Pentagon Discovers Troubling Vulnerabilities In Blockchain Technology

A report titled “Are Blockchains Decentralized, Unintended Centralities in Distributed Ledgers” warns the crypto industry that some big players can exert centralized control over the entire blockchain system.

The report raised concerns across various sectors such as security, fintech, big tech, and crypto industries.

The Defense Advanced Research Projects Agency (DARPA), the research arm of the Pentagon, appointed a security research organization, Trail of Bits, to investigate the blockchain. The security organization mainly focused on the two main cryptocurrencies in the global market, Bitcoin and Ethereum.


According to Trail of Bits, Bitcoin can be disrupted by two entities, while only two are needed to disrupt Ethereum. Additionally, 60% of all Bitcoin traffic goes through just three ISPs.

Crypto Assets in the New Era of Finance

The Pentagon report was released shortly after Terra’s dramatic collapse. Financial experts warn that the Luna crash was a key lesson in blockchain risk.

Factors such as supply chain issues, federal interest hikes, inflation, a looming recession, and the global economy continue to affect digital assets. The recently released report has only added to concerns about blockchain, affecting investor perception and confidence.

In this new digital financial era, security remains a significant challenge and a top priority.

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Security is always a big concern when it comes to blockchain

According to the Trail of Bits report, the security of a blockchain relies on the protocols and security of its off-chain governance or consensus mechanisms. Trail of Bits researchers have registered several accounts with mining pool sites to study its code. The revelations turned out to be quite shocking.

A leading global mining pool, ViaBTC, assigns the password “123” to its accounts, according to Trail of Bits. Another mining company, Pooling, even has a working credential validation policy. Meanwhile, Slushpool asks users to ignore the password field. These three mining pools represent around 25% of the Bitcoin hash rate or total computer power.

Big tech players need to be careful

The Trail of Bits report also cautions key players as they create their future. Joshua Baron, DARPA program manager overseeing the study, said the report highlights a constant need for scrutiny when evaluating the latest technologies like blockchains as their use increases in our society and our economy.

In conclusion, Baron said that a promise of security should not be taken at face value and people using blockchains should consider their associated vulnerabilities.

Nancy J. Allen

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