Blockchain Security: Attacks and Defense

1. Blockchain Security: Attacks and
Defense
Prof. Dr. Sonali Patil
Head, Department of Information Technology
Pimpri Chinchwad College of Engineering, Pune

2. Syllabus
• Unit IV - Blockchain Security: Attacks & Defense
Pseudo-anonymity vs. anonymity, Zcash and Zk-SNARKS for anonymity
preservation, attacks on Blockchains: Sybil attacks, selfish mining and 51%
attacks; Advent of Algorand, and Sharding based consensus algorithms to
prevent the attacks.
• Unit VI - Limitations of Block Chain
Myths v/s. Reality of blockchain technology.
Faculty Orientation Program on Honor Course “BLOCKCHAIN TECHNOLOGY", by PCCoER, PUNE. 2

3. Bitcoin Cryptocurrency
 Introduced in :2008
 By: Satoshi Nakamoto
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4. • Have you heard the name “Satoshi Nakamoto”? If you’re into crypto,
you’ve definitely heard about this infamous founder (s) of Bitcoin. Satoshi
Nakamoto is a pseudonym whose identity is still anonymous.
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5. Pseudonymity
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ISTE/AICTE Approved One Week Refresher Course on “BLOCKCHAIN TECHNOLOGIES AND IT'S USES", by MMCOE, PUNE.

6. Anonymity
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ISTE/AICTE Approved One Week Refresher Course on “BLOCKCHAIN TECHNOLOGIES AND IT'S USES", by MMCOE, PUNE.

7. Pseudonymity Vs. Anonymity
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Sr. No. Anonymity Pseudonymity
1 It means that the identity of a person is
unknown and its actions are not trackable
(traceable).
It means that a person’s identity is
unknown, but it is possible to assign
actions to the same person.
2 Anonymity Pseudonymity, however, is a much weaker
form.
3 e.g. Zcash e.g. Bitcoin
4 it is impossible to link any transaction to a
specific person.
all the actions the person made can be
linked to this person.
5 Strong form of Anonymity Weaker Form of Anonymity

8. ZCash
• ZCash (ZEC) is an alt coin with the primary
motive of allowing for completely anonymous
transactions and protecting user privacy as
much as possible using advanced cryptographic
mechanisms.
• Transaction Types ZCash allows for several
different transaction types, each for exchanges
between its two different address types, private
and public (or z-addresses and t-addresses).
Faculty Orientation Program on Honor Course “BLOCKCHAIN TECHNOLOGY", by PCCoER, PUNE. 8

9. zk-SNARK
• Zero-Knowledge Succinct Non-Interactive Argument of Knowledge
(zk-SNARK) refers to a proof construction where one can prove
possession of certain information, e.g. a secret key, without revealing
that information, and without any interaction between the prover and
verifier.
• A zero-knowledge proof must satisfy the following three conditions in
order to be valid:
Completeness: If the statement is true then an honest verifier can be
convinced of it by an honest prover.
Soundness: If the prover is dishonest, they can’t convince the verifier of the
soundness of the statement by lying.
Zero-Knowledge: If the statement is true, the verifier will have no idea what
the statement actually is.
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10. Sybil Attacks
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11. selfish mining and 51% attacks
• Selfish mining is a deceitful mining strategy on proof-of-work
blockchains in which one miner (or a group) mines a block,
withholds it privately, and eventually releases it to surpass the
honest miners’ chains to ‘steal’ the mining rewards.
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12. Advent of Algorand
• Security: It provides military-grade security to network and consensus
protocol levels and prevents hacks/malicious attacks.
• Scalability: The upgraded PPoS algorithm enables the network to scale
thousands and thousands of people and sustain a high throughput rate
without incurring higher costs to users.
• Decentralization: As a decentralized platform, all the decisions will be taken
by the nodes participating in the network. Everyone will have a chance to
be a part of the committee that approves blocks.
Faculty Orientation Program on Honor Course “BLOCKCHAIN TECHNOLOGY", by PCCoER, PUNE. 12

13. Shrading
• Splitting a blockchain into multiple pieces, or shards, and storing
them in different places
• Using sharding, it is possible for nodes to function without having to
maintain all of that data at once
• Transactions will be processes simultaneously and in parallel on each
shard
• Network nodes will process only certain specific operations and not
the all as they were doing in linear model
•
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14. • Sharding works with PoS
• Stakersndealing with different shards of the same blockchain, and
accordingly processing a network transaction
• Shard Sharing: Process through which the information of a shrad is
shared with other nodes
• Scalability
• Processing time
• PoS
• Problem: Security issue
Faculty Orientation Program on Honor Course “BLOCKCHAIN TECHNOLOGY", by PCCoER, PUNE. 14

15. Sharding based, consensus algorithms
• Sharding is one of several popular methods being explored by
developers to increase transactional throughput. Simply stated,
sharding is a way of partitioning to spread out the computational
and storage workload across a peer-to-peer (P2P) network so
that each node isn't responsible for processing the entire
network's transactional load. Instead, each node only maintains
information related to its partition, or shard.
• The information contained in a shard can still be shared among
other nodes, which keeps the ledger decentralized and secure
because everyone can still see all the ledger entries; they
simply don't process and store all the information.
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16. Myths Vs Reality
• BLOCKCHAIN IS A CLOUD-BASED DATABASE
• BLOCKCHAIN IS NOT PREPARED FOR BUSINESS ADOPTION
• EVERY TRANSACTION ON BLOCKCHAIN IS ANONYMOUS
• BLOCKCHAINS ARE 100% SECURE
• ALL BLOCKCHAINS ARE PUBLIC
• BLOCKCHAIN IS EQUAL TO BITCOIN
• BLOCKCHAIN CAN JUST BE USED FOR STRENGTHENING
CRYPTOCURRENCIES LIKE BITCOIN
• BLOCKCHAIN IS THE MOST EFFECTIVE SOLUTION FOR EVERYTHING
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17. Limitations of Blockchain
• Scalability
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18. Thank You!!!
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ISTE/AICTE Approved One Week Refresher Course on “BLOCKCHAIN TECHNOLOGIES AND IT'S USES", by MMCOE, PUNE.