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DDoS attacks in blockchain networks, explained

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What are DDoS Attacks?

A Distributed Denial-of-Service (DDoS) attack attempts to disrupt the normal operation of a website, computer, or online service by overwhelming it with a flood of internet traffic. This influx of traffic depletes the target’s resources, such as bandwidth, processing power, or memory, making it unable to respond to legitimate user requests.

How DDoS Attacks Work

DDoS attacks involve multiple compromised devices, collectively known as a botnet. Hackers insert malware into these devices, which could be cellphones, desktops, servers, or Internet of Things (IoT) devices. These infected devices, referred to as bots or zombies, are then coordinated to send a massive amount of traffic to the target system simultaneously. The sheer volume of requests overwhelms the target, causing service disruptions.

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DDoS Attacks on Blockchain Networks

While attacking blockchain networks with DDoS attacks is theoretically feasible, it is more challenging than targeting centralized systems. Blockchain networks are decentralized, operating across numerous nodes that validate and process transactions, making them inherently resistant to such attacks.

Transaction Flooding
One method to disrupt blockchain networks is by flooding them with spam transactions, which overloads the network and slows down transaction processing. This creates a backlog of transactions in the mempool (a queue for unconfirmed transactions), delaying the validation of legitimate transactions.

A notable example is the DDoS attack on the Solana blockchain in September 2021. During Grape Protocol’s initial decentralized exchange offering (IDO) on the Solana-based DEX Raydium, bots inundated the network with 400,000 transactions per second, causing a 17-hour downtime.

Targeting Decentralized Applications (DApps)
DDoS attacks can also target DApps built on blockchain networks. By flooding these applications with requests, attackers can disrupt their operations, causing service outages. Cryptocurrency exchanges, which ensure liquidity in the blockchain ecosystem, are frequent targets of DDoS attacks, leading to temporary disruptions in trading.

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Effects of DDoS Attacks on Blockchain Networks

Transaction Flooding
Attackers can overwhelm a blockchain network with a high volume of transactions, clogging the network and slowing down its operations. This disrupts businesses, exchanges, and services reliant on the network.

Compromising Smart Contracts
Hackers can flood vulnerable smart contracts with excessive or fraudulent transaction requests. This overloads the network, causing delays in transaction validation and potentially disrupting other contracts and critical operations.

Software Crashes
Core blockchain software has limits on memory allocation and transaction processing. A surge in transactions can cause unexpected behavior or crashes, leading to network slowdowns or outages.

Node Failure
Nodes running the blockchain software may crash under the weight of a DDoS attack. This increases the load on remaining nodes, potentially leading to further network disruptions.

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DDoS Attacks on Crypto Exchanges

Crypto exchanges are vital to the blockchain ecosystem but are often targeted by DDoS attacks. Attackers exploit vulnerabilities in exchange infrastructure, causing operational disruptions, extorting ransom, or manipulating markets.

Common DDoS attack methods include:

– SSDP Amplification: Exploits UPnP protocols to send large amounts of traffic to the target.
– NTP Amplification: Sends small queries that trigger large responses from multiple bots.
– Application Layer Attacks: Target the top layer in the OSI model, disrupting specific applications.

Preventing DDoS Attacks on Blockchain Networks

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Node-Level Security Measures
– Adequate Resources: Ensure nodes have sufficient storage, processing power, and bandwidth.
– Authentication and Access Controls: Implement strong authentication methods and access controls.
– CAPTCHA: Use CAPTCHAs to differentiate between legitimate users and bots.
– Load Balancing: Distribute traffic to mitigate the impact of attacks.

Network-Level Protection
– Firewalls and IDS/IPS: Deploy firewalls and intrusion detection/prevention systems to identify and mitigate attacks.
– CDNs: Use content delivery networks to disperse and absorb attack traffic.

Audits and Stress Testing
– Regular Audits: Conduct thorough audits of smart contracts, data structures, and consensus algorithms to identify vulnerabilities.
– Stress Testing: Perform regular stress tests to evaluate the network’s resilience to DDoS attacks.

Redundancy and Backup
– Redundant Infrastructure: Implement redundant network infrastructure and backup servers.
– Geographically Dispersed Nodes: Ensure nodes are distributed across multiple locations to withstand region-specific attacks.

By adopting these measures, blockchain networks can enhance their resilience to DDoS attacks and maintain the integrity and availability

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Source: tradingview.com

The post DDoS attacks in blockchain networks, explained appeared first on HIPTHER Alerts.

