- As per the latest study by Trail of Bits, recruited by DARPA (Pentagon’s Research Arm), Blockchain is not genuinely decentralized
- Centralizing elements like the movement of 60% Bitcoin traffic via only 3 ISPs make Blockchain hackable
- Pentagon on high alert after Terra Luna collapse in May 2021, looking to forewarn public and big tech companies
- Big tech companies trust blockchain technologies like cryptocurrency, NFTs, and DeFi. Possible vulnerabilities in Blockchain can put an end to their plans.
The real value of a blockchain is in its decentralization feature. After all, Satoshi Nakamoto created the first Blockchain to prevent the control of centralized powers over common people’s assets. Blockchain emerged from peer-to-peer technologies and gained momentum when people realized they could break the hegemony of big tech companies. The stratospheric price rise of Blockchain-based technologies like cryptocurrency and NFTs was due to people’s belief in the power of these new technologies. However, Pentagon’s latest research initiative on Blockchain has poured water on the high hopes of everyday men who are the biggest advocate of crypto-based technologies. The research arm of Pentagon Defense Advanced Research Projects Agency, a.k.a. DARPA, recruited Trail of Bits to investigate Blockchain. Let’s learn more about the investigation in the next section.
Blockchain Investigation by Pentagon
For a long time, the world thought that Blockchains were decentralized. But Pentagon disagrees. As per the US Defense Agency, Blockchains are not what the world believes them to be.
Pentagon’s research arm DARPA recently recruited a security research organization called Trail of Bits to investigate Blockchain. The findings were astonishing!
Trail of Bits investigated two of the most prominent blockchains in the history of crypto – Bitcoin and Ethereum and found many flaws that make them centralized.
According to Trail of Bits, even the most reputed blockchains run outdated software and lack decentralization. Hence, unethical parties can gain control over the system.
As per Trail of Bits, just four entities can disrupt the Bitcoin network, and just two entities can disrupt Ethereum, leading to their downfall.
Nearly 60% of Bitcoin’s traffic moves through only three Internet Service Providers, a cause of concern and a vulnerability exploited by hackers.
Using a Sybil attack, a hacker can flood the mining network and cause an eclipse attack. One such hack was executed by a Russian hacker who rewrote Bitcoin traffic by controlling over 40% of Tor exit nodes.
Pentagon has been on high alert since the Terra Luna crash in May 2022. And it is constantly trying to increase awareness about the fallacies of cryptocurrencies.
Pentagon research forewarns big tech companies like Microsoft and Apple that are increasing the adoption of the metaverse, Web3, NFT, and other blockchain-related offerings.
Possibility of Sybil and Eclipse Attacks Causing Blockchain Hacks in Future
Bitcoin miners have heavily used the Tor web browser for the Dark Net to prevent governmental organizations from eavesdropping on them. Tor-based Bitcoin nodes are nodes that are implemented privately. These nodes utilize the Tor anonymous network and Bitcoin mining activities hidden from prying eyes. But unfortunately for miners and crypto communities, a hacker can easily control Tor exit nodes and rewrite the Bitcoin traffic.
As a Russian hacker has already performed Sybil attacks and controlled over 40% of Tor exit nodes, such an attack is a real possibility on Blockchain. Pentagon’s investigation proves Blockchain is not as safe as developers promote it to be. Therefore, cryptocurrency investors need to understand the risks of investments before putting their money in the market. It is imperative to analyze cryptocurrency whitepapers, and if they are not understandable, it is crucial to take advice from analysts who have no personal interest or connection with Venture Capitalists and project founders.
Trail of Bits (hired by the Pentagon via its Research arm DARPA) discovered that a series of Sybil attacks could lead to an eclipse attack, which can compromise a blockchain by disrupting traffic. All this points to a lack of decentralization in the blockchains, which we believe to be completely decentralized. These attacks would not have been possible if the blockchains had been entirely decentralized. But a Russian hacker has already shown the possibilities of such attacks by controlling over 40% of Tor exit nodes. With this research, Pentagon wants to alert people and big tech companies about the fragilities of Blockchain technologies such as NFTs, DeFi, and cryptocurrencies.
Also Read: CRYPTO SCAMS: 5 checks to Spot, Avoid, and Protect