Cryptocurrency is a kind of digital or virtual currency that is designed with the objective of using them as a medium to exchange. Cryptocurrencies use cryptography in the attempt to safeguard and verify the transactions. Cryptography is also used to create new currencies as well (Ghiglieri & Waidner, 2016). However it is necessary to mention that they are limited to specific number of entries in the database which cannot be changed unless specific conditions are fulfilled. Despite of constant effort to create such digital currencies for last couple of years, it has become possible to create crypto currencies in 2009. The developers described cryptocurrencies as a form of peer-to-peer electronic cash system. The cryptocurrencies are strictly decentralised and it does not involve a single server that has the authority over the currencies. It is quite similar to peer-to-peer file sharing system. In case of cyptocurrencies, the participants need to perform their individual responsibilities (Kühn & Dormann, 2012). Public ledgers of the different transactions that happened within the network are available to everyone and are done via Blockchain. As a result everyone in the network is able to visualize each other’s account. Every transaction can be described as a file, which consists of the sender’s and recipient’s public keys and the exact sum of coins that is transferred. The transaction also requires signature of the sender with their respective private key. Every transaction of cryptocurrency is broadcasted publicly, but it requires confirmation in the first stage. In the recent times cryptocurrency has witnessed a major boost and is being widely used across the world due to its ease of use. However it faces major threats of different kinds. The common identified threats faced while using cryptocurrencies are double spending, mining pool attacks, client side security threats, network attacks using DDoS and practical attack incidents. This study involves understanding the common threats faced by cryptocurrencies.
In case of cryptocurrencies a specific sum of currencies spent for one purpose cannot be used elsewhere. However it can be spent if it is stolen. The popular cryptocurrenices that are being used nowadays can be copied and spent at other places without the owners knowing about the theft of the coins. When explained in a simple way it can be said that while purchasing an item with the use of cryptocurrencies, the users can pay for the specific item. The seller gets the payment confirmation hands over the item to the buyer. However, the seller won’t be able to use that currency elsewhere. If the seller tries to use the currency at some other place, the transaction will be rejected because the currency has been registered in the name of the buyer. However, if someone is able to steal the currency, then it is possible to spend it elsewhere (Mougayar, 2016). By stealing the thief is registering the currency to his individual name. The process of stealing is based on deception. The attacker uses the privately mined blocks to perform a new double spending attack on the cryptocurrencies.
The cryptocurrency exchange is a digital marketplace where the traders are able to buy, sell or exchange currencies (Lee, 2015). At this position the dishonest client or the thief withholds predetermined blocks that contain transactions which implement specific deposits. The dishonest client waits for the next set announcement and quickly sends pre-mined block with recently mined blocks directly to the exchange and towards the nearby peers with the expectation that the exchange or some nearby miners will consider the block chain consisting of the pre-mined currencies as the block of currencies. The attacker then rapidly sends another transaction which requests for a withdrawal from the exchange of the same coins that were deposited by the attacker in the previous transaction. In order to overcome this problem, the different cryptocurrency operators are implementing a confirmation mechanism in order to prevent this problem. Cryptocurrency operators maintain a universal ledger similar to traditional cash monetary system to prevent any kind of forgery and theft (Burniske & Tatar, 2017). Block chain maintains a chronological order that has time stamped ledger from the beginning from the start. The starting time is considered to be the year 2009. In order to prevent any forgery, if a cryptocurrency user resends a certain currency twice to two different merchants then the currency will be get disapproved by the second merchant.
Another quite common and recently identified form of attack is the mining pool attack. Mining pools can be created in the attempt to increase the computing power. Therefore it helps to increase the chances of winning the mining reward. In general the mining pools are controlled by the mining managers who forward unsolved work units to pool members. The miners are responsible for the creation of partial proof of works and full proofs of work and submit them to the managers as shares. The moment a miner discovers a new form of block, it is submitted to managers with the full proofs of works. In the current times the number of attack vectors which exploit the vulnerability in pool based mining based have increased by a great deal. Groups of dishonest miners can perform both internal as well as external attacks on mining pools (Judmayer, Stifter, Krombholz & Weippl, 2017). Internal attacks are those in which miners act corruptly within the pool to collect more than their fair share of the collective reward or disrupt the functionality of the pool to take it further from the successful mining attempts. There are no definite forms of prevention techniques that can prevent such activities. The only way to prevent such type of attack is to identify the culprits and bring them justice following the cybercrime laws.
The immense growth of popularity of cryptocurrency has encouraged large number new users to use it. Cryptocurrency relies greatly upon elliptic curve cryptography for securing the transactions. In order to secure the transaction, the currency providers implement the pay-to-pubkeyhash transaction script in order to provide a public key and signature for proving the ownership (Cryptocurrencies, 2015). In order to generate signature the user needs to choose per signature random value that should be kept a secret. Repetition of per signature value risks the private key computation. In case of most online transactions, the payment mostly relies on the login details. But cryptocurrencies rely upon cryptography. As a result there is a constant issue of secure storage and management of the user keys. It has become quite easy for the hackers to implement brute force hacking and steal currencies from the user accounts.
Blockchain is not a digital currency, but an electronic payment system, which is based on cryptography. This currency does not have all the attributes of digital currency; therefore, it does not work as a replacement of fiat or traditional currency. The block discarding attach is a severe attack in which the information in concealed in a very selective manner which is revealed later on time. Bit-coin is based on self-interest and the miners get the maximum benefit from it. The block discarding attack have a variable, which stands for network superiority and they influence the network miners to influence the honest miners. The block withholding attack can be prevented if the pool managers can trust the pool participants.
Block discarding attack is also common these days. The attack is based on the assumption that the attacker can achieve network superiority by maintaining a direct network connection much above the average single user. When two blocks are released at the same time, the one block that gets propagated has the maximum chance to be approved. In order to propagate a certain block faster, different attackers implement different tactics. In order to propagate a certain block faster, the attackers try to slow down the other block. As a result a specific block gets transferred much earlier (Sanford Martha., 2015). This can be done by implanting popups and extensions in the computers of users who use cryptocurrencies. This can be prevented when the users are careful and restrain themselves from opening malicious websites that might pose threat to the personal computers.
Conclusion
It is evident that with the gain in popularity of different kinds of cryptocurrencies, it has become quite an issue to prevent the attackers from stealing the currencies. Since the currencies are dependent entirely on cryptography, therefore there is a great possibility that they can be decrypted and stolen. Therefore it is necessary to plan techniques by which such decryption and thefts can be prevented. This study helped to understand how different kinds of threats act on cryptocurrencies and the ways to prevent them from affecting the exchanges.
References
Burniske, C., & Tatar, J. (2017). Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond. McGraw Hill Professional.
Ghiglieri, M., & Waidner, M. (2016). HbbTV Security and Privacy: Issues and Challenges. IEEE Security & Privacy, 14(3), 61-67. https://dx.doi.org/10.1109/msp.2016.54
Judmayer, A., Stifter, N., Krombholz, K., & Weippl, E. (2017). Blocks and chains. Morgan & Claypool Publishers.
Kühn, I., & Dormann, C. (2012). Less than eight (and a half) misconceptions of spatial analysis. Journal Of Biogeography, 39(5), 995-998. https://dx.doi.org/10.1111/j.1365-2699.2012.02707.x
Lee, D. (2015). Handbook of digital currency. Academic Press.
Mougayar, W. (2016). The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology. John Wiley & Sons.
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