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Blockchain

Europe Tax Advisory Market Valuation Poised to Soar to USD 28.50 Billion By 2032 | Astute Analytica

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Blockchain

Brazil to Tighten Regulation on Foreign Crypto Exchanges

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Brazil’s Receita Federal Increases Scrutiny on Foreign Cryptocurrency Exchanges

Brazil’s tax authority, Receita Federal, plans to intensify its oversight of foreign cryptocurrency exchanges operating within the country. This move aims to enhance regulation and transparency amid the rising use of digital assets in Latin America’s largest economy.

New Reporting Requirements for International Platforms
Recent reports indicate that Receita Federal will soon issue an order requiring international cryptocurrency platforms, including Binance and Coinbase, to provide detailed operational data and information on their partnerships with local service providers.

Government’s Regulatory Focus
Andrea Chaves, Deputy Secretary of Inspection at the Federal Revenue Service, emphasized the importance of this measure. “It’s crucial for us to understand how they operate here and ensure there’s no illegality,” she stated. The government aims to ensure compliance with tax laws and confirm that services provided to Brazilian customers are fully legal.

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Wagner Lima, a risk management coordinator at Receita Federal, underscored the need to review collaborations between foreign exchanges and local service providers. This review ensures compliance with a 2019 regulation that mandates information sharing.

Rise in Crypto Asset Declarations
This decision comes in response to a significant increase in crypto asset declarations by Brazilians. From January to July 2023, Brazilians declared 133.6 billion reais ($24.6 billion) in crypto assets, marking a 36.6% increase from the previous year. Notably, 14.5 billion reais were declared through foreign exchanges, representing a 51.2% growth.

Upcoming Order Details
The forthcoming order will require exchanges to disclose their operational methods and customer service practices in Brazil. However, it will exclude customer-specific data and transactional information to comply with current Brazilian laws.

Future Regulatory Framework
Brazilian authorities are also working on developing a clear framework for digital currencies and their legal status, expected to be introduced by mid-2024. This framework aims to organize both local and foreign exchanges operating within Brazil, ensuring their compliance with local laws and regulatory requirements.

Source: cryptotimes.io

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The post Brazil to Tighten Regulation on Foreign Crypto Exchanges appeared first on HIPTHER Alerts.

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Financial Institution NAB Embraces Crypto Custody Solution

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National Australia Bank Invests in Crypto Custody Firm Zodia Custody

National Australia Bank (NAB), a prominent financial institution, has taken a significant step into the cryptocurrency custody arena. Instead of creating its own digital currency, NAB Ventures has opted to invest in Zodia Custody, a London-based firm specializing in the secure storage of digital assets for institutional clients.

Strategic Shift and Industry Alignment
This investment marks a strategic shift for NAB, aligning itself with global financial leaders like Standard Chartered, Northern Trust, and SBI Holdings, who have already acknowledged the importance of safeguarding digital assets for investors. By partnering with Zodia Custody, NAB showcases a forward-thinking approach, choosing collaboration over direct competition with established players like Coinbase.

Commitment to Innovation
The decision to invest in Zodia Custody reflects NAB’s commitment to providing cutting-edge solutions to its institutional clients while leveraging the potential of the crypto market. This move positions NAB as a key ally for institutional investors seeking secure and regulated infrastructure to navigate the complexities of digital asset storage and management.

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Additional Insights
One significant aspect not highlighted in the initial report is that NAB’s engagement with a crypto custody solution underscores the growing demand from institutional investors for secure and regulated infrastructure to enter the crypto space.

Key Questions
1. How will NAB’s partnership with Zodia Custody impact its overall financial services and competitive position in the market?
2. What regulatory challenges and compliance requirements does NAB face by entering the crypto custody space?
3. How does NAB plan to address security concerns related to the storage of digital assets for its institutional clients?
4. What are the potential risks and rewards for NAB as it ventures into the crypto custody sector?

Key Challenges
NAB may encounter several challenges, including regulatory compliance issues, cybersecurity risks, market volatility of crypto assets, competition from existing players in the space, and the need to build trust among institutional clients for their crypto custody services.

Advantages
1. Access to a Growing Market: Entry into the rapidly expanding crypto market and potential new revenue streams.
2. Strengthened Partnerships: Enhanced relationships with global leaders in the crypto custody sector.
3. Diversification: Broadening service offerings to meet the evolving needs of institutional clients.

Disadvantages
1. Regulatory Scrutiny: Increased regulatory oversight and compliance costs.
2. Market Volatility: Exposure to the highly volatile nature of crypto assets.
3. Reputation Risk: Potential damage to reputation if security breaches or operational issues occur in the custody of digital assets.

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Source: smartphonemagazine.nl

The post Financial Institution NAB Embraces Crypto Custody Solution appeared first on HIPTHER Alerts.

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