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Sidechain and cross-chain security issues

Blockchain technology concept.
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Sidechains and cross-chains are great engineering solutions to scale and expand the functionality of blockchains. They open up new opportunities for interaction between different networks. However, they also bring new security risks. As their popularity grows, sidechains and cross-chains are attracting more and more attention from attackers, making issues of data integrity, confidentiality, and availability increasingly relevant.
· Side chains
Sidechain is a technology that allows you to create additional data chains connected to the main blockchain network. The idea is to improve certain features or functionality of the blockchain by moving some of the operations from the base blockchain. Users can move their assets between the main blockchain and the sidechain. This allows you to improve scalability, speed up transactions, or add new features without requiring changes to the main blockchain.
For example, a sidechain of the Ethereum network called PoS polygon It performs nearly 500 times faster than the parent network.
· Crossed chains
Unlike sidechains, which usually operate as additional data chains within the same blockchain system, cross-chains involve the interaction between different blockchains, often even those belonging to completely different protocols and projects. The idea of cross-chains is to allow the movement of assets and data between different blockchains, enabling interoperability between networks.
First Blockchain Challenges and Solutions
To the the beginning of the blockchain era, when Bitcoin, the first and most famous blockchain network, appeared, performance limitations began to emerge. Blocks on the chain were generated approximately every 10 minutes, and there were limits to the number of transactions that could be included in a single block.
With the growing popularity of cryptocurrencies and blockchain, it has become clear that solutions are needed to improve performance and scalability. Transaction confirmation delays and throughput limitations have become urgent issues that need to be addressed.
The concept of sidechains began to emerge as a way to solve scalability problems. The idea was to move some transactions or operations off the main blockchain to improve performance without altering the main chain itself.
Over time, as blockchain technologies have developed, researchers and developers have begun to propose specific solutions and protocols for implementing sidechains.
Various projects have started experimenting with sidechains, testing them in real-life conditions. This has allowed the community to better understand the advantages and limitations of this approach.
It is important to understand that each sidechain has its own security measures. If a sidechain is compromised, the damage is contained within that chain and has no impact on the main blockchain. However, if the main blockchain is compromised, the sidechain can still function, but its connection to the parent chain will be rendered useless.
Comparison of side chains and cross chains
Both concepts aim to improve the scalability of the blockchain. They provide mechanisms to process more transactions and improve system performance.
Sidechain and cross-chain offload redundant operations from the main chain, making resource use more efficient. By leveraging sidechains and cross-chains, developers can improve their applications (dApp) with new features and functionality.
Smart contracts are the building blocks for creating complex and secure transactions within a single blockchain. Their automated and programmable nature greatly improves the functionality and efficiency of sidechains and cross-chains.
However, smart contracts currently operate primarily within a single blockchain network and cannot directly access or interact with data or code on another blockchain due to technical limitations and security concerns.
Dedy Lase, Global President of CryptoSafe, leads a team of over 15,000 members and shares his journey on his YouTube and Telegram channel, focusing on blockchain and cryptocurrency awareness. She explains: “Cross-chain smart contracts are decentralized applications composed of separate smart contracts on different blockchain networks that communicate to create a single unified application. These cross-chain smart contracts form a unified dApp with logic distributed across multiple blockchains.”
There are emerging technologies and concepts, known as interoperability solutions, that aim to enable communication and interaction between blockchains. These are bridges or gateways that allow some level of data or token transfer between blockchains. However, these solutions are still in development and have limitations.
Cross Chain Attacks
· Double expense
The Double-Spending attack aims to reuse the same assets on different blockchains. Double-Spending occurs when an attacker sends two or more transactions at the same time using the same cryptocurrency funds. A common example is a Race Attack, where the attacker sends two different transactions with the same funds at the same time. The attacker hopes that both transactions will be included in the blocks, which is more likely in blockchains with long block generation times.
Double spending remains a major challenge for blockchain systems, and researchers and developers are continually searching for effective methods to combat this threat. To prevent double-spending attacks, blockchain systems employ various protection measures and protocols. Transaction confirmation methods such as Proof-of-Work and Proof-of-Stake help reduce the likelihood of a successful attack. Additionally, many blockchains use consensus and authentication mechanisms to ensure transaction security.
