Blockchains are usually thought to be secure as they are tamperproof. All blockchain activities are transparent and traceable, and that information cannot be altered. As blockchains are also decentralised, there isn’t a single entry point for cybercriminals to access the data stored in them.
However, blockchains are not 100% immune to cyber threats. When blockchain systems connect with the real world, such as third-party applications, there will be vulnerabilities for bad actors to exploit.
Earlier this year, cybercriminals siphoned US$540 million ($742 million) worth of Ethereum and USDC stablecoin from cryptocurrency network Ronin through a successful blockchain bridge hack. A blockchain bridge connects blockchain ecosystems, facilitating communication between blockchains through the transfer of information and assets.
In the case of the Ronin breach, attackers used social engineering to gain access to the private encryption keys used to verify transactions on the network. Since the way those keys were set up to validate transactions was not rigorous enough, it allowed attackers to approve their malicious withdrawals, according to a Wired report in April.
Such cases are on the rise, with Internet company Atlas VPN revealing that blockchain hackers stole nearly US$1.3 billion in 78 hack events throughout 1Q2022. This is a cause for concern as blockchains are increasingly adopted across industries, including banking and healthcare, to simplify data management.
Will De’Ath, chief business development officer of Guardians of the Blockchain (GBC.AI), believes AI can help enhance blockchain security. He shares with DigitalEdge Singapore how AI enables that by making blockchains more dynamic and self-aware.
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How keen are organisations in Asia Pacific (Apac) in adopting blockchain?
Based on our conversations with organisations in Apac, we are seeing a high level of awareness of the benefits that blockchain brings, particularly in the finance sector. Despite this, blockchain adoption in the region does face a few challenges that are largely rooted in the fact that blockchain is a relatively new technology.
Firstly, companies are still struggling to put together an operational roadmap to incorporate blockchain into their existing operating models. This is particularly true for companies with well-established legacy IT systems, as some believe that blockchain technology would require them to fully replace their existing infrastructure.
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Secondly, there is still a large skills gap in deploying blockchain technology. Again, due to the relatively newness of blockchain, many companies struggle to identify and source for professionals with deep experience in this technology.
Lastly, as with any technology, adoption is always driven by senior stakeholders, who tend to rely on past performance metrics. This is why blockchain deployments in certain sectors may not be very extensive.
Why is there a need for greater blockchain security?
One of the biggest drivers shaping the need for greater blockchains security is the evolving deployment and usage of blockchain. To help understand this, I would like to use the metaphor of a fish tank.
Imagine buying a fish tank for a specific type of fish that requires a certain volume of water, a specific level of salinity, and at a certain temperature.
However, over time, the use of this fish tank changes. It starts to hold different types of fish, and the volume, salinity, temperature and other factors begin to change. In the short term, smaller changes may not adversely affect the tank. But over time, these changes will create cumulative damage which, if unchecked, can potentially lead to structural failure.
Similarly, with companies changing how they use their blockchains over time, these changes in use and scale can create flaws that could lead to security issues in the long term.
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How does GBC.AI help businesses better secure their blockchains?
Coming back to our analogy of the fish tank, our solution is an AI-powered pattern recognition and self-healing tool. Essentially, it constantly scans for “damage” in blockchain platforms that is created through the changing use of blockchain and can create “self-healing” solutions.
GBC.AI analyses enormous quantities of data and makes data-driven suggestions and decisions. The algorithms can use verified blockchain data for decision-making. Since both the quantity and quality of data impact the effectiveness of AI decisions, verified data is becoming increasingly important in staying competitive. Machine learning can unleash the value of verified blockchain data for corporations and consumers, enabling decisions that keep them ahead of the competition.
Can you share how receptive organisations in Apac have been towards your solutions?
We have spoken to many organisations in the region, and the ones most keen on our solutions are those that have already adopted blockchain or are planning to do so. Unsurprisingly, these companies are in the Web 3.0 or fintech spaces.
Interestingly, size and maturity don’t play as large of a role in determining how receptive an organisation is. Rather, a much better indicator is their level of understanding of blockchain as a technology and their drive to leverage that technology to transform their business.
We are working closely with Singapore-based IDAXA (International Digital Asset Exchange Association) to further drive the adoption of our blockchain security solutions in Apac. Such strategic partnership allows us to implement a very wide approach, where we can speak with regulators and work with businesses on a case-by-case basis. This gives businesses the confidence that the solutions provided fall within the regulatory requirements, and allows us to explain to regulators some pain-points within the regulatory framework.
What’s next for GBC.AI?
In the modern world, technology is developing so quickly that we have to run very fast just to keep pace. As pioneers in the field of AI for blockchains, we are working hard to provide top-end software solutions for our customers.
We work in different market segments: business-to-consumer, business-to-business and business-to-government. Our retail security product will be live shortly and it will allow retail users to benefit from the advantages our technology provides.
