As the crypto business continues to grow and become a more enticing target for hackers, the Pentagon commissioned research that uncovered a number of worrying weaknesses, which are explained in the accompanying report.
In fact, research titled “Are Blockchains Decentralized?” was released on June 21. A study titled “Unintended Centralities in Distributed Ledgers” found that “a fraction of members may acquire excessively centralised control over the whole system.”
The research, which centres on Bitcoin (BTC) and Ethereum (ETH), was performed by the security research company Trail of Bits under the guidance of the Defense Advanced Research Projects Agency of the United States Department of Defense.
As stated in the report: The number of organisations capable of disrupting a blockchain is quite small: four for Bitcoin, two for Ethereum, and less than a dozen for the vast majority of PoS networks.
60% of Bitcoin traffic is routed via only three ISPs
In addition, the survey said that 60 percent of Bitcoin traffic passes via just three internet service providers. In addition, “the great majority of Bitcoin nodes do not seem to engage in mining, and node operators are not punished explicitly for dishonesty.”
According to the experts, “deploying a new node takes just one low-cost cloud server instance; no specialist mining equipment is required.” In what is known as a Sybil attack, this allows for the potential flooding of a blockchain’s consensus network with new, malicious nodes dominated by a single entity.
In addition, the network is vulnerable to assaults due to out-of-date protocols and unencrypted software. As the paper describes,
“The safety of a blockchain is contingent upon the security of the software and protocols underlying its off-chain governance or consensus processes.”