The global losses from cybercrime are projected to reach $10.5 trillion annually by 2025, according to cybersecurity research firm Cybersecurity Ventures. While blockchain technology may not be a complete solution to stop cybercrime, its mainstream adoption could certainly help in mitigating the risks. Blockchain, with its security features like cryptography, decentralization, and consensus, is considered a core security technology by Ronghui Gu, co-founder of blockchain security firm CertiK. Industries such as healthcare and finance, which heavily rely on data integrity, could benefit from the higher level of security provided by blockchain. For instance, storing patient records on a blockchain could reduce the risks of data breaches and unauthorized access while giving patients more control over their data. Some companies are already exploring the use of blockchain for storing and managing medical records, and even releasing COVID-19 medical certificates on the blockchain.
The centralized nature of standard data storage systems makes them attractive targets for cyber attackers, and many current systems lack mechanisms for individuals to verify how their data is being used. Blockchain and Web3 technologies can address these issues by decentralizing data storage and reducing the risk of centralized points of failure and unauthorized access. The distributed ledger technology that blockchain is built on eliminates single points of failure, making it more resistant to traditional cyberattacks like data tampering and network penetration. CertiK’s annual “Hack3d: The Web3 Security Report” for 2023 shows that over $1.8 billion in digital assets was lost across 751 Web3 security incidents. While blockchain is not immune to cyberattacks, its decentralized nature provides stronger security. To change a distributed ledger, a hacker would need control of more than half of all machines, making it nearly impossible to alter data once it is entered. Each transaction on a blockchain is secured with powerful cryptography, ensuring that only those with the correct keys can act on behalf of an address.
Different types of cyberattacks, such as investment scams and business email compromise, result in significant financial losses and the exposure of sensitive information. Gu believes that the use of smart contracts can help reduce instances of these common cyberattacks succeeding. Smart contracts are transaction protocols that automatically execute actions based on predefined conditions. By ensuring that transactions are executed only when certain conditions are met, smart contracts can reduce the risk of fraud in the financial industry and automate compliance tasks.
However, completely eliminating cybercrime is not realistically achievable, as cybersecurity is an evolving field with new vulnerabilities and attack vectors emerging with new technologies. Human errors, such as weak passwords and phishing scams, contribute to a significant amount of cybercrime. While education can help reduce these risks, it is unrealistic to expect every user to be infallible. Additionally, the socioeconomic dimension of cybercrime, driven by financial incentives, makes it challenging to eradicate entirely. According to Statista data, the funds stolen from cybercrime victims are projected to reach over $13 trillion by 2028. The goal should be to minimize cybercrime and mitigate its impacts through resilient infrastructures and informed users, rather than completely eliminating it.
Johann Polecsak, co-founder and CTO of QANplatform, believes that while blockchain alone is not a silver bullet against all cyberattacks, it can increase security in specific fields when implemented well. Hardware-based signing tools can effectively mitigate key-management issues, narrowing down the point of failure. Eskil Tsu, co-founder of GoPlus, thinks that blockchain is the only thing that can help reduce cybercrime. Its inherent properties of decentralization, transparency, and immutability can significantly mitigate risks and reduce the surface for online attacks.
Blockchain technology also offers potential solutions for preventing AI-based cyberattacks, such as phishing and impersonation scams. Decentralized identity and credentials, often implemented using blockchain, can have a significant impact on reducing cyberattacks. Phishing attacks, which account for 43.3% of all email threats, can be curbed through decentralized identity and credentials. Deepfakes, which have become a cause for concern, can be detected using blockchain-based content credentials, as they would not be signed by the right issuer. Blockchain can also prevent the generation of fake documents used for fraud in KYC processes.
In conclusion, while blockchain technology may not be a complete solution to stop cybercrime, its mainstream adoption can certainly help in minimizing the risks and mitigating the impacts. Industries that rely heavily on data integrity, such as healthcare and finance, can benefit from the higher level of security provided by blockchain. By decentralizing data storage, reducing centralized points of failure, and implementing smart contracts and decentralized identity systems, blockchain can contribute to a more secure digital environment. However, it is important to acknowledge that completely eradicating cybercrime is not feasible, and the focus should be on minimizing it through resilient infrastructures and informed users.