Todd Wasserman

Mar 16th 2018

Blockchain Technology’s Dark Side Worries the Department of Defense


Blockchain technology, the online ledger used to track bitcoin transactions, has proven to be useful for the business world. Unfortunately, criminals, extremist organizations and hostile foreign powers could also employ it for their uses.

Blockchain’s nefarious potential has prompted the U.S. Senate to call for a Department of Defense study to look at how the technology might be used to hurt or help U.S. security, according to The Washington Times.

While there are few instances so far of criminal and terrorist use of blockchain, the potential is real. However, the means of countering blockchain that the DoD is likely to study are still being worked out. That means there’s a race between weaponizing blockchain and finding effective countermeasures.

How the Bad Guys Could Use Blockchain

Blockchain is an online ledger that is seemingly impossible to tamper with. As ZDNet explained, the idea behind the technology is to broadcast every transaction to the community. When a majority of that community agrees that all transactions seen in the recent past are unique, those transactions are cryptographically sealed into a block.

“A chain thereby grows, each new block linked to the previously accepted history, preserving every spend ever made,” ZDNet said.

The transaction is hard or impossible to influence because rather than being stored on a single server, blockchain is distributed across the world via a network of private computers. As Marc Andreessen, co-partner of Silicon Valley venture capital firm Andreessen Horowitz, wrote in The New York Times, bitcoin and blockchain “gives us, for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate.”

That includes the potential negative consequences. As Interpol’s Christian Karam told attendees at the Black Hat Asia conference, blockchain could also be used to provide access to illicit content or malware control mechanisms that, once posted, would be hard to remove, according to Forbes.

Thankfully, the real-life examples of such blockchain abuse have been few. Last year, someone uploaded the decades-old Stoned virus to blockchain, security blogger Graham Cluley explained. But that instance appears to have been harmless. To demonstrate the security dangers of blockchain, researchers at the United Kingdom’s University of Newcastle also created ZombieCoin, a botnet command and control mechanism that can send commands to malware on bitcoin’s network.

Saving Blockchain from Itself

One saving grace of blockchain is that every transaction is recorded. Even if criminals shield their identity, they leave a digital trail that’s often of use to investigators. Chainanalysis, a firm that tracks such data, has worked with the FBI, the IRS and the SEC, among other government entities in the U.S. and Europe, for this purpose, MIT Technology Review noted.

One lingering concern is the emergence of quantum computing — a technology that uses qubits instead of bits to perform unfathomably complex transactions. A hacker using quantum computing could hack blockchain, but engineers are working on countermeasures, according to the International Business Times.

Blockchain technology is so new — it has only been around for about a decade — that hackers and security pros are still working out ways to exploit and preserve the system, respectively. The proposed DoD study shows that blockchain is far enough along to be a powerful tool and a potentially powerful weapon.