cyber-security in the day-to-day activities of an organization. Writing extra code-lines was considered insignificant, and the term was considered more advanced than the current times. Most businesses were doubtful about changing their plans so that they could combat this danger as the notion of “it won't occur to me” was famous. Cyber-security is now no longer a “forbidden silo.” It is considered a necessity and is no longer selective. The organization must have its security planning in such a manner that it plays an important role in its business as well as the decision-forming in the significant matters of the company. In today's scenario, organizations must have a check on their defense system to ensure security in operations. They use updated solutions and have proper information on vulnerabilities and security issues that persist at the moment. This chapter throws light on security issues in blockchain-based businesses.
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Introduction

Blockchain and its Components

Blockchain technology is basically the simplest form of a digital ledger. It is like a personal ledger in terms of recording different transactions. But technically it is different from the conventional methods of centralizing things. It is completely based upon a decentralized approach where the blockchain is shared and a distributed ledger is used to record the transactions.

Figure 1.

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This ledger is immutable and is responsible for facilitating transactions in a business network. It is ideal state of delivering information as it is transparent. Key factors of this technology comprise of 3 things- Smart Contracts, Immutable records, and distributed ledger. The main benefits of using a blockchain technology over the conventional methods is mainly because of the greater trust and more efficiencies which are offered by the distributed ledger. There are mainly 4 types of blockchains. Each type has a special purpose and is highlighted below.

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    Public blockchain- This type of blockchain is open to all for the participation. Bitcoin is one of the biggest public blockchain where multiple users can join it. Public blockchains carry a drawback of consisting weak security.

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    Private blockchain- This type of blockchain is not open for public participations, however, it is similar in terms of decentralization like the public blockchain. In a private blockchain, one organization is responsible for governing the network and the participants for executing the consensus protocols.

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    Permissioned blockchain- Most of the business organizations relying on the blockchain based solutions use a private block chain but set up a permissioned network. This type of blockchain is called as permissioned blockchain. It sets a restriction in the network participation. Only invited participants can be permitted to join the blockchain network.

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    Consortium blockchain- The Hyperledger is considered as a consortium blockchain. It is not open to all and is applicable in the cases of smaller groups which takes advantages in terms of throughput, privacy, speed, and less energy consumption.

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