The internet has come a long way since its inception in the late 1960s. We've gone from a text-based system to a graphical interface, and now we're in the midst of a radical transformation to what is known as the Web3. This new web is based on the Semantic Web, a system of linked data that has the potential to revolutionize the way we use the internet. But with this new level of interconnectedness comes a new level of risk. In this blog post, we'll explore the cybersecurity threats that are unique to Web3.

What is Web3

Web3 is the next evolution of the internet. It is a decentralized, open-source platform that allows for secure, peer-to-peer interactions without the need for intermediaries.This new version of the web will be powered by blockchain technology and will be completely decentralized (running on the same technology that has allowed for the growth and adoption of cryptocurrency). 

For those that aren’t familiar, blockchain is a distributed database or ledger that is shared among endpoints on a computer network. It allows for the storage of electronic data in a way that guarantees security of the record data without the need for a third party. In the area of cryptocurrency, this means that we can record and verify transactions without the need for a third party like the bank or a national government.  

Impacts of Web3 on Cybersecurity

The rise of Web3 – the decentralized web – has given rise to new opportunities for cybersecurity. With data and information stored on a distributed ledger, Web3 applications are more secure and resilient to attacks than traditional web applications.

However, Web3 also introduces new challenges for cybersecurity. For example, smart contracts – which are programs that run on a blockchain – can contain security vulnerabilities that can be exploited by hackers. And because of the pseudonymous nature of many Web3 applications, it can be difficult to track down and prosecute cyber criminals.

Decentralized Data

In a centralized system, data is stored in a central location. This central location is typically controlled by a single entity, such as a government or a corporation. In a decentralized system, data is distributed across a network of computers. This allows for many different entities to have control over the data.

There are many different applications for decentralized data. One example of this in the cybersecurity world is the deep web. For those that aren’t familiar the deep web is the portion of the internet that is not indexed by normal search engines like Google. The deep web makes up roughly 95% of the data on the internet and it’s a treasure trove of information for hackers. This is where people go to buy malware kits, recruit other hackers, and conduct all sorts of illegal business online. As the internet becomes more decentralized and less regulated we can expect more of this type of information to be accessible to cybercriminals.

More Endpoints for Hackers to Target

The amount of devices that we have on the internet has continued to increase steadily in the last few years. It is growing at roughly 18% year-over-year and has reached over 15 billion devices globally. This means that attackers have more potential targets than ever before. Going forward, security teams need to be extra diligent in monitoring their environments and hardening their systems. This doesn’t just mean things like laptops or cell phones, but all smart devices like smart cars, bluetooth devices, and medical implants (like pacemakers) are all accessible from the internet and can be targeted by hackers.

Potentially Better Platform Security

One of the benefits of technologies such as blockchain is that they are inherently secure. They are so secure that some of the world’s richest people were willing to put millions of dollars into products like bitcoin and ethereum. To this date we have not seen any situations where the blockchain itself was hacked to produce fraudulent cryptocurrency coins and this may be a positive sign for what’s to come.

Benefits of Web3

For all of its security concerns the Web3 comes with many benefits over traditional Web2.0 platforms.

Some of the potential benefits of Web3 include:

• Increased security: With no central point of control, web3 has the potential to be more resistant to hacking and other security threats. By giving entities more control over their data and devices it allows for the development of new technologies that can be significantly more secure than what is currently in place (for example, blockchain technology).
• Reduced costs: By eliminating the need for intermediaries, web3 can help reduce costs for users and businesses alike. When companies have a monopoly over any industry including data and technology they can charge people for access. By making the information easily accessible or making the technology open source it becomes cheaper for people to access that information.
• Increased privacy: Web3 platforms are often built with privacy in mind, meaning users can be sure their data is safe and secure. Most platforms are designed to use encryption by default for all communications and don’t share information with other users, making it less likely that information will be accidentally leaked to any other parties. Also, since no one is directly controlling the interactions, the chances of someone selling your information to an interested party is very low.
• Greater control: Since users interact directly with each other and the data that they want, they have greater control than when they go through an intermediary.

How Web3 can Amplify the use of AI and Machine Learning

The application of Artificial Intelligence (AI) and Machine Learning (ML) continues to grow in a variety of industries. While these technologies have widely been used to improve efficiency and decision-making processes, their potential has yet to be fully realized.

With Web3, data will be more decentralized, accessible and interoperable, which could lead to better AI and ML models. The quality of AI and ML models is heavily dependent on the quality of information that they are fed. If the amount of information available increases then so too will the models that use that information.

