I am interesting on understanding the cyber risk in blockchains. Everyone talks about how secure blockchains are, but how do we assess that? I mean, how do we know that specific Altcoins are as secure as Bitcoin?
Dear Petar Radanliev,
You may want to look at the following info:
https://www.winston.com/en/crypto-law-corner/when-is-a-crypto-asset-a-security-and-why-does-that-matter-part-i.html
https://www.thebalance.com/altcoins-a-basic-guide-391206
https://money.usnews.com/investing/cryptocurrency/articles/bitcoin-vs-altcoins-which-is-the-better-investment
https://www.conyers.com/publications/view/why-is-crypto-so-important-and-should-i-care/
How is cryptocurrency secure?
Digital currencies such as Bitcoin, Ethereum or Dogecoin, are stored in something called a 'wallet', which can be accessed by using your 'private key'—the crypto equivalent of a super-secure password— without which the crypto owner cannot access the currency.
What is the essence of cryptocurrency?
In essence, cryptocurrency is – as blockchain based platforms are meant to be – completely decentralised. As a financial based blockchain, that means it is not governed by any central bank or monetary authority. It is rather maintained by a peer-to-peer community computer network made up of users' machines or “nodes”.
How is crypto secured?
How Secure Is Cryptocurrency? Cryptocurrencies are usually built using blockchain technology. ... It's a fairly complex, technical process, but the result is a digital ledger of cryptocurrency transactions that's hard for hackers to tamper with. In addition, transactions require a two-factor authentication process.
https://www.investopedia.com/tech/explaining-crypto-cryptocurrency/
https://www.avg.com/en/signal/is-bitcoin-safe
In general, cryptographic protocols are analysed via security proofs. To come up with security proof, researchers need to have a detailed report of the underlying cryptographic protocol. Such a protocol is usually written in a form of a white (or research) paper.
Cryptocurrencies like Bitcoin, Ethereum, Cardano have white papers. Researchers have analysed and proven the security of such cryptocurrencies, like this paper: https://eprint.iacr.org/2014/765.pdf
However, there are some cryptocurrencies that provide no white papers (or any technical details). Therefore, it is not easy to analyse them and they should not be trusted (unless fully analysed).
Also, the "risk" in this context can be assessed via various approaches, e.g. by analysing the trust assumption and the underlying mathematical assumptions. For instance, you can think of "the factoring problem" which is believed to be hard to solve, but it may not be that hard in the post-quantum era.
I hope that helps.
Rafael Dean Brown Not yet, probably it would be included in the next version of the proof ;)
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