Between , seven Iranians working on behalf of the Iranian government conducted planned cybercrimes against nearly 50 financial institutions in the US sector. The crimes, conducted using botnets and other malicious computer code, were comprised of strategically planned Denial-of-Service (DDoS) attacks. The DDoS attacks overwhelmed servers by flooding targeted systems with redundant requests, causing access to be denied to legitimate users and costing US financial institutions tens of millions of dollars.
As the world becomes more reliant on computer systems, cybersecurity threats are becoming a primary concern for governments. According to The Depository Trust and Clearing Corporation (DTCC), cyber risk tops the current list of threats to the global financial industry. As a result, large banks spend millions of dollars on defending their computer networks from threats like data breaches and DDoS attacks. However, as outdated tools become less able to combat these hazards every day, the financial sector may find solutions in blockchain technology, which offers enhanced network security, streamlines processes, and can prevent costly breeches.
A blockchain has the ability to autonomously house data, which makes for a more robust security base by mitigating the risk that fraud and double spending will occur over the network. Because blockchain activity is tracked on a public ledger that relies on immutability, confidentiality, and integrity, the technology is an appealing option for those aiming to secure their assets.
Current Domain Name System (DNS) protocols set the standard for how computers exchange files and data over the internet and private networks. In a nutshell, DNS servers function as the phone book for the internet by maintaining a directory of domain names and translating them to IP addresses. However, DNS servers are vulnerable to malware and can direct users to counterfeit websites that may cache the user’s private data. The blockchain doesn’t rely on central servers, therefore has no need for DNS protocols.
Nebulis is a decentralized directory that uses the Ethereum blockchain for domain name verification and IPFS (a peer-to-peer hypermedia protocol that streamlines web use) for storage and transfers. According to their website, “The Nebulis directory has minimal reliance on caching, so users can query the canonical blockchain record without imposing excess costs or traffic on the system.” This is an important characteristic to consider, as high frequency requests are fundamental to sophisticated and well planned DDoS attacks. Blockchain solutions like Nebulis can help prevent these types of attacks by offering a decentralized storage/transfer layer that can replace existing protocols, such as Hypertext Transfer Protocol (HTTP) and DNS.
The blockchain can also assist with system integrity and help prevent malware attacks. Malware remains a prominent threat to enterprise systems, as it comes in many forms and usually installs itself covertly onto the victim’s computer. Trojan Horses, viruses, ransomware, and rootkits are some of the most common malware types. Companies like Acronis have responded with Acronis Notary, a storage and data protection software solution. Acronis allows for real-time active protection against malware by using time-stamped hashing or fingerprinting of data. The hashing algorithm is one-way and provides each file its own unique cryptographic signature. This signature can then be verified for integrity by comparing the resulting hash with the original signature.
World leaders and financial institutions are recognizing the potential that the fledgling technology can offer, and have begun implementing full scale operations in order to demonstrate the technology’s abilities. The EU is considering conducting stress tests that test their banks’ defenses against cyber-attacks. Moreover, the European Union Agency for Network and Information Security (ENISA) just released an analytical report that identifies security benefits, threats, and good practices that the blockchain can bring. This supports the claim that fintech industry professionals are maintaining an optimistic attitude toward the blockchain as a potential industry disruptor. It’s a technology that, once adopted on a mass scale, will turn the financial sector upside down and revolutionize the IT industry completely.