The document discusses blockchain technology, explaining its features such as distributed ledgers, smart contracts, and its relationship to cryptocurrencies like Bitcoin, while highlighting its benefits and challenges. It also covers notable cybersecurity breaches, the impact of cyber attacks on organizations, and the importance of vulnerability assessments and penetration testing. The text notes the increasing relevance of cybersecurity measures in protecting against potential threats and outlines common social engineering attacks.

1. Blockchain
&
Cybersecurity
Presented by
Jason R. Cope

3. What Is Blockchain?
A technology that:
• Permits transactions to be gathered into
blocks and recorded
• Cryptographically chains blocks in
chronological order creating a “Trustless
system”
• Allows the resulting ledger to be
accessed by different servers (i.e. a
distributed ledger)

4. What Is A Distributed Ledger?
Centralized
Ledger
Distributed Ledger
• There are multiple ledgers, but Bank holds the
“Master Copy”
• Each client must reconcile its own ledger against that
of the Bank, and must convince Bank of the “true
state” of the Bank ledger if discrepancies arise
• There is one ledger. All Nodes have some level of
access to that ledger.
• All Nodes agree to a protocol that determines the
“true state” of the ledger at any point in time. The
application of this protocol is sometimes called
“achieving consensus”

5. Trustless System?
• Doesn’t mean it’s a system you can’t
trust
• No trust is required between participants
in a transaction
• How is this accomplished?
– Data is mined into blocks
– Together these blocks form a chain
– Each block in the chain includes data from
the previous block
– The resulting “blockchain” is a ledger of
transactions that automatically verifies itself

6. How Does It Work?

7. Using Blockchains
Smart contracts
• Flexible mechanism that serves as the
middleman for all manner of agreements
and data exchanges
– Identity management
– Voting
– Digital rights management
– Supply chain management
– Point-of-sale applications
– Healthcare
– Currency exchange
– Ride sharing

8. How Is Blockchain
Related To Bitcoin?
•Blockchain enables the existence of
cryptocurrency
•There are more than 1,600
cryptocurrencies today
•Bitcoin is the name of the best-know
cryptocurrency
•Facebook is actively working on creating a
cryptocurrency

9. Cryptocurrency
Benefits and Issues
Benefits:
• Offers cheaper and faster peer-to-peer
payment options
• No need to provide personal details
• Gaining acceptance as a payment option
Issues:
• Price volatility
– Less buying and selling of goods and
services
– More speculative trading of the currency
itself

10. Benefits of Blockchain
• Increased transparency
• Accurate tracking
• Permanent unmodifiable ledger
• Cost reduction

11. Blockchain Unknowns
• Complex technology
• Regulatory implications
• Implementation challenges
• Competing platforms
• Cybersecurity

12. CYBERSECURITY

14. Notable Breaches
• Target (2013)
– 110 million customers credit/debit card
information compromised
– Hackers gained access through a third-party
HVAC vendor to the point-of-sale card readers
– Cost the company $18.5 million, plus
additional compliance requirements

15. Notable Breaches
• Uber (2016)
– 57 million Uber users and 600 thousand
drivers personal information exposed
– Uber failed to disclose the breach for more
than one year
– Paid the hackers a “bug bounty” fee of $100
thousand to destroy the data with no way to
verify the destruction occurred
– Valuation dropped from $68 billion to $48
billion

16. Notable Breaches
• Equifax (2017)
– Personal information (including Social Security
Numbers, birthdates, addresses, drivers’ license
numbers) of 143 million consumers compromised
– Caused by a website application vulnerability;
using old outdated systems
– Setup a dedicated website to take care of
consumers
– Provided free credit monitoring for one year for all
consumers affected
– Cost the Company $700 million after reaching a
settlement with the government

17. Notable Breaches
• Capital One (July 30, 2019)
– Personal information of 100 million
consumers compromised (names, addresses,
phone numbers, email addresses, dates of
birth, annual income disclosures)
– Outside individual gained access to the
network by exploiting a misconfigured web
application firewall
– Will provide free credit monitoring for one year
for all consumers affected

18. Local Incidents
• Texas Lawbook survey states four out of five
law firms operating in Texas in 2017 and
2018 were victimized by a cyber attack.
• 40% of small and mid-sized companies that
experience data breaches are out of business
within six months.
• Smaller businesses that devote fewer
resources to cybersecurity end up with
information that is more accessible to cyber
attacks

19. Vulnerability Assessment
• Intended to identify and assign a criticality
rating to potential security weaknesses in
an organization’s technical environment,
but not to exploit the weaknesses
• External
• Internal

20. Vulnerability Assessment
• External
– Checks for vulnerabilities between the
external network and the internet.
• Internal
– In-depth analysis of the organization’s internal
network.
– Estimated that approximately 80% of security
breaches occur from inside the internal
network.

21. Vulnerability Assessment
• Deliverables
– Technical vulnerability assessment report
– Recommendations for remediation

22. Penetration Testing
• Identifies the ease and likelihood with
which a malicious attacker could
compromise the target environment
• Finds weaknesses in the target
environment and attempts to exploit them.

23. Social Engineering Assessmen
• Consist of various methods to determine
susceptibility to common people-based
attacks to obtain credentials, convince
users to circumvent security controls,
install unauthorized software, disclose
sensitive information, or enable assess to
unauthorized areas.
• Focus is on humans rather than
weaknesses in the IT infrastructure.

24. Social Engineering Assessmen
• Common scams:
– Phishing
– Ransomware
– Media drops
– Tailgating

26. CONTACT US
Jason R. Cope
Goldin Peiser & Peiser, LLP
(214) 635-2508
Jcope@GPPcpa.com