How is Blockchain Affecting Cyber Security

How is Blockchain Affecting Cyber Security

Blockchain technology is revolutionary and will bring meaningful differences in how people do business. How is blockchain affecting security?

In order to stay away from rugged definitions and cumbersome visualization, let us, for starters, try to imagine Lego blocks in a digital world. Every time a transaction is made, in a digital sense of the word, another block is added going all the way to the most recent transaction.

Initially, blockchain was thought of as an accounting tool that became recognized as distributed ledger technology (DLT), currently found in a sizable number of commercial applications. As it grew, it evolved into contemporary society as verification method for transactions, (digital currencies aka. crypto currencies) but what is also very important to note is the fact that in the 21st century it is not impossible to imagine its use and application through digitalization, coding, and insertion of practically any document into the blockchain.

It is most definitely worth the consideration of such an application and approach, if for no other reason than for a sheer fact of creation of a record that cannot be changed. In addition, further benefits speak in favor of the record’s authenticity which is verified by the entire community using the blockchain instead of a single centralized authority.

It is easy to see now how this type of technology is beneficial for financial ledgers and, apart from the bitcoin mining process, most of the idea surrounding bitcoin and ethereum are based on this lack of cyber risk against data breaches. There is a lot more to know about cryptocurrenty, but that is not the only thing the blockchain technology can be used for.

Let’s go back for a second to Lego blocks. A single block is a note, an entry related to the immediate transaction but what happens to it once another transaction is made? Once it becomes part of the entry, first of all, it becomes a permanent part of a log (database). Second, every time a block gets completed, a new one is generated. Over and over again, countless numbers of such blocks in the blockchain are tied to each other (chained) in chronological order. What is also paramount to note is the fact that each block holds a hash of the previous block thus the chain has complete information about different user addresses and their balances right from the initial block to the most recently completed block.

Main Rationale behind Blockchain

In order to prevent fraudulent and deceitful actions, the blockchain was designed as a safeguard making the transactions immutable, meaning they cannot be deleted. The blocks are added through cryptography, ensuring that they remain meddle-proof: The data can be distributed, but not copied.

However, the ever-growing size of the blockchain is considered by some to be a problem, creating issues of storage and synchronization but that we will discuss at the later stage in terms of the ways block chains can affect cyber security. For the time being, we need to discuss the origin of blockchain in order to understand better why it could possibly become a problem and/or an issue in the cyber/virtual world of today.

Main Uses of Blockchain

If as a basic example we approach the idea of blockchain in terms of conventional banking, the blockchain can be viewed as a full history of a financial institution’s transactions. If that is so then each block can be perceived as an individual bank statement. When it comes to the database system, that we could attribute a description so much like an open electronic ledger, then blockchain can simplify business operations for all parties.

Based on this rationale, this type of technology is attracting not only financial institutions and stock exchanges, and also many others in the fields of music, diamonds, and insurance, because of its possibilities for a wide application. To push the envelope even further, this type of an electronic ledger system could very well be applied to voting systems, weapon or vehicle registrations by state governments, medical records, or even used as confirmation of ownership of antiquities or artwork.

The potential of this approach and its possibilities are enormous as (DLT) has the potential to simplify current business operations but its also important to note that although banking institutions were originally cautious in adopting these technologies, nowadays their attitude and understanding has shifted into solutions that would allow blockchain to enable them in cost savings by allowing back-office settlement systems to process trades, transfers, and other transactions much faster.

DLT systems make it possible for businesses and banks to streamline internal operations, dramatically reducing the expense, mistakes, and delays caused by traditional methods for a reconciliation of records.

The widespread adoption of DLT will bring enormous cost savings in three areas, namely:

– Electronic ledgers are much cheaper to maintain than traditional accounting systems decreasing the number of employees;
-Nearly fully automated DLT systems result in far fewer errors and the elimination of repetitive confirmation steps;
-Minimizing the processing delay also means less capital being held against the risks of pending transactions.

How is blockchain affecting cyber security. | Le VPN

Main Obstacles

For this particular topic, we have to put technological advances aside and think about the human aspect of things.  The real problems can arise in areas of politics, ratification and regulatory approval, and the many thousands of hours of custom software design and front and back-end programming still required to link up the new blockchain ledgers to current business networks. While no one can change the information in the blockchain itself, they could be able to use the IP address that you reach your blockchain wallet and hack your device. This is why VPN providers like Le VPN offer a nice boost to your security when dealing with sensitive information.

It is not as simple as a wave of the magic wand since for everything to work perfectly and without any flaws, DLT must interface with other parts of the operational processes seamlessly. Blockchain should enable more rapid setup, training, and reduce problem resolution time. Achieving the efficiency gains must be easy enough/cheap enough for all parties involved to grasp and leverage.

Security also remains a concern. Banks are not interested in an open-source model for identity. Both banks and regulators want to maintain close control. The development of a single digital identity passport authorizer is a critical next step.

