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Towards Secure Blockchains

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Towards Secure Blockchains Towards Secure Blockchains Concepts, Requirements, Assessments | EDITORIAL Editorial Blockchain is currently one of the most widely Consequently, the analysis on the following discussed topics in the area of information pages presents blockchain technology in detail technology. This technology for distributed data and extensively studies its aspects relevant to IT storage originated from the cryptocurrency security. It also assesses to what extent blockchain Bitcoin, which became famous especially due to technology is able to achieve the security prop- the record highs its market value attained in 2017. erties ascribed to it and how it may be evaluated Based on its promise of preventing manipulation within the current legal framework. of data on a purely technical level using its decen- tralised structure, offering maximum transpar- This document thus supports developers and ency and replacing intermediaries within business potential users of blockchain solutions in per- processes, many ideas for applying blockchain forming a well-founded assessment of risks technology in fairly different areas have been and in taking IT security into account from the developed in recent years. start. Furthermore, the dynamic development of blockchain technology offers the possibility Politics has also increasingly taken up blockchain of using the results of this analysis as a basis for technology. For instance, the term blockchain is future discussions on both the national and inter- used several times within the coalition agreement national level. With blockchain—as with other of the 19th election period of the German parlia- topics in IT security—the BSI thus strives to shape ment dating from 2018, and the German federal information security for government, business government has set itself the target of developing and society. a comprehensive blockchain strategy until sum- mer 2019. I wish you an insightful reading experience. As with many topics receiving high attention by the media, it is important to take into account the technical foundations when discussing block- chain. In particular, this holds for IT security, since one often hopes to increase security by using blockchain. However, numerous incidents, which have caused damages in the millions, show that the mere use of blockchain does not imply that one can forgo measures for establishing IT security. As a first step for pointing out the basic issues in this area, the Federal Office for Information Security (BSI) published a list of key points in February 2018. As a result of numerous Arne Schönbohm, president of the Federal discussions with different stakeholders offering Office for Information Security (BSI) blockchain solutions or considering their use, the BSI found a more in-depth analysis of the security features of blockchain was required. Arne Schönbohm 1 | EXecUTIVE SUMMARY Executive Summary Blockchain is a new technology for data man- may for instance concern external interfaces for agement which achieves the greatest possible entering and reading out data. Concrete incidents independence from a central party using dis- bear witness to the fact that the possibilities for tributed storage of data in combination with attacks are not only theoretical. cryptographic routines and additional technical measures. On the one hand, this serves to make It is important to note that blockchain technology targeted manipulations significantly harder. On exhibits a wide array of designs. Features often the other hand, this feature of blockchains gave used for classification include the visibility of data rise to proposals for their use in different appli- (reading permissions) as well as the updatability cations in which several parties of conflicting (writing permissions) of the blockchain. However, interests are involved and cannot agree on a a number of approaches, which may strongly central party controlling the application. In other differ among each other, likewise exist for con- applications which do feature a central party, the sensus mechanisms and smart contracts. They use of blockchains was proposed for improving correlate with the basic design of a blockchain efficiency by making parties interact directly with to some extent, but also offer further degrees of each other. freedom. If blockchain is to be used in a concrete application, it is hence necessary to carefully Due to the expectations associated with block- analyse which design is most suitable. The design chain technology, it has currently become a hot of Bitcoin, which receives most attention in the topic intensely studied by a plethora of parties media, will probably not be reasonable for most from science, business and administration. Use applications. of the technology is being discussed and studied in many areas. At the present time, the only area In the area of consensus mechanisms, the to practically employ blockchains to a somewhat algorithm proof-of-work is predominant in larger extent though is that of finance, in particu- public discussion. Proof-of-work is used among lar cryptocurrencies. others by Bitcoin and criticised in particular for its enormous energy consumption. The algorithm In this document, the BSI studies blockchains allows keeping data consistent in a setting primarily from the point of view of IT security, without authentication of individual parties but also considers further implications of the while at the same time preventing manipulations. basic technical design, e.g. on efficiency or com- What often goes unnoticed is the fact that pliance with requirements from data protection. blockchains managing permissions more strictly In general, blockchains offer benefits as compared and authenticating individual parties, which seem to databases in terms of availability and resilience to be necessary for many applications, allow using against misuse, whereas they show disadvantages so-called message-based consensus mechanisms, in terms of confidentiality and efficiency. which are significantly more efficient and well- studied. The mere use of blockchain does not solve IT security problems. On the contrary, well-known Several blockchain systems allow using smart problems like hardware and software security contracts, which aim to make possible the tam- continue to exist. In addition, new attack vectors per-proof execution of contracts between parties targeting different components of the system unknown to or mistrusting each other. Smart arise. Besides consensus mechanisms, which contracts are not equivalent to legal contracts ensure consistency of the distributed data cop- though, and many contractual concepts cannot ies, and smart contracts, which allow executing be represented via a smart contract. In addition, programs within the blockchain network, attacks analyses of existing contracts revealed a large 2 | EXecUTIVE SUMMARY number of security problems. They range from Legal questions concerning blockchains result bugs in the code—which cannot be corrected for among other things from the lack of a central, technological reasons—and manipulable random legally responsible party during normal opera- numbers to a lack of authenticity for data which tion, which has various implications. This topic is is entered from the real world and processed in currently the subject of controversial discussion. the contract. In order to handle smart contracts Problems connected to data protection, like the responsibly, it is imperative that these limitations implementation of requirements as defined in the and vulnerabilities be taken into account. General Data Protection Regulation (GDPR), arise from the transparency and tamper resistance of Since the security of blockchains strongly relies blockchains, which are among their main features. on the cryptographic algorithms used, these Such problems are also intensely studied at the algorithms have to be carefully selected in order moment. to attain the desired security level with respect to the security goals integrity, authenticity and con- Extensive and creative research projects targeting fidentiality. For detailed recommendations, the a broad range of technical limitations and prob- reader is referred to several Technical Guidelines lems of blockchain technology are being con- published by the BSI and cited in the text. Most ducted at present. Current research topics include stakeholders in the area of blockchain have paid e.g. scalability, efficiency, pseudonymity and hardly any attention to long-term security of data confidentiality. At the moment it is not possible so far. In order to protect sensitive data for the to estimate when and if significant improvements long term, it is necessary to have at one’s disposal may result from these projects. measures for replacing cryptographic algorithms which are no longer secure. When doing so, it is A further issue to be noted is the lack of stand- imperative to bear in mind that replacing cryp- ards in the blockchain area. This leads to incom- tographic routines does not automatically pre- patibility among different blockchains and to serve the original security properties for old data. a quite confusing plethora of solutions, which Besides cryptographic routines, the security prop- make choosing a concrete product for the longer erties of consensus mechanisms likewise need to term difficult for users. Regarding IT security, the be well-understood and taken into account. These BSI provides the document at hand as a deci- aspects should hence be considered from the start sion-making aid and as a well-founded
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