Security Issues in the Blockchain(ed) World

Abstract

The innovative potential of blockchain technology proves to be convenient and useful in different sectors, but these opportunities may also be disruptive and create challenges. This paper investigates technical, risk and security related challenges of blockchain. The use of this technology is viewed in light of financial crime that pose a threat to security on national and international level as well. Firstly, elements of blockchain technology and the reasons they really matter are explained. Secondly, we focus on national security and how is it affected by the criminal use of cryptocurrencies. Thirdly, we elaborate on the lack of standards and mechanisms in connection with illegal activities, particularly money-laundering and financing terrorism. Finally, we suggest the use of fuzzy methods for security analysis and testing, and compatibility with GDPR for better protection of the recorded data in chain. We conclude that a collaboration of responsible entities in different sectors is needed as well as the investigation of potential ways in which actors can exploit further applications. The convergence of terrorism and cybercrime should be considered, and the necessary preventive actions taken.