Regulation is also critical in creating an open digital environment for commerce and financial transactions. Current physical certificates must be digitized to gain the full benefits of a fully electronic system. In addition already voiced concerns we must consider even more hurdles along the way of fully adopting these technologies if for no other reasons then the necessity of finding the right answers to questions like:
Who will bear the main responsibility for maintaining and managing the blockchain? What about the admission of new participants to the blockchain?
In terms of transactions – who do we turn to when it is time to validate them and who determines who sees which transactions?

Given the incredible opportunity for decentralization, blockchain technology offers the ability to create businesses and operations that are both flexible and secure. With blockchain, we can imagine a world in which contracts are embedded in digital code and stored in transparent, shared databases, where they are protected from deletion, tampering, and revision.

In this world, every agreement, every process, every task, and every payment would have a digital record and signature that could be identified, validated, stored, and shared. Individuals, organizations, machines, and algorithms would freely transact and interact with one another with little friction. This is the immense potential of blockchain.

Main Concerns When it Comes to Cyber-Security

Regardless of the fact that blockchain application when it comes to businesses and governments might be still farfetched when it comes to global acceptance, what is certainly beyond dispute is it has the potential to create new foundations for both economic and social systems. The process of adoption will be gradual and steady, not sudden, as waves of technological and institutional change gain momentum. That insight and its strategic implications are what we’ll explore in this article.

Although we can easily pinpoint obvious advantages of blockchain in terms of a decentralized environment, there are quite a few others as well, namely:
– Verification of the integrity of the database;
– Time-stamping of all the changes;
– Enables easy backup in real time;
– Simplified audit of the book/records;

It would all be perfect if we disregard certain obstacles within the realm of governance, responsibility, constantly evolving and growing volume of data, capacity issues, confirmation etc.

Nothing is Safe yet, but it Very Well Could Be

Since the initial appearance/application, the evolution of the blockchain may very well be slow but its steady and it is now being tested in virtually any field you can imagine, from travel to medicine and beyond. When it comes to cyber technologies, paramount importance revolves around security and safety.

Blockchain’s potential for security applications is very serious as the essence of blockchain technology makes it the perfect foundation for cybersecurity.

One of the things that evolve alongside security and safety in the digital world are dangers, attempts to hack anything that has code in it thus virtual and yet very real threats evolve at the same rate and adapt accordingly.

What we should agree on is also the fact that human aspect of things when it comes to errors and misjudgments is number one factor when it comes to cyber security. Blockchain successfully resolves this issue and eliminates it with easy and reliability thus it is vital then to consider how exactly we can utilize the potential of the blockchain in order to apply it in real-world security applications. To boost this security, you will need to add more layers of protection: A good VPN, like the one provided by Le VPN, a good anti-virus, and an updated operating system with all the new security protocols.

How is blockchain affecting cyber security. | Le VPN

Securing Data at all Times

An all-time top priority is the question are cryptocurrencies secure, and the blockchain technology in general  as the technological industry was, and still remains, focused on protecting protecting customer data. This is brought to a higher level of relevance when the data is highly sensitive (medical records, financial information).

Cyber-attacks stand for obtaining such records and the unauthorized use thereof, especially in instances where data could have been protected easily. Blockchain technology has already been used in this regard to ensure the security of financial transactions by enabling transparency of transactions that cannot be manipulated, corrupted, moved and/or deleted allowing all relevant parties to rely upon this technology before, during, and after the transactions.

The very same approach could be attributed when it comes to storage of sensitive information. The blockchain records everything and does not allow for the manipulation of data, certainly not without it being obvious to hosts/relevant parties. The obvious conclusion is indicating that when the technology foundation is highly secure, everything around it can be built to make sure that this kind of security is standard throughout.

In addition, as hard as it may seem currently cyber-security is, unfortunately, an area that only those with a serious budget can invest on. In the 21st century one of the main concerns is privacy and when you think about it, try not to forget recent incident regarding the amount of personal information used by the companies like Facebook; no one wants to see said information leaked to third-parties without consent.

Advantages of Blockchain

It is easy to pigeonhole the blockchain technology with digital currency and cryptocurrency exchanges, but there is a myriad of reasons why more and more fintech companies are emerging and offering financial services. Startups and multi-million dollar companies alike prefer to use a platform that is almost impervious to security breaches and where they can offer their users improved security against cyber attacks.

Blockchain is all about security. It has enabled us with the solution that is simple, effective and, equally important, affordable. It has positioned itself as a digital remedy that would ensure that our cyber-security needs are not only met but also surpassed.

Off course it is unreal to even begin to contemplate about the number of technologies we use on a daily basis so it should come as no surprise that the level of dependency on it could also be dangerous and harmful and used against us. Just think for a second how much data an average individual has stored in the cloud, on your mobile device or on your computer.

