Dark Reading is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Operational Security

9/15/2017
12:55 PM
Simon Marshall
Simon Marshall
Simon Marshall
50%
50%

Swirlds Seeks End to Financial Attacks

Startup Swirlds is promising better-than-blockchain technology for financial transactions.

A significant part of the local US finance industry will soon be relying on a new blockchain-like technology that promises to be more secure than its peers. New ideas are welcome right now. Financial organizations are in turmoil, juggling the fight against next-gen cyber attacks while introducing new systems of transactional record that must combat them. The fight is on and the bets are being placed.

In this case, the stakes are the defense of DDoS and other attacks against new distributed data consensus platforms that harness the power of peer-to-peer decision-making and record keeping -- those in cryptocurrency and finance by public applications such as Bitcoin and Ethereum, and in private banking networks such as IBM Hyperledger.

Dallas-based Swirlds just closed $3 million in a seed round led by New Enterprise Associates that it intends to drive the growth of a patented technology model called hashgraph, which it claims surpasses other blockchains. It's designed to be theoretically faster than the Bitcoin or Ethereum models, but important in this context, stronger against cyber attacks than the private technology models

.

The really big problem here is that senior executives at banks have been, well, sharing too many cocktails at social gatherings, and implicitly trusting each other for way too long.

The technologies banks plan on using today have a "leader" model, that is, all information from a transactional peer group is fed to a single leader PC, which commands reconciliation, and then it's mirrored back for update to all other members. Sure, everyone has a single version of the database truth at that point. But this model is inherently weak because the leader is an obvious target for DDoS attacks; any of the members know the leader's IP address and can then launch a malicious attack via a botnet.

Why would members launch such an attack? They could be disgruntled, they may work for another organization, they may be on someone else's payroll. But worryingly, the attack could come from someone outside of the group. A member's PC could theoretically be exploited by someone external to the group who could then scoop authentication information and launch an attack on the leader without a member's knowledge.

Mance Harmon, Swirlds' CEO and co-founder, told Security Now, "Banks want to implement leader-based systems, but they don't understand what it is that they're trusting, and that is a false sense of security."

The effect of an ensuing DDoS attack could be dramatic. Current systems will replace the leader within a matter of seconds if the current one is compromised. But that's pointless because the new leader's IP address is still known to all the other members.

In an insidious case of follow-the-leader, the replacement leader is attacked (and replaced...) and a cascade continues until the peer group is destroyed. The importance of this is that any transaction of record is also destroyed too because it can no longer be trusted. And this attack could soon start as a relatively small disruption to a peer-based video game right across the spectrum to international stock trading and other time-sensitive financial transactions of high speed and high importance.

Swirlds has three patents and is looking to register three more. Its algorithm claims to solve these issues because the platform is based on consensus, that is, there is never a leader. But it faces a couple of disadvantages in the market. It acknowledges that there is its new code base to get used to. But more than that, banks are just not culturally ready.

"I've talked to some of the world's biggest banks, and their responses have been 'we trust each other, so what we currently have is OK,' I think they just don't understand the risks they're facing," said Harmon.


Want to learn more about the tech and business cases for deploying virtualized solutions in the cable network? Join us in Denver on October 18 for Light Reading's Virtualizing the Cable Architecture event – a free breakfast panel at SCTE/ISBE's Cable-Tec Expo featuring speakers from Comcast and Charter.

The first customer is the U.S. Credit Union National Association. It has 105 million members, and is launching an initiative called CU Ledger with Mountain West Credit Union Association and Best Innovation Group. It's an agreement Harmon says was won against IBM Hyperledger. But in a fledgling area, friends are important. In contrast, he's not ruling out an eventual partnership with IBM, depending on how well the roll out and results go. Certainly, he has a Swirlds SDK which could be used with the Hyperledger platform or others.

The technology could have widespread applications in other verticals which must track and record movement of information with perfect accuracy. Mance is understood to be talking about promoting Swirlds' approach to contribute to a new international standard with a global advisory firm focused on security and risk management.

Perhaps surprisingly, Swirlds has created a distributed game for the upcoming TechCruch Disrupt Hackathon. Alongside the fronted 'midnight pizza and beer' at the event, it's an avenue to show the proposition to other industries.

"We see a big play here for the gaming industry … where two players could be reaching for the same chest of gold at the same time. Who would get it?" said Harmon. Exactly.

Related posts:

— Simon Marshall, Technology Journalist, special to Security Now

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Pen Testers Who Got Arrested Doing Their Jobs Tell All
Kelly Jackson Higgins, Executive Editor at Dark Reading,  8/5/2020
Researcher Finds New Office Macro Attacks for MacOS
Curtis Franklin Jr., Senior Editor at Dark Reading,  8/7/2020
A Patriotic Solution to the Cybersecurity Skills Shortage
Adam Benson, Senior VP, Vrge Strategies,  8/3/2020
Register for Dark Reading Newsletters
White Papers
Video
Cartoon Contest
Current Issue
Special Report: Computing's New Normal, a Dark Reading Perspective
This special report examines how IT security organizations have adapted to the "new normal" of computing and what the long-term effects will be. Read it and get a unique set of perspectives on issues ranging from new threats & vulnerabilities as a result of remote working to how enterprise security strategy will be affected long term.
Flash Poll
The Changing Face of Threat Intelligence
The Changing Face of Threat Intelligence
This special report takes a look at how enterprises are using threat intelligence, as well as emerging best practices for integrating threat intel into security operations and incident response. Download it today!
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2020-12777
PUBLISHED: 2020-08-10
A function in Combodo iTop contains a vulnerability of Broken Access Control, which allows unauthorized attacker to inject command and disclose system information.
CVE-2020-12778
PUBLISHED: 2020-08-10
Combodo iTop does not validate inputted parameters, attackers can inject malicious commands and launch XSS attack.
CVE-2020-12779
PUBLISHED: 2020-08-10
Combodo iTop contains a stored Cross-site Scripting vulnerability, which can be attacked by uploading file with malicious script.
CVE-2020-12780
PUBLISHED: 2020-08-10
A security misconfiguration exists in Combodo iTop, which can expose sensitive information.
CVE-2020-12781
PUBLISHED: 2020-08-10
Combodo iTop contains a cross-site request forgery (CSRF) vulnerability, attackers can execute specific commands via malicious site request forgery.