Cybersecurity is getting critical as cybercriminals continue to exploit new vulnerabilities and cyber-attacks show no signs of abating. As such, while regulatory authorities are busy drafting stringent cybersecurity standards, cybersecurity companies are aggressively developing innovative cybersecurity solutions based on the latest technologies. Blockchain technology is one such disruptive technology that can potentially transform the overall concept of cybersecurity.
Although blockchain technology was initially introduced as a way to store or transfer Bitcoin, the first cryptocurrency, it has gradually advanced and become versatile enough to be used for several applications, including cybersecurity. Implementing a blockchain-based security system fundamentally changes the game for cyber security, presenting a nearly impossible task for cyber thieves. The blockchain technology is being applied by cyber security companies in the field to create private blockchain solutions:
- Deterring data tampering
- Creating peer-to-peer consensus mechanisms to reduce fraud
- Creating end-to-end privacy and encryption
- Ensuring that there is no single point of failure
According to a study undertaken by Grand View Research, the blockchain technology market is anticipated to grow at a CAGR of 69.4% over the next six years. The following chart illustrates the growth of the market size for the Blockchain Technology Market from 2015 to 2018 and the expected growth from 2019 to 2025.
Source: Grand View Research
Blockchains can be broadly classified into two types:
- Permissionless blockchains: Such blockchains envisage service providers making information, applications, and storage available to the public over the Internet and offering services either for free or on a pay-per-usage basis.
- Permissioned blockchains: Such blockchains envisage delivering services only to authorized individuals or organizations. These blockchains often leverage predefined restrictions to ensure high security.
Source: Grand View Research
Some of the features that allow the blockchain technology to be used for cybersecurity purposes are discussed below:
Decentralized storage architecture:
Cybercriminals tend to target centralized data storage sites and try to destabilize the system as a whole. However, the blockchain technology works on non-central authority or storage location and such scattered or decentralized architecture can particularly reduce the risks of cyber-attacks and ensure adequate security for critical user data. Moreover, the blockchain technology also offers inherent operational resilience as there is no single point of failure, which means no data would be lost or no ledge would be compromised in the event of a cyber-attack.
Legal contracts, property transfers, and escrow services are some of the applications that can be secured using blockchain technology, as such applications are mostly controlled by a system hosted on a single computer or a set of computers located at a single location and are hence vulnerable to cyber-attacks.
Given that the blockchain architecture does not involve any centrally-held databases, blockchain technology can also help in optimizing costs. Clearly, blockchain technology is turning out to be an ideal option for developing cybersecurity solutions owing to its unique architecture design. As such, while several key players are investing in blockchain technology, several technology companies have partnered with blockchain developers in order to leverage the benefits of blockchain technology, and investments in blockchain technology are expected to increase as a result over the forecast period.
Blockchain involves multi-level encryption at different points, thereby ensuring complete protection against cyber-attacks. Moreover, user activities are also secured through public/private key encryption or asymmetric key cryptography. This encryption process envisages encrypting the blocks using a mixture of digital signatures and cryptographic hashing. The latter is particularly based on public/private key encryption. As a result, the use of blockchain technology in cybersecurity is expected to increase over the forecast period.
Hackers often target and tamper network-connected devices for stealing sensitive data such as mailing addresses or bank account details that may be stored on some of these devices. Traditional cybersecurity solutions may fail to provide protection to the new-age consumer electronic devices that are getting advanced and smarter and have several new access points. However, blockchain technology can offer protection by continuously monitoring sensors of smart, connected devices, and endpoints, thereby enabling secure monitoring of transaction or data transfer. Such IoT devices can potentially communicate with organization-defined distributed systems based on blockchain. These distributed systems can autonomously manage, collect, and analyze the security system of the endpoint. Such innovative approaches of blockchain technology not only curb attacks such as DDoS but also provide actionable security intelligence across distributed peers. Several companies have entered the market with cybersecurity solutions backed by blockchain technology. For instance, WISeKey, a Switzerland cybersecurity company, offers blockchain-powered digital identity solutions to protect Internet of Things (IoT) data and devices.
Preventing distributed denial-of-service (DDoS) attacks:
Attacks through compromised IoT devices, attacks based on machine learning and artificial intelligence, and DDoS attacks emerged as the most common threats in 2018. The instances of attacks through compromised IoT devices increased particularly in 2018. However, DDoS attacks have been increasing since 2014, thereby prompting cybersecurity companies to consider DDoS attacks as a major threat. Companies, such as Spotify, Twitter, and SoundCloud, among others, have already encountered DDoS attacks. The existing Domain Name System (DNS) happens to be a major challenge in preventing DDoS attacks. However, leveraging blockchain technology to completely decentralize the DNS can help in overcoming this challenge. In this process, the data is distributed across various nodes, thereby making it very hard for cybercriminals to hack it. Companies have already started implementing blockchain technology to prevent DDoS attacks. For instance, Blockstack provides a fully-decentralized option for DNS. The company provides a world wide web decentralized platform by annulling the need for third-party integration to manage ID systems, web servers, and databases. Similarly, MaidSafe of the U.K. is also providing a decentralized platform that can be used for storing data in a secure environment.
Gladius, a U.S.-based cybersecurity company, offers distributed and decentralized Content Delivery Network (CDN), Web Application Firewall (WAF), and DDoS protection solutions based on blockchain technology. The underlying characteristic of auditability, transparency, immutability, data encryption, and operational resilience in blockchains could potentially improve the cyber defense capabilities of an enterprise.
