In 2014, Mt. Gox, one of the largest cryptocurrency exchanges (managing approximately 70% of all transactions in Bitcoin) had been the victim of successful hacking attempts for a period of three years, and Mt. Gox’s customers lost 750,000 Bitcoins. Bitcoin lost over a third of its value when the full extent of the fraud was revealed.
In 2016, Bitfinex, one of the most popular cryptocurrency exchanges in the world was hacked, and 120,000 Bitcoins were stolen, representing a market value (at the time) of nearly $72 million. In 2018, there has been a steady flow of news reports revealing all manners of cryptocurrency fraud and token theft, Coinrail, BitGrail, Coincheck are just a few of the hacks exposed this year.
Clearly, making blockchain as safe and secure as possible is the highest priority. When investing in the computing power necessary to utilize blockchain in an enterprise, it makes sense that companies want to ensure the highest level of security for their most sensitive data. There are a few theories about how to best accomplish this task.
1. Decentralize the blockchain. When the blockchain is spread out over a large network, it becomes more difficult to attack it. However, this theory has not been well-tested.
2. Requiring permission. If only a select handful of people in business have the authority to access the blockchain, it could lead to a higher level of security. However, critics say that a system requiring permission overrides the true intent of blockchain.
Hong Kong-based MATRIX AI Network is using artificial intelligence (AI) to improve the safety and security of blockchain transactions. MATRIX AI Network’s security engine can identify bugs and vulnerabilities in smart contracts, leveraging the power of AI to maintain the safety of digital assets under malicious attacks. Because it is adaptable, the AI can self-optimize over time and improve at finding additional defects that could put transactions and funds at risk. MATRIX AI Network’s security framework consisting of four major components: (1) a rule-based semantic and syntactic analysis engine for smart contracts; (2) a formal verification toolkit to prove the security properties of smart contracts; (3) an AI-based detection engine for transaction model identification and security checking; and (4) a deep learning-based platform for dynamic security verification and enhancement.
The MATRIX Secure Virtual Machine can detect attacks on transactions by providing AI-backed vulnerability detection with fault-tolerant protocols, explains MATRIX AI Network CEO Owen Tao, in other words, we have introduced formal verification technology during transactions to detect security vulnerabilities. Because it is adaptable, the AI can self-optimize over time and improve at finding additional defects that could put transactions and funds at risk.
Trail of Bits, Chain Security, Sigma Prime, and other blockchain cybersecurity companies are being called upon to audit code, identify vulnerabilities and help fix issues that can be exploited by malefactors. In a recent Fast Company interview, Trail of Bits CEO Dan Guido shared the observation that There’s some bugs that are egregious… If you make them, not only are they highly severe ”they’re also highly visible to someone looking at your smart contract code.
Ultimately, the security and safety of a blockchain must be established early to build trust and confidence. Advance planning and strategizing are necessary to avoid or reduce the risk of potential future issues, which is why consulting companies and AI-based alternatives are gaining wider use. For any business enterprise, enhancing blockchain safety and security will require a lot of time, energy, and resources, but the effort may be worth it for many companies. The global blockchain technology market size is expected to reach USD 7.59 billion by 2024, according to a new report by Grand View Research, Inc., registering a 37.2% CAGR during the forecast period, with increased demand driven by financial services, consumer or industrial products, technology, media and telecom, healthcare, transportation, and public sectors.
In the healthcare privacy space, technology security experts struggle to find the right balance and how best to integrate blockchain, with its obvious benefits, to an area where privacy and security is paramount. By reducing data to what is absolutely necessary, having shared vulnerability management across all participants with strong agreed-upon standards, even for downstream systems, enforcing collaboration and preventing a computational majority, along with strong identity management, HIPAA and AICPA standards can be enforced, even in a distributed environment, and security can be increased for all participants, argues Mitch Parker, Executive Director, Information Security and Compliance at Indiana University Health.
The key question to answer, regardless of industry, according to Harvard Business Review, is to decide whether a private company’s blockchain will be public or private. Each has its pros and cons. Private blockchains offer a sense of control over the system, while public blockchains provide a feeling of transparency among stakeholders. Either way, blockchain technology is gaining wider acceptance as early adopters see the potential for greater transparency, upgraded security, improved traceability, superior efficiency, enhanced transactional speed, and lower costs.