If for no other reason than just that, it is paramount to explore research and view the online safety and cyber-security aspects of contemporary society as nothing less than priorities. Blockchain allows us to build a future where online threats will be kept at bay or at least reduced to a bare minimum.

If we narrow it down to just the core of the whole concept then it all boils down to the ability of any individual or all organizations to effectively conduct data protection operations and attack preventions. In simple terms it relates to protecting the ability of an individual to obtain and use the sensitive data including but not limited to exploiting said information, analyzing, processing, disseminating, storing and/or generating relevant information while at the same time successfully interfering with the ability of an adversary to do exactly the same. Any such attempt needs countering, disabling by any and all means in order to prevent cyber-enabled systems from being compromised.

Given the evolving cyber threat, traditional cyber solutions when it comes to protection of data are most unlikely to improve. This threat not only includes a growing array of embedded computing devices and the use of malware, but also data manipulation more than just a simple data theft.

Blockchain technology in its core averts data manipulation. Blockchain platforms break many of the flaws associated with traditional approaches regarding network security. Initially, cyber threats are assumed already. Furthermore, blockchain technology depends on cryptographic data structures that are perfect as foundations for security protocols and blockchain technology use algorithmic consensus mechanisms. This construction is free from fault, reliable and allows system designers to rethink and redesign the fundamental architectures of cyber networks and systems.

When we mentioned a budget that is being spent per year on a global scale of cybersecurity, it is estimated to be around $450 billion a year.

The decentralized nature of the blockchain offers a design where there is not only a lack of a single point of failure but what is more important to note, no central database that could be compromised. When it comes to the ways the blockchain technology improves and aids cyber security it could be very well explained in layman terms. Relevant data is stored in several databases. The blocks are then linked to the next block in the chain and also hold the hashtag over a previous block. In that manner, there is no viable entry for hackers, and other cybercriminals, which in turn provide far greater extent to security issue when compared to a centralized environment.

Current Technology in Future Use

As we previously noted and observed, if we get rid of logins and passwords altogether, institutions and similar businesses can authenticate devices without the need for a password system. How is this done? By providing an SSL certificate and eliminating human factor completely hacks are avoided as no logins or passwords are used for authentication making the whole system less prone and susceptible from being compromised and manipulated.

The blockchain can detect any changes and leery activities in the system in real time. Imagine that somebody is successful in entering the system and getting his hand on a block in blockchain, as soon as he alters the information, system would be able to detect it and in turn perform an examination of all the blocks in an effort to identify the faulty/altered one thus in the end that particular block would be removed from the system.

Yet another aspect of blockchains improves and aids cybersecurity and that is done through transparency and traceability by the use of digital signature and a time stamp. The fact is that a blockchain makes all transactions visible to all the relevant parties in the process making it easy to trace any and all transactions back to the specific date and time and name and location of the party involved in the transaction. Another rather neat aspect of blockchain is the related to the fact that all transactions are cryptographically associated to a specific user, thus the shady one can be pinpointed, detected and located fairly easily.

At this day and age, one particular danger stands and in a form of DDoS attack from our existing Domain Name System. Blockchain technology would spoil this by offering a decentralized environment for the DNS, consequentially by altering and dissemination of the data in question to a greater number of nodes. In turn, this would make it a better place but most importantly a safer and a more secure place to store the world’s data.


There is no doubt that the blockchain technology is revolutionary and something that will bring meaningful differences in how people do business. This being said, it is not without its faults and there are still a couple of quirks that need to be ironed out before we are able to use the technologies full potential.

In the meant time, you will need to protect yourself and to be sure not to give your sensitive information online, or to allow others to see your IP address or browsing habits while utilizing the technology. Using Le VPN, you can hide your IP address and be certain that no hacker can overtake your crypto wallet, or other sensitive information.

*Article Updated On March 15th, 2019.*



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Written by Vuk Mujović @VukMujovic

Vuk Mujović is the founder of MacTíre Consulting, an analyst, data management expert, and a long-term writer on all things business & tech. He authored blogs, articles, and opinion pieces aimed to help both companies and individuals achieve growth without compromising their security. Vuk is a regular guest author to Le VPN Blog since January 2018, where he gives his expert opinion on the topics related to cybersecurity, privacy, online freedom, and personal data protection. He also often shares his tips and best practices in relation to internet security and digital safety of private individuals and small businesses, including some additional applications of using a VPN service.

Comments (3)

  • Blockchain Online Training

    In the era of Digital currency, The blockchain technology is the most important factor to grow the digital currency is having the own advantage and disadvantage. When its Come to digital some security issue arises and it is very harmful. The reason that is explained by you is true Main Concerns with cybersecurity.
    Thanks for sharing.

  • charlestonglory

    It’s very interesting! You may check another blog which I have read it on search. It Seems it’s similar to this article.

  • meritstep technologies

    Nice Blog.Thanks for sharing

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