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What is Security (protection)?

In a protection context, security refers to the technologies, best practices, precautions and measures that help to secure DLT. Examples include cryptographic and wallet technologies; best practices used by smart contract developers; and basic security practices such as strong passwords and two-factor authentication.

Security (protection) is one of Blockchain Journal’s two disambiguated versions of the term “security.” The other is security (finance), which relates to the treatment of cryptocurrency assets as securities from an investment and regulatory point of view. In a protection context, “security” refers to all of the technologies, best practices, precautions and measures that play a role in helping to secure Distributed Ledger Technology (DLT). These include but are not limited to:

  • The cryptographic technologies that DLT relies on for everything from applying a digital signature (belonging to a transaction’s originating account) to a given chain’s encryption and hashing features for maintaining ledger integrity.
  • The various wallet technologies — ranging from custodial wallets to hardware wallets — that are used to secure the cryptocurrency and fiat currency holdings of individuals and organizations who engage in DLT-related activities.
  • The role of seed phrases and other approaches that make it possible for DLT account holders to securely recover access to their accounts or wallets.
  • The basic security practices required of both service providers and end-users to safeguard their technologies and accounts from being exploited. This includes many of the common practices that are widely applicable to information technology in general. Everything from strong passwords and two-factor authentication for just about anything that can be logged into (e.g., accounts on centralized exchanges, Github.com accounts where source code is kept, etc.) to encryption of sensitive data in transit and at rest.
  • The best practices used by smart contract developers — particularly those involved in developing cross-chain bridges (which have been historically proven to be quite vulnerable) — to ensure their code is securely developed.
  • The efforts made by blockchain industry service providers to secure their internet-based application programming interfaces (APIs) from unauthorized access and exploitation.
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