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Blockchain for Cybersecurity: Pros and Cons, Trending Use Cases

Can a blockchain strengthen the security of your solutions? The potential blockchain technology has for securing data, communications, and entire systems is promising. However, cybersecurity capabilities of the blockchain come at a certain price.

In this article, we take a closer look at the fundamentals of blockchain security and analyze the possible impact of the blockchain on the cybersecurity of different solutions. We also overview key industries that already use the blockchain for cybersecurity.

Basics of blockchain technology

What is a blockchain?

A blockchain is a decentralized ledger that contains data about all transactions performed across a peer-to-peer network. Transactions are recorded by time and grouped into back-linked blocks that are cryptographically secured and organized in chains. The transaction data contained in these blocks is immutable and is considered trusted and secured. Blockchain technology allows all blockchain network users to see any transaction ever made by anyone on the network.

There are three common types of blockchain network architectures:

  • Public architecture with permissionless access — Networks that operate with untrusted members, like Bitcoin and Ethereum
  • Public architecture with permissioned access — Networks that only deal with trusted members, like Ripple
  • Private architecture with permissioned access — Networks that are open only to trusted members of a defined community, like Bankchain and FiberChain

According to Forrester predictions, a permissioned blockchain would be a safer and wiser choice than a permissionless blockchain, as the latter raises too many compliance concerns.

 key elements of blockchain

Companies that want to try working with the blockchain can build a custom private blockchain or use and even partially customize a public blockchain network for their specific needs. In any case, they will be able to leverage key benefits of the blockchain for cybersecurity, which we discuss below.

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The fundamentals of blockchain security

A blockchain is distributed and replicable by nature. It uses the consensus of participants and the latest achievements in cryptography. As a result, blockchain-based solutions are more resistant to cyberattacks than non-blockchain systems.

The security of blockchain technology relies on three fundamental elements:

 pillars of blockchain cybersecurity

Let’s look closer at each of these characteristics:

  • Confidentiality — The blockchain provides extensive capabilities for ensuring a user’s anonymity. User keys are the only link between a user and their data. However, these keys are also easy to anonymize. Some networks also use non-interactive zero-knowledge proofs (zk-SNARK, zk-STARK, and so on) to maximize users’ confidentiality. As a result, while being open and offering rich opportunities for transaction tracking, a blockchain allows users to maintain an unprecedented level of anonymity.
  • Data integrity — Blockchains are designed as ledgers where every block is linked to nearby blocks using cryptographic hash functions. Therefore, once a transaction is recorded on the blockchain, it can’t be altered or deleted. Any changes made to the already recorded data are processed as new transactions.
  • Availability — Having a large number of nodes ensures blockchain resilience even when some nodes are unavailable. And as each node in the network has a copy of the distributed ledger, the correct blockchain remains accessible to other peers even in the case of a compromised node.

Aiming to add all these characteristics to their software products, organizations turn their attention to blockchain-based solutions. However, the technological complexity of blockchain technology raises some concerns regarding its implementation and sustainability. In the next section, we overview the key benefits and drawbacks of using blockchain technology for cybersecurity.

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Using the blockchain for cybersecurity: pros and cons

While the blockchain has rich potential as a cybersecurity measure, this technology is also associated with several risks. Let’s look closer at the key drawbacks of the blockchain that you need to take into account before deciding to strengthen the security of your solution with this technology:

 drawbacks of using blockchain for cybersecurity

Scalability challenges — Blockchain networks have different limits, such as to the block volume and number of transactions processed per second. Therefore, you need to check the scalability of a blockchain platform you want to use as the basis for your solution.

For Bitcoin, these limits are currently 1 MB of data and up to 7 transactions per second (TPS). On the Ethereum network, block generation is limited to 7 to 15 TPS. Other networks, however, claim to have a much higher transaction capacity. For instance, Ontology claims to reach 4,000 to 12,000 TPS, depending on the environment, while the Futurepia network measures up to 300,000 TPS in laboratory testing.

Reliance on private keys — Blockchains rely on the use of private keys: long sequences of random numbers automatically generated by a wallet. Private keys are used for interacting with the blockchain and, in contrast to user passwords, can’t be restored. If a user loses their private key, all data encrypted with it will most likely be impossible to recover.

Adaptability challenges — Though blockchain technology can be applied to almost any business, companies may face difficulties integrating it. It’s quite challenging to employ this technology in supply chain systems, for instance, as it may take much time to re-implement the supply chain logic using a blockchain. Blockchain applications can also require complete replacement of existing systems, so companies should consider this before implementing blockchain technology.

Risk of cyberattacks — Blockchain technology greatly reduces the risk of malicious intervention, but it’s still not a panacea to all cyber threats. The blockchain also has its weak spots, such as node communication (the eclipse attack), consensus mechanisms (51% attack), and code vulnerabilities. If attackers manage to exploit any of these vulnerabilities, it may risk the security of the entire system.

Read also:
Blockchain Attack Vectors: Vulnerabilities of the Most Secure Technology

High operation and customization costs — A blockchain requires substantial computing power and storage capacity. This may lead to higher marginal costs in comparison with existing non-blockchain systems.

Blockchain literacy — Despite the increasing popularity of blockchain solutions, there are still not enough qualified blockchain developers and cryptography experts. Blockchain development requires a large set of skills and rich knowledge of different technologies, programming languages, and tools, including blockchain security testing tools.

