Blockchain holds the potential to eradicate cybercrime risks

The annual losses due to cybercrime continue to rise, and although blockchain technology may not be a foolproof solution, its mainstream adoption could make a significant difference, according to experts. Cybercrime takes various forms, including ransomware attacks, identity fraud, data theft, and phishing campaigns. Cybersecurity Ventures predicts that global cybercrime losses will reach $10.5 trillion annually by 2025. Blockchain technology, which was introduced with the launch of Bitcoin in 2009, incorporates security features such as cryptography, decentralization, and consensus. Ronghui Gu, co-founder of CertiK, a blockchain security firm, believes that industries heavily reliant on data integrity, such as healthcare and finance, could greatly benefit from blockchain’s security capabilities. Companies are already exploring the use of blockchain for storing and managing medical records, with some even releasing COVID-19 medical certificates on the blockchain. Gu explains that the centralized nature of standard data storage systems makes them attractive targets for cyber attackers, and current systems often lack mechanisms for individuals to verify the use of their data. Blockchain and Web3 technologies address these issues by decentralizing data storage and reducing the risk of centralized points of failure and unauthorized access. CertiK’s annual Web3 Security Report for 2023 found that over $1.8 billion in digital assets was lost across 751 Web3 security incidents that year. Gu acknowledges that blockchain is not immune to cyberattacks, but its decentralized nature provides stronger security. Changing a distributed ledger would require control of over half of all machines, making it nearly impossible to alter data once entered. Investment scams and business email compromise were the top cybercrime losses in the United States last year, according to Statista. Gu suggests that the use of smart contracts could help reduce the success of these cyberattacks. Smart contracts automatically execute actions based on predefined conditions, reducing the risk of fraud in the financial industry and automating compliance tasks. Gu emphasizes that completely eliminating cybercrime is not realistically achievable, as the field of cybersecurity is constantly evolving. He believes that the goal should be to minimize cybercrime and mitigate its impacts through resilient infrastructures and informed users. Johann Polecsak, co-founder and CTO of QANplatform, agrees that blockchain is not a one-stop solution for all cyberattacks but can enhance security in specific fields. Quantum computing is a potential threat to blockchain encryption, as it could result in large-scale theft of user funds if it can break blockchain encryption. Eskil Tsu, co-founder of GoPlus, states that blockchain’s properties of decentralization, transparency, and immutability can significantly reduce risks and the surface for online attacks. Fraser Edwards, CEO of Cheqd, believes that blockchain technology has many opportunities to prevent cyberattacks, especially phishing and impersonation scams. Phishing remains the most common email attack method, accounting for 43.3% of all email threats, according to Hornetsecurity. Edwards suggests that decentralized identity and credentials, which often utilize blockchain, can have a significant impact on reducing cyberattacks. He also believes that blockchain technology could address emerging scams and cyber threats, including those involving artificial intelligence. Deepfakes, in particular, have raised concerns as AI video technology can create highly realistic computer-generated images and voices. Edwards states that blockchain technology could prevent these types of cybercrimes by implementing decentralized identifiers (DIDs) and credentials that require authentication through a correct signature. This would prevent the generation of fraudulent documents and videos. In summary, while blockchain technology may not be a silver bullet against cybercrime, its adoption in mainstream industries could enhance security and mitigate the risks associated with centralized data storage and cyberattacks.