Additionally, the use of smart contracts could help to automate processes, making it easier to implement these technologies at scale. A smart contract is simply a program on the blockchain that will run when a predetermined condition is met, allowing for the automation of some processes.

Ownership of Information or Data

The trend of data ownership has been growing in recent years, with more and more people asserting their right to control their data.

As presently constructed many of the platforms we use such as social media are actually the owners of our information. They can use and routinely sell our personal information to companies that have a vested interest in learning more about us. In an environment where the data is decentralized then no one entity will be able to collect and sell our personal information. The information will be safely stored on computer devices that we can control and will only be shared with people that we want to share that information with.

Elimination of the Central Point of Control

A big shift in Web3 is that it moves us away from having a central point of control for our data. This shift is already underway, and it is being driven by advances in technology, such as blockchain and distributed ledger technology.

This provides users with more freedom and autonomy over their data than ever before. One big advantage is that it will make the internet more resilient to censorship, without an entity controlling information people will be able to share their ideas and thoughts unfilter to other people around the world.

Risks of Web3

Lack of Accountability

With the advent of Web3, there are several risks that have arisen that need to be taken into account. The first is the risk of loss of control. With Web3, there is no central authority controlling the network. This means that if something goes wrong, there is no one to fix it. Currently, the entities that control information are mandated by compliance regulations to protect that data, ensure its integrity and have certain controls in place to ensure user privacy. In a decentralized market then there is no one responsible for ensuring that these precautions and controls are in place.

For more information, learn about who should be responsible for managing information in your organization.

Web3’s Lack of Centralized Control and Access to Data

A lack of centralized data can also make it difficult to make informed decisions, as data is spread across different departments and locations. While decentralized data comes with many benefits for individual users, for businesses it can be difficult to make quality business decisions without having high quality information. Having centralized data that can act as a single source of truth is a great way for businesses to gather information on competitors, customers etc. Without that information it can make analysis more difficult.

Web3 and Blockchain Security Vulnerabilities

The decentralized nature of Web3 and blockchain technologies presents unique security challenges. Because there is no central authority controlling these networks, it is difficult to track and manage security vulnerabilities. Additionally, these technologies are often used to store sensitive data, which makes them a target for hackers.

Despite these challenges, there are a few steps that organizations can take to improve security. First, they can develop a comprehensive security strategy that takes into account the unique nature of these technologies. As a business you need to understand the type of devices you need to deliver your services and then come with a strategy to secure those devices according to your needs. In the cybersecurity field this is often done through threat modeling, which is the formal process of identifying risks relevant to your organization and their corresponding mitigations. Second, they can partner with other organizations to share information and resources. By working with other businesses that are subject matter expertise in Web3 you can get tips and direction on how your organization can leverage this technology effectively. Finally, they can invest in research and development to stay ahead of the curve. Since this is a new space it’s important that companies that want to be first movers in this space invest R&D to develop new solutions before their competitors can. 

Protecting Personal Data In Web3

Along with this increased connectivity comes a need for increased security for our data. With so much information being shared and stored online, it's more important than ever to make sure our data is safe from hackers and other cybercriminals.

There are a few ways we can protect our data in Web3. One is to encrypt our data so that only authorized users can access it. Encryption is already in use on the internet in the form of HTTPs but it’s important that you take extra precautions to ensure that encryption is used whenever possible. For example, using a VPN to ensure that your data is encrypted at all times and enabling encryption at rest/storage are two things that you should do to ensure that your data is protected against eavesdroppers. This is especially important when you are using insecure networks like public wifi, library wifi or internet cafes.

Another tip is to limit the amount of places where you share data. The more people or companies you share your information with, the greater the chance that your personal data will be leaked. You want to limit your chances of exposure by providing as little information as possible to third party entities. You should also do your due diligence to look up a company to ensure that they are legitimate before you decide to share your personal information with them.

And finally, we can use authentication and authorization protocols to control who has access to our data. By protecting our accounts with things like strong passwords and 2 factor authentication reduces the chances that our account will be compromised and therefore reduces the possibility of our information being leaked. 

For more, check out this Checklist for Blockchain Application Security.

Conclusion

As we move into the age of Web3, it is important to be aware of the new cybersecurity threats that come with it. In the past, most attacks have been focused on stealing data or taking down systems. However, with the rise of decentralized applications and smart contracts, attackers can now target these applications and disrupt their operations. This can lead to financial losses for users and businesses alike. To stay ahead of these new threats, subscribe to our newsletter.