Blockchain envisages every participant having an identical copy of the ledger. This arrangement makes it easy to identify any malware transmitting or collecting information in the network as well as to trace the hacker, as hacking every node of data in the blockchain can be very challenging. Such real-time auditing and monitoring ensure complete protection of the data. For instance, software security company Guardtime has successfully implemented blockchain technology to secure critical data. In the event of a cyber-attack, the company’s solution analyzes the entire data mass of chains, compares it with the metadata packet, and raises alerts if any malfunctioning is detected.
Blockchain technology in the future:
Blockchain technology is also gaining traction in the technology, media, and telecommunications industries. When it comes to the media industry, having realized that magazine readers may not be willing to pay for the entire magazine to read only the content of their own interests, magazine vendors can leverage the blockchain technology to charge their readers on per article basis rather than making them pay for the entire magazine. Such a practice could further open opportunities for magazine vendors to target the niche segments of the market. Similarly, blockchain technology can also allow organizations to safeguard their intellectual property and digital creative works.
Currently, the major application of the technology lies in the banking and financial services sector. However, blockchain holds enormous opportunities across multiple application arenas. Healthcare and public sector applications are expected to witness enormous growth in the time to come. This is due to the fact that the current implication of the technology is restricted only to the BFSI segment as the actual model of blockchain is yet to be implemented in the core applications.
The numerous benefits associated with blockchain technology can potentially have ramifications on several industries, including consumer goods, technology, media, telecommunications, and BFSI, among others. Several leading incumbents of the technology and BFSI industries have already started investing aggressively in the blockchain technology.
The growing popularity of Internet of Things (IoT) is particularly prompting technology companies to leverage the power of blockchain technology. The distributed ledger technology can enable a higher level of coordination among a myriad of connected electronic devices. IBM Corporation (U.S.), Microsoft Corporation (U.S.), and Samsung Group (South Korea) are some of the leading companies that are already showing interest in the technology. For instance, Microsoft Corporation has partnered with R3, a U.S. based consortium as part of the efforts to gain a competitive advantage over Amazon Inc. and Google Inc. Similarly, IBM Corporation and Samsung Group have recently produced a proof of concept to demonstrate the capability of blockchain technology to support IoT-based applications.
Incumbents of the BFSI industry are expected to use blockchain technology for transaction settlement, payment, trade finance, regulatory information provision, clearing, and fund distribution, among other applications. Blockchain technology can also help banks in enforcing KYC compliance. For instance, in the Netherlands, several banks are entering into a partnership with Innopay to use blockchain technology to ensure that transactions are permitted only between KYC-compliant parties.
Indeed, blockchain technology can form a basis for end-to-end cybersecurity solutions that can provide adequate protection from cyberattacks and malware attacks while ensuring data availability, data confidentiality, and privacy protection. Blockchain’s decentralized architecture can particularly play a vital role in building cybersecurity applications. Blockchain technology can also help in overcoming the challenges, such as storage limits, irreversibility, and integration complexity, usually associated with cybersecurity. In other words, blockchain technology can provide a disruptive platform to build robust cybersecurity solutions capable of securing not only the data but also the overall processes.
Rising vulnerability of network, thanks to the rising numbers of access points and several modes of access, and rising threats such as DDoS, malware, and phishing have created awareness that there are no foolproof methods to thwart cyber-criminal from compromising data/information. The problem seems even more daunting as financial losses due to such threats within healthcare, manufacturing, energy & utility, and BFSI sectors are growing swiftly. However, the advanced technology, coupled with vital steps such as employee training and adoption of risk mitigation solutions, is expected to reduce the chances of a sophisticated cyber-attack. Blockchain provides a strong method for securing networked ledgers, thereby offering increased efficiency and more transparency. Thus, the use of blockchain to boost cybersecurity is anticipated to become one of the key trends in helping customers strengthen their networking infrastructure.
About the Authors:
Jeshin Jayamon is a Research Analyst at Grand View Research, Inc. He has more than 3 years of experience in market research & consulting in the ICT & semiconductor domain. Jeshin’s primary focus is on emerging technologies delivered to various enterprises, multinationals, government agencies, and SMEs across the globe. He has worked on diverse topics, such as blockchain technology, data center security, networking & telecommunication, software-defined data center, bare-metal cloud, wireless sensor network, System in Package (SIP), and machine learning, and among others, that are shaping the ICT industry. He has also contributed toward various industry-specific studies.
Working as a Senior Research Analyst in Information & Communications Technology (ICT) Domain at Grand View Research Inc. since January 2016. Saurabh has experience of working on more than 70 assignments in Financial Technology and Security domain. He has worked extensively on several emerging and ground breaking technologies including Blockchain Technology, Wealth Management Platform, Digital Transformation, Intelligent Building Automation Technologies, and Biometrics Technology. Saurabh is a management consulting professional. He holds Bachelor’s degrees in Engineering a nd an MBA in Finance from Pune University, India.
Anoop is an experienced professional with a demonstrated history of working in the market research industry. He is currently working at Grand View Research in the Information and Communication Technology (ICT) team. He has over 2+ years of experience, supported by specialty in qualitative and quantitative analysis. He has worked across several areas, including end-to-end reports and clients consulting projects. He is skilled in Go-To-Market strategy, industry analysis, in-depth company profiling, value chain & supply chain analysis, and market sizing, among others. He is also versed with topics such as security, automation, and compliance. He holds a Post Graduate Diploma in Management (PGDM) from MIT-School of Business, Pune.