https://www.techtarget.com/searchsecurity/tip/Top-3-Web3-security-and-business-risks
The next chapter of the internet's evolution isn't just about a highly decentralized architecture; it will bring with it a host of security implications. These early days of so-called Web 3.0 have brought a surge in funding, development and hype, but also fraud and cybersecurity incidents.
As the broader market grapples with the potential and perils of a more decentralized internet, web developers and users must consider Web 3.0 in context, including its security features and risks.
Web 3.0 is a movement to shift the economic benefits of the World Wide Web to its participants by changing its foundational architecture. The first generation of the web, which is sometimes called Web 1.0, offered participants little agency, mostly limiting them to reading static information uploaded by site administrators.
Web 2.0 brought a revolution in unlocking user-generated content, from blogs to social media, video to mobile apps. As billions of people around the world began to entrust the web with their content, and later their personal, shopping, and financial information, big tech companies such as Amazon, Google and Facebook parent Meta amassed colossal amounts of centralized data, control and wealth. This centralization has not only exacerbated power asymmetries between users and platform administrators, as well as digital haves and have-nots, it has also confronted businesses and individuals alike with prolific cybersecurity, fraud and data privacy risks.
Web 3.0 thus marks a philosophical turning point as much as a technological one. Decentralized databases and ledgers distributed over nodes available to anyone are designed to counteract the risks of monopolization and centralized "honeypots" of sensitive information. Instead, trusted information will be available and simultaneously updated across many nodes, reducing the possibility of theft, fraud or deletion. Furthermore, the underlying blockchain technology allows any event -- whether transaction, interaction or identification -- to be uniquely represented, which enables tokenization. These capabilities underlie a novel form of digital economics, proponents believe, where anything, from content to currencies to credentials can be owned, transferred, sold or controlled by the user, independent of a centralized authority.
The following aspects of Web 3.0 have the most impact on security:
The promise of Web 3.0 and blockchain architectures spells an exciting future, and it can be difficult to foresee the unique risks that might emerge from the design tradeoffs. For example, Web 2.0's democratization of user-generated web content wasn't just a revolution in expression, information access and community; it also ushered in an era of prolific misinformation, unprecedented surveillance and centralized gatekeepers.
Thus, these early days of Web 3.0 development are a crucial time to assess its emergent risks, which fall into the following four main categories:
Web 3.0 has ushered in a new class of cyberthreats that are unique to blockchain networks and interfaces. Below are some examples of these novel threats:
These novel methods exist alongside traditional social engineering threats, such as phishing attacks. The risks are exacerbated by the fact that users must take responsibility for the security of their data, rather than relying on centralized gatekeepers. In fact, the complexity of Web 3.0 interfaces -- often involving multiple, personally managed wallets and passwords that cannot be restored -- creates a vulnerability to social engineering attacks.
Many recent blockchain attacks have focused less on the technology and more on basic human vulnerabilities. For example, stolen cryptographic keys (private digital signatures) were the likely cause of the $73 million breach of the Bitfinex cryptocurrency exchange. Endpoint vulnerabilities, such as those at the device, app, wallet or third-party vendor level, are also entry points for malicious actors. Employees or vendor personnel are also targets, as exemplified in the case of Bithumb, a crypto exchange that investigators say was hacked by compromising an employee's computer.
A wider network topology that encompasses actors, data storage and interfaces inherently expands the aperture of security risks. While blockchain transactions are encrypted, and decentralization of data and services reduces single points of attack and risks of censorship, they also have the potential to expose data to a broader set of risks, including the following:
Web 3.0 capabilities, such as user-controlled wallets, ID portability and data minimization, mitigate some of Web 2.0's data confidentiality and privacy risks by offering people greater agency and control over their data. However, self-sovereign identity (SSI), pseudonymity and anonymity have downsides. The transparent nature of public blockchains, which make the record of transactions available to everyone, builds trust without an intermediary but also comes with security and privacy tradeoffs. Here are a few examples of identity-related risks of Web 3.0:
As Web 3.0 applications evolve in the coming decade, organizations must consider the following risks from adjacent technological, political and social forces:
Just like they did with Web 2.0, organizations must carefully consider questions surrounding Web 3.0 design, policy, human rights and monetization.
Microeconomies, currencies and other financial assets are embedded in most of the early Web 3.0 applications and digital communities. They give rise to new incentives and disincentives that will shift the risk calculation. Take cybersecurity as an example: Web 3.0's embedded economic architectures create clear incentives for hackers compared to traditional cloud or IT deployments. In traditional environments, services and data are often exploited without a clear or immediate monetary benefit. In blockchain applications, in comparison, significant value is often already encoded directly in the blockchain.
Businesses must also evaluate Web 3.0 for consumer and related legal, environmental and societal risks. As notions of individual ownership, financialized participation and decentralized interoperability are embedded in the web, business leaders and those designing and safeguarding the Web 3.0 ecosystem face several questions that affect the security of the organization and individuals:
The next generation of the web is not just about empowering people through distributed governance -- technical, social and economic -- it's also about better securing the ecosystem in the process. Distributed networks offer some security benefits, but they are far from immune to software exploits, human error and other vulnerabilities.
The vision of Web 3.0 addresses crucial issues of its predecessor related to power asymmetry, control, censorship, fraud, privacy and the risk of data loss. However, it does not exclude the emergence of a new class of risks in data security, identity, economic incentives and novel approaches to social engineering.
16 Feb 2023