79. Typical vulnerabilities and bridge security in blockchain technology
Blockchain technology, which was created as the basis for cryptocurrencies, has evolved and is used in various sectors of the economy. One of the key elements that enable interoperability and collaboration between different blockchains are so-called bridges.
These bridges are critical elements in the blockchain ecosystem and their security is crucial for the integrity and reliability of the entire system. In this article, we will analyse typical security vulnerabilities of blockchain bridges and present strategies to effectively secure them.
What are blockchain bridges?
A blockchain bridge is a mechanism that connects two independent blockchains. Its purpose is to facilitate communication between them. For example, if you want to settle Bitcoin and use decentralised financial services (DeFi) on the Ethereum network, the corresponding blockchain bridge allows you to do so without having to sell your Bitcoin.
Bridges play a hugely important role in the entire blockchain ecosystem. They are essential for establishing interoperability between different blockchains. They work by utilising a variety of validation processes both on-chain and off-chain, which makes them vulnerable to various types of security breaches.
In practise, bridges store tokens that a user wants to transfer between different chains. Typically, bridges are implemented as smart contracts and accumulate a significant number of tokens as cross-chain transfers increase, making them an attractive target for potential hackers.
In addition, blockchain bridges offer further attack opportunities due to their complex structure involving multiple components. Therefore, fraudsters are highly motivated to target cross-chain applications to loot significant sums of money.
Bridge security in the blockchain ecosystem is therefore of enormous importance.
Typical vulnerabilities in bridge security
- 51% Attacks are one of the biggest threats to blockchain security. In the case of bridges, such an attack can lead to the majority of the nodes operating the bridge being controlled, resulting in manipulation of the transmitted data. To counter this threat, consensus mechanisms that are resistant to such attacks must be used.
- Vulnerabilities in smart contracts. Bridges often use smart contracts to transfer information between different blockchains. However, flaws in the code of smart contracts can lead to security vulnerabilities that allow attackers to take control of the bridge. Regular security checks of the contract code are therefore essential.
- Exploitation of oracles. Blockchain bridges often use oracles or oracles for external information to obtain data outside the blockchain. Attacks on oracles can lead to manipulation of the transmitted data, which in turn affects the state of the contract on the other chain. Verification of oracle data and the use of decentralised data sources are key to ensuring security.
- Insufficient or too little on-chain verification. The process of on-chain verification, especially for bridges dedicated to specific dApps, is usually minimised. For these bridges, the execution of basic operations is performed by centralised backends. All other verifications are performed off-chain. This approach to bridges can lead to gaps that are very likely to be exploited by hackers.
Security vulnerabilities in blockchain bridges
First and foremost, the implementation of multilevel security that includes both the protocol layer and the application layer is crucial. The use of consensus algorithms such as PoW (Proof of Work) or PoS (Proof of Stake), and regular software updates help minimize the risk of 51% attacks.
Ensure the security of smart contracts. Regular security audits of intelligent contracts code are essential to detect and fix potential vulnerabilities. Using the latest programming standards, such as Solidity, and using secure design patterns are key to minimizing risk.
Decentralized data sources when using expectation. The use of decentralized data sources is recommended to protect against attacks on oracles. Using multiple oracles from different sources increases resistance to information manipulation and minimizes the risk of data errors.
Finally, education and awareness. Training the teams responsible for developing, maintaining and managing blockchain bridges is crucial. Awareness of the latest threats and security practices will allow teams to respond quickly to potential threats.
Summary
Securing blockchain bridges is a complex task that requires multiple security measures. A combination of layered security measures, code audits, the use of oracles and continuous education is key to maintaining integrity and security in the blockchain ecosystem.
Continuous improvement of security protocols and practises is critical given the dynamic nature of cyber threats.