Privacy and Security on Blockchain

Abstract

In this chapter, you will explore the vulnerabilities and attack surfaces of blockchain systems that arise from their open, permissionless nature. You will learn how privacy and security issues manifest at different layers of blockchain architecture, including peer-to-peer networking, transaction propagation, block mining, and smart contract execution. The chapter introduces you to key privacy challenges such as identity leakage, transaction linkability, and deanonymization in UTXO and account-based systems. You will also study how adversaries can mount attacks that exploit consensus protocols, timestamp synchronization, and transaction ordering. The chapter concludes with detailed examples of smart contract vulnerabilities, including reentrancy, front-running, and oracle manipulation, and highlights the economic and technical incentives that make these attacks feasible in Decentralized Finance ecosystems.