Lack of governance — The operation and use of blockchain technology in general and distributed ledgers in particular isn’t well regulated globally. Many countries, including Malta and the US, already have or are working on cryptocurrency regulations. Several states in the US have also established frameworks regulating the legal and business use of blockchains and smart contracts.

These are the main blockchain drawbacks you need to take into account when deciding to implement this technology to improve your product’s cybersecurity. However, the final scope of possible disadvantages will change depending on the industry you operate in and additional tasks you want to solve with the help of the blockchain.

Now let’s take a closer look at the key advantages of using a blockchain for cybersecurity:

  benefits of using blockchain for cybersecurity

Secure data storage and processing — Blockchain records are immutable and any change recorded on the blockchain is transparent and non-removable. Therefore, data stored on a blockchain is protected better than traditional digital or paper-based records.

Safe data transfers — The blockchain enables fast and secure transactions of data and finances. Features like smart contracts allow for automatic execution of agreements between several parties.

No single point of failure — Permissionless blockchain systems are decentralized and, therefore, more resilient than traditional systems. The compromise of a single node won’t affect the operation or security of the whole blockchain. This means that even in the case of DDoS attacks, the system will operate as normal thanks to multiple copies of the ledger. Private blockchains, however, can’t offer you this advantage.

Data transparency and traceability — All transactions on blockchains are digitally signed and time-stamped, so network users can easily trace the history of transactions and track accounts at any historical moment. This feature also allows a company to have valid information about assets or product distribution.

User confidentiality — The confidentiality of blockchain network participants is high due to the public key cryptography that authenticates users. However, some blockchain-based startups go a step further and improve this technology. For instance, Guardtime developed a Keyless Signature Infrastructure (KSI) that allows users to verify their signature validity without disclosing keys.

Increased customer trust — A blockchain offers data privacy and transparency that can help businesses gain customers’ trust. Furthermore, in many of today’s blockchain networks, data owners can be granted full control over their personal data and decide who can access it and when.

Let’s see which industries can benefit the most from improving the cybersecurity of their products with the help of blockchain technology.

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Top blockchain use cases for cybersecurity

Due to its nature, the blockchain offers promising cybersecurity options to startups and enterprises operating in different fields. The list of sectors that can benefit the most from applying the blockchain for cybersecurity includes:

 industries to use blockchain for cybersecurity

Let’s take a closer look at each of these blockchain use cases for cybersecurity.


In the finance sector, the biggest value of a blockchain is in its data immutability and transaction transparency. Storing transactions on the blockchain is more transparent and secure than keeping traditional digital or paper records. Some banking organizations, such as ING Group, use blockchains and, particularly, zero-knowledge range proof solutions to protect the confidentiality of customer information. Q2, a virtual banking platform, uses a blockchain and machine learning to strengthen user data protection.

Smart contracts offered by many blockchain networks allow for automatic execution of agreements between several parties when all conditions of these agreements are met. Common examples of such agreements include pledge agreements and deposits.


The most common examples of blockchain implementation in healthcare are related to securely storing and quickly transferring medical data. For example, BurstIQ is a blockchain-based platform that helps healthcare institutions securely store patient data and share it between different departments and institutions in near real time.

A blockchain can also help establish secure messaging services for fast and comfortable patient-institution communication on administrative and non-urgent medical cases.

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Blockchain Opportunities in Healthcare and Pharma

Real estate

Today’s real estate platforms use blockchains for solving two major tasks: ensuring safe data storage and automating key processes such as validating property ownership and transferring funds.

A blockchain allows for maintaining immutable and transparent property ownership and payment history. StreetWire and ShelterZoom use this technology to simplify data management for real estate businesses.

A blockchain also offers reliability and automation, which are crucial for the successful operation of real estate businesses. Companies like SMARTRealy and Propy leverage smart contracts to sell, buy, or rent property. Smart contracts ensure fast, secure, and fully automatic execution of agreements between several parties.

Supply chain

Global giants like Walmart, BMW, and FedEx deploy blockchains for improving data security and operational transparency. A blockchain can store tamper-proof records of all operations, transactions, and freight data to simplify the analysis of a supply chain’s efficiency and operations.

Blockchain platforms can also be used for authenticating assets. According to Gartner, organizations are shifting their focus to trust models based on algorithms instead of centralized authorities. And the blockchain is a perfect example of such a model.

Read also:
How to Implement Blockchain in Supply Chain: A Practical Example of a Custom Network Implementation


Blockchains can also be useful for improving the security and transparency of many government processes: tax collection, information governance, elections, etc. The Canadian government has Cartena, a blockchain-based platform for analyzing government spending.

In the case of elections, a blockchain can be used to speed up vote counting and ensure the accuracy of results. As all data records are immutable, tampering with electronic votes on a blockchain becomes almost impossible. However, maintaining the anonymity of a voter’s choice while validating their identity may be a challenge.

As you can see, different industries can use blockchains to improve the security of their data, financial transactions, and communication.

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The blockchain offers rich opportunities for maintaining a high level of data safety thanks to reliable data encryption mechanisms, data integrity, network resilience, and scalability. As a result, switching from a traditional system to a blockchain-based system can be beneficial to organizations in almost any industry.

But just as with any revolutionary solution, organizations should be ready to deal with a number of drawbacks and complications when using a blockchain to improve the cybersecurity of their products. Among the key challenges are reliance on private keys, adaptability issues, and lack of expertise.

At Apriorit, we have a dedicated team of highly competent blockchain developers who know all the ins and outs of this promising technology. Get in touch with us and we’ll gladly assist you in turning your blockchain-related idea into a real-life product.

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