The InfoSec implications of using a blockchain rather than a centralized database to store inter-company information.

1. Information security in
private blockchains
Dr Gideon Greenspan, Founder and CEO

2. Overview
• Blockchain databases
• Internal risks
• External risks
• Mitigation strategies
• Summary

3. Centralized databases
ClientServer
Client
Request

4. Blockchain databases
Node
Node
Node
NodeTransaction
Block

5. Blockchain databases
Node
Node
Node
NodeTransaction
Block
Blockchain
Consensus created
by validator nodes

6. Ledgers in regular databases
Account number Balance
04823872 £ 229.94
20956298 £ 431.05
38103749 £ 183.67

7. Ledgers in blockchains
Public key hash Balance
13B9cMd5Ch9fu6qU4
94gHTfAPFQfq3ZSGx
£ 229.94
1FRZvSBc1cRFbmwbz
NhhaQTyRJXRujN2Sq
£ 431.05
1HDxhfeoSQmVNzTnZ
RLe2Z6nJ1LLAuGWpa
£ 183.67

8. Ledgers in blockchains
Public key hash Balance
13B9cMd5Ch9fu6qU4
94gHTfAPFQfq3ZSGx
£ 229.94
1FRZvSBc1cRFbmwbz
NhhaQTyRJXRujN2Sq
£ 146.83
1FRZvSBc1cRFbmwbz
NhhaQTyRJXRujN2Sq
£ 284.22
Multiple entries for one account ⇒
concurrent distributed transactions

9. Internal risks: regular node
• What can a bad regular node do?
⤫ Spend somebody else’s money
⤫ Create more money
⤫ Spend own money twice
⤫ Flood the network (denial of service)
⤫ Censor transactions
• Why are we so confident?
ü 7 years of bitcoin history

10. Internal risks: validator node
• What can a bad validator node do?
⤫ Spend somebody else’s money
⤫ Create more money
⤫ Spend own money twice
⤫ Flood the network (denial of service)
⤫ Censor transactions
ü Delay transaction confirmation
ü Resolve conflicts with bias

11. Internal risks: validator majority
• What can a bad validator majority do?
⤫ Spend somebody else’s money
⤫ Create more money
⤫ Spend own money twice
⤫ Flood the network (denial of service)
ü Censor transactions
ü Delay transaction confirmation
ü Resolve conflicts with bias

12. External risks: network violation
⤫ Denial of service
– Peer-to-peer resilience
⤫ Wiretapping
– Handshaking with digital signatures
– Extend to encrypted communication
⤫ Spoofing / Man-in-the-middle
– Impossible without key compromise
– Transaction source irrelevant anyway

13. External risks: host violation
Blockchain
node
Centralized
client
Centralized
server
Read mine ✓︎ ✓ ✓︎︎
Read all ✓ ✕ ✓︎
Write mine ✓ ✓ ✓
Write all ✕ ✕ ✓

14. Mitigation: Cold storage
• Offline “cold” private key (air gapped)
– Most funds stored in cold address
– Refill “hot” address as necessary
http://bitcoingarden.tk/trezor-the-
hardware-bitcoin-wallet/

15. Mitigation: Multisignature
• Lock funds under n different keys
– Stored on different nodes/devices
• Require m of those keys to spend
– Special type of ledger entry
• Variations:
– 1 of 2 for key loss
– 2 of 2 for host security
– 2 of 3 for escrow

16. Blockchain security: summary
Confidentiality ▼
Integrity ▲
Availability ▲
*
* Watch: zero-knowledge proofs