· Return attacks
A return attack exploits a flaw in smart contracts where a function makes an external call to another contract before updating its state. This vulnerability allows the potentially malicious external contract to revert to its original function and repeatedly perform certain actions, such as withdrawals, using the same unchanged state.
Additionally, cross-chains are vulnerable to common DDoS attacks. To mitigate these risks and defend against such attacks, developers employ a variety of strategies, including advanced smart contracts and advanced cryptographic techniques. A crucial aspect of this process is conducting thorough testing and security audits when developing cross-chain bridges.
Multi-signature (Multisig) schemes are also used as a security measure. These cryptographic systems allow multiple users to jointly manage funds or execute transactions. Instead of relying on a single key or user, multisig requires signatures from multiple keys to authorize and execute specific actions.
Sidechain attacks
Side chains are particularly vulnerable to 51% attackespecially if their consensus algorithms are prone to this type of threat. An attacker who controls the majority of the network’s computing power can manipulate transactions, reject blocks, and alter the overall sequence of events on the sidechain.
Smart contracts on sidechains are vulnerable to recursive attacks, stack overflows, and other types of exploits. Protecting against these threats requires thorough auditing and testing of smart contracts, as well as the use of secure programming practices.
Conclusion
Sidechain and cross-chain technologies are widely used as gateways for exchanging funds and values between different segments of the cryptocurrency market. It is easy to understand why hackers of all kinds have targeted cross-chain bridges and related protocols. According to a Chain analysis reportThese technologies were responsible for the largest thefts of 2022, with total damages amounting to over $3 billion.
Major analytical platforms and their specialists are constantly on the lookout for stolen funds and scammers, working to block them on cryptocurrency exchanges and protocols. These platforms analyze large volumes of transaction data, group crypto wallet addresses, classify risks, and use data visualization to streamline the analysis process.
There is a strong demand among market participants for new Data Science approaches that involve in-depth research on various attributes. Furthermore, there is a shortage of analysts in the market. While enterprise solutions are available, there are also open source platforms supported by a community of experts for analyzing cross-blockchain transactions. Specialized tools have been developed for blockchain forensics between sidechains and cross-chains.
To improve the security of sidechains and cross-chain bridges, it is essential to increase transparency and standardization. This includes conducting audits to ensure compliance with industry standards and performing penetration tests. Additionally, implementing a secure software development lifecycle (SDLC) is necessary to improve the quality of smart contract development.
Currently, blockchains may seem like the domain of tech enthusiasts and their problems may seem niche. However, blockchain technology is rapidly expanding across various sectors of the economy, becoming an integral part of innovative business applications. As a result, the risks associated with blockchain technology are now relevant not only to cryptocurrency organizations, but also to traditional industries. Therefore, readiness to secure critical blockchain-based processes in the next three to five years must be established today.
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Blockchain Technology Will Transform Water Access and Management Globally

Disclosure: The views and opinions expressed here are solely those of the author and do not represent the views and opinions of the crypto.news editorial team.
Access to clean water is a basic human need, yet billions of people around the world still struggle to get it. According to the World Health Organization, over 2 billion people live in countries suffering from severe water stress, and this number is expected to continue to grow due to climate change and population growth.
Traditional water management systems have struggled to address these challenges, often hampered by inefficiencies, lack of transparency, and misallocation of resources. Blockchain technology offers a promising solution to these challenges, providing equitable access and sustainable use of this crucial resource.
The current state of water management
Water management today faces several pressing issues. Inefficiencies in water supply, distribution, and use, coupled with a lack of real-time monitoring, often result in resource waste and misallocation. Many water sources fail to realize their full potential due to infrastructure and financing shortfalls. For example, the Environmental Protection Agency (EPA) report indicated that the United States would need to invest $625 billion over the next 20 years to repair, maintain and improve the country’s drinking water infrastructure due to aging pipes and other infrastructure problems. Additionally, in the United States alone, household leaks can to waste nearly 900 billion gallons of water per year nationwide. This is equivalent to the annual domestic water consumption of nearly 11 million homes.
Furthermore, corruption and mismanagement of water resources can cause unequal distribution, with disadvantaged communities often bearing the brunt of water scarcity. For example, South Africa is struggling with myriad challenges to its water security: drought, inadequate water conservation measures, outdated infrastructure, and unequal access to water resources. The country faces significant water scarcity, with demand expected to outstrip supply by 2030, creating a projected gap of 17%.
Furthermore, the global water