Blockchain has been a buzzword in the tech industry for quite some time now. What is blockchain for consumers and how can they protect themselves from cyberscams and other threats? This article aims to delve into what Blockchain is, and explore its impact on personal cybersecurity.

A Secure Record of Transactions

Blockchain is a decentralized ledger technology that allows for the secure recording of transactions across a network of computers. Each block in the chain contains a record of transactions, and these blocks are linked together in chronological order. Each block is also cryptographically secured, making it extremely difficult for malicious actors to alter the information. This feature is foundational to Blockchain encryption, which ensures that data integrity is maintained.

For consumers, blockchain offers a way to exchange value or verify information without needing a traditional middleman like a bank or a government agency. This means consumers can have more control, transparency, and security in their transactions and data privacy. It also means, however, that they also have more responsibility for managing their own information and security—like remembering passwords and securing private keys.

Examples of Consumer Applications of Blockchain

Imagine sending money, owning digital art called non-fungible tokens (NFT), or verifying a product’s origin—all done directly between you and the other party, with records securely stored on the Blockchain for transparency and trust. These are just some ways you can apply blockchain. The examples below demonstrate how blockchain is becoming more than just a buzzword—it’s shaping everyday consumer experiences with greater control, trust, and convenience.

1. Cryptocurrencies for Peer-to-Peer Payments

Blockchain’s most well-known use case is cryptocurrencies like Bitcoin and Ethereum. These digital currencies allow consumers to send and receive money directly, anywhere in the world, without needing banks or payment processors, offering a faster and often cheaper way to implement international transfers.

2. Digital Identity Solutions

Blockchain enables self-sovereign identity, where individuals own and control their personal data instead of relying on centralized authorities. As a consumer, you can decide who sees your information and revoke access anytime—boosting privacy and reducing data breaches. Instead of storing your ID in multiple apps and websites, you can use a blockchain-based ID to verify yourself only once, securely and privately.

3. Smart Contracts

Smart contracts are self-executing agreements coded on the blockchain. When pre-set conditions are met, the contract runs automatically without human intervention, reducing the need for third parties such as notaries, lawyers, or brokers, and lowers the risk of fraud or manipulation. For instance, a landlord and tenant agree to a rental payment schedule. Once the requisite payment via blockchain is made, the smart contract then automatically gives the tenant access to the apartment.

4. Supply Chain Tracking

Blockchain can record every step of a product’s journey from origin to consumer, ensuring traceability and authenticity. This process helps consumers verify manufacturer or sellers’ claims about a product such as “organic” or “sustainably sourced.” Let’s say you are buying coffee tagged as “single-origin,” you can scan a QR code and trace the beans back to the exact farm they were grown, with all transactions recorded transparently.

5. Loyalty and Reward Programs

Because of the digital nature of transactions, blockchain-based loyalty systems are more flexible, transparent, and interoperable. Rewards points can then be tokenized, traded, and even used across different platforms, giving consumers more value and control over their rewards, unlike traditional programs where points can expire or are siloed. For instance, the points you earn from an airline can be used at a hotel or online store that accepts the same blockchain-based tokens.

The Security that Blockchain Provides

Blockchain’s protective layers collectively create a robust and trustworthy system that enhances security for consumers while avoiding and fighting cyber threats. Here are other ways Blockchain can enhance cybersecurity:

Ensures Data Integrity

The transparent nature of Blockchain allows all parties to verify the accuracy of the data in real time, reducing discrepancies. By using Blockchain encryption, each transaction is linked to its predecessor through a cryptographic hash. This chaining process ensures that no single entity can alter the data without consensus from the majority of the network. Essentially, altering a single block would require altering all subsequent blocks, making fraudulent activities computationally unfeasible.

Enhances Data Authenticity

The authenticity of data is another area where Blockchain security shines. Traditionally, verifying the authenticity of data requires complex and often unreliable procedures. Blockchain simplifies this by using public and private keys to sign transactions, ensuring that only authorized participants can make changes. This is a particularly important advantage for organizations concerned about the integrity and authenticity of their data, such as healthcare, finance and supply chain.

Secures IoT Devices

By integrating Blockchain encryption, IoT systems can distribute data across a decentralized network, reducing the risk of a single point of failure. With Blockchain security in place, each Internet of Things (IoT) device can securely store and transmit data, verified by multiple nodes in the network. This ensures that the data remains tamper-proof and enhances the overall security posture of the entire IoT ecosystem.

→ Related: How to Protect Your Internet-Connected Healthcare Devices

Streamlines Identity Management

Traditional identity verification processes are often cumbersome and prone to security risks, such as identity theft and fraud. Through encryption, Blockchain security can provide a more secure and efficient method for managing identities, while enabling users to create a self-sovereign identity that they control. This eliminates the need for centralized identity repositories, which are attractive targets for hackers. Additionally, Blockchain-based identity management systems can streamline verification processes.

→ Related: How to Identify the Different Forms of Identity Theft

Blockchain Security Risks and Considerations

While Blockchain security offers a number of benefits, it does have its weaknesses, which cybercriminals love to exploit. These weaknesses can range from human error to sophisticated hacking techniques. Here are some of the most prevalent types of cyber attacks involving Blockchain:

Compliance

As Blockchain and its applications are relatively new, many jurisdictions have yet to establish comprehensive regulations governing its use. This can create uncertainty for consumers who want to use it and organizations looking to implement its security solutions.

51% Attacks

The 51% attack occurs when a single entity gains control of more than 50% of the network’s computing power. This is usually possible in smaller Blockchain networks, where it’s easier to gain computational power, manipulate transactions, double-spend coins, and even halt transactions altogether. To address this, Blockchain security experts are working to develop more advanced Blockchain encryption techniques and are promoting wider participation to distribute computational power more evenly.

Phishing Attacks

Phishing doesn’t directly target the Blockchain network itself but rather its users, as cybercriminals use disguised emails or websites to trick individuals into revealing their private keys or other sensitive information. Once they have this data, they can gain unauthorized access to the user’s Blockchain assets. If you are considering using Blockchain, it is important to learn to recognize phishing attempts and apply Blockchain cybersecurity best practices.

→ Related: How to Avoid Being Phished by Your Phone

Smart Contract Exploits

Smart contracts are self-executing contracts with the terms of the agreement directly written into code. The risk lies in the possibility that hackers can exploit vulnerabilities in the smart contract code to manipulate outcomes or drain funds. For example, the infamous DAO attack on the Ethereum Blockchain resulted from a flaw in the smart contract’s coding, leading to millions of dollars being stolen. Ensuring that smart contracts adhere to best practices for coding and security can help mitigate the risks associated with these types of exploits.

Sybil Attacks

In a Sybil attack, a malicious actor creates multiple fake identities to gain disproportionate influence over the network. With this large number of fake nodes, the attacker can disrupt the network, manipulate consensus processes, and potentially double-spend resources. To combat this attack, Blockchain security networks often require a financial stake or computational proof of work, as well as ongoing monitoring and analysis of the network.

Routing Attacks

In routing attacks, malicious actors intercept and manipulate the flow of data between nodes in the Blockchain network, delaying or preventing the nodes from receiving and transmitting information. This disrupts the consensus process and allows attackers to double-spend coins or execute other fraudulent activities. To protect against this, Blockchain networks employ decentralized and encrypted communication channels, as well as redundancy and multiple communication pathways to keep the nodes connected and participating in the consensus process.

DDoS Attacks

Distributed Denial of Service (DDoS) attacks aim to overwhelm a network by flooding it with excessive traffic. If a majority of nodes responsible for mining or validating transactions are taken offline, the entire network’s functionality can be compromised. Protecting against DDoS attacks involves implementing robust measures, such as firewalls, intrusion detection systems, and traffic filtering. Additionally, distributing the network’s workload across multiple nodes can help minimize the impact of the attack.

→ Related: What is a Botnet? And What Does It Have to Do with Protecting “Smart Home” Devices?

Measures to Ensure Blockchain Security

Blockchain technology is revolutionizing industries with its promise of enhanced security, transparency, and efficiency. However, as its adoption grows, so do the challenges of maintaining robust cybersecurity. Consumers must be vigilant to protect their Blockchain applications and transactions. Here are key measures you can apply to ensure Blockchain security:

Choosing Secure Wallets and Exchanges

Use reputable wallets and exchanges with strong security measures. Look for platforms that offer multifactor authentication and regularly update their security protocols.

Regularly Updating Devices and Software

Ensure that your devices and applications are always up-to-date with the latest security patches. This helps protect against vulnerabilities that cybercriminals could exploit.

Using Strong, Unique Passwords

Employ strong, unique passwords for all Blockchain-related accounts. Consider using a password manager to keep track of complex passwords and change them regularly.

Monitoring Transactions

Regularly monitor your Blockchain transactions and account activity for any unusual behavior. Early detection of unauthorized transactions can prevent further issues.

Using Device Antivirus

Install and regularly update antivirus software on all devices used for Blockchain activities, including mobile. A reliable antivirus helps protect against malware and unauthorized access that could compromise your Blockchain interactions and overall security.

Final Thoughts

From enhancing identity management and securing IoT devices to safeguarding supply chains, the applications of Blockchain in cybersecurity are vast and varied. Future Blockchain innovations are likely to focus on enhancing already-robust security measures, making industries more resilient against cyber threats.

However, it is essential to acknowledge the challenges associated with regulatory compliance, security, and interoperability. Staying informed and partnering with legitimate and knowledgeable cybersecurity experts like McAfee will be crucial in navigating this transformative journey.