What is Web3 cybersecurity?

According to a policy brief from the University of Cambridge, “The term web3 refers to the putative next generation of the web’s technical, legal, and payments infrastructure – including blockchain, smart contracts and cryptocurrencies. For its advocates, the peer-to-peer character of web3 means it represents a more equitable vision for the web than its current iteration, 

Web 2.0, which is dominated by powerful intermediary platforms (Facebook, Amazon, Apple, Google and other big tech companies).” It focuses on decentralization, giving users more control over their data and online interactions. Unlike earlier versions of the internet, Web1.0 (static websites) and Web2.0 (interactive platforms controlled by big companies like Google or Facebook), Web3 uses blockchain technology to create a system where no single entity has full control.

Web3 cybersecurity refers to the strategies and practices designed to protect decentralized systems in a Web3 ecosystem. It is built on blockchain technology and decentralized networks, allowing a “read-write-own” model where users can interact with data as well as have ownership and control over it. The decentralization eliminates reliance on centralized authorities. 

The cybersecurity risk that comes with Web3

While its architectural promises, like tamper-resistant ledgers, decentralized identities, and smart contracts, offer significant advancements in the security and management of digital assets, Web3 introduces critical and novel cybersecurity risks that overshadow those found in traditional, centralized Web2 systems. 

A risk inherent to Web3 is the proliferation of new attack vectors and vulnerabilities due to its decentralized and trust-minimized architecture. These include smart contract flaws, scalability and interoperability challenges, identity management weaknesses, and a marked shift in attack surfaces that adversaries exploit.

Beyond this, the study ‘Stealing Trust: Unveiling Vulnerabilities in Web3 Authentication’ provides another prevalent challenge in authentication, “Web3 authentication is a challenge-response protocol where the user is identified by a public key (wallet address)...A malicious application A can present a valid signing message from application B for the user to sign... We call such attacks Message Attacks.”

Central to Web3 is the abandonment of centralized authorities in favor of distributed consensus and user-owned data. The decentralized structure, while reducing single points of failure, broadens the overall attack surface. In Web2, security perimeters, managed and monitored by professional teams, gatekeep access to sensitive data and services. 

In contrast, Web3’s network of distributed nodes and open APIs provides adversaries with countless points of entry. Without a centralized authority overseeing updates, patches, and incident responses, malicious actors can focus their efforts on nodes or smart contracts that are poorly maintained or inadequately secured.

The application of Web3 cybersecurity

Web3’s cybersecurity tools are being applied to solve pressing issues of data fragmentation, privacy, accessibility, and fraud. A paper published in JMIR Formative Research on decentralization in healthcare, “Web3 aims to create a more secure, transparent, and user-owned paradigm built on blockchain technology and peer-to-peer networks which enable users to securely interact with one another without the need for intermediaries.”

Permissioned blockchains can aggregate and encrypt patient records. Each access request, by a doctor, nurse, or pharmacist, must be authenticated against an immutable record of consents managed by smart contracts. 

The utilization of private keys ensures that even if data storage is globally distributed, only those with explicit authorization (the right key) can access information. If an unauthorized attempt is detected, systems can trigger penalties or alerts, dramatically reducing the risk of unauthorized disclosures or ransomware attacks.

Platforms like Medicalchain and Guardtime Health are demonstrating how blockchain can facilitate secure data sharing while giving patients control over their health records. Patients can use cryptographic keys to grant access to their information selectively, ensuring that only authorized healthcare providers can view sensitive data. Smart contracts can automate various healthcare processes, such as insurance claims and appointment scheduling, streamlining operations and reducing administrative burdens.

Does Web3 have any value in compliance?

According to a Healthcare (Basel) study on blockchain based healthcare implementation, “It adds the trust layer using cryptographic techniques, advanced encryption signatures, and consensus algorithms for the storage, exchange, registration, and management of healthcare data.”

Healthcare compliance entails adherence to regulatory requirements like HIPAA. Web3’s decentralized architecture inherently supports many of these compliance objectives by providing immutable records, granular access controls, and patient-centered data governance models that empower users and strengthen organizational accountability. These features address the core pain points of healthcare compliance, namely, ensuring data integrity, preventing unauthorized access, enabling transparent audits, and facilitating interoperability without sacrificing privacy.

A prevailing theme across the literature is that Web3 technologies offer healthcare organizations a decentralized framework to achieve stronger data provenance and auditable transparency. Blockchain’s tamper-resistant ledger records every transaction immutably, creating a verifiable trail of all data interactions, from creation and modification to access and sharing. This permanent audit trail helps healthcare providers show compliance during regulatory inspections, reduces the risk of fraud, and enables real-time monitoring of data usage. For example, studies have shown that permissioned blockchains improve traceability of pharmaceutical supply chains and patient record access, achieving near 100% success in counterfeit detection and fraud prevention.

How does it work

1. Web3 cybersecurity relies on decentralized networks to enhance security and reduce single points of failure.
2. It uses blockchain technology to create an immutable ledger, ensuring data cannot be altered without consensus from the network.
3. Cryptography, particularly hashing, secures transactions and protects data integrity in Web3 applications.
4. Smart contracts automate agreements and transactions, but they must be audited to identify vulnerabilities before deployment.
5. Consensus mechanisms like proof-of-work (PoW) and proof-of-stake (PoS) validate transactions and updates across the network.
6. Users maintain control over their data through private keys, which must be securely stored to prevent unauthorized access.
7. Anti-phishing tools help protect users from scams that attempt to steal private keys or sensitive information.
8. Decentralization increases transparency, as all transactions are visible to network participants, fostering trust among users.
9. Web3 applications must implement encryption and digital signing of API queries to protect data during transmission.

Why is blockchain application not practical in healthcare

According to a Perspectives in Health Information Management study on the revolution of blockchain, “Blockchain technology conflates complexity, novelty, and diversity, which has posed challenges in gauging the value proposition of incorporating the technology.”

Healthcare systems generate massive volumes of data, from electronic health records (EHRs), imaging, genomics, to real-time remote patient monitoring via wearable devices. Conventional blockchain networks, particularly public or permissionless architectures, struggle with the requirements for high transaction throughput and low latency processing needed by healthcare applications. Each transaction requires network-wide consensus and cryptographic verification. 

Most blockchain designs replicate the entire ledger across nodes, resulting in significant storage and computational overhead. This replication model, while enhancing data immutability, conflicts with practical needs to store high-resolution medical images or large genomic datasets. In consequence, real-time applications like telemedicine or critical decision support systems cannot currently rely on blockchain’s on-chain data storage or processing alone without significant performance degradation.

Related: HIPAA Compliant Email: The Definitive Guide

FAQs

How can Web3 applications and infrastructure be protected? 

Best practices include API query/response encryption, using web application firewalls (WAFs), API security measures, and bot management.

What is the importance of regular security audits?

Regular security audits, including smart contract audits, are needed in order to spot and fix security vulnerabilities in smart contracts. 

What is Transport Layer Security (TLS) and why is it important for Web3? 

Enforcing encryption and digital signing of API queries and responses for Web3 DApps (decentralized applications) using TLS is necessary for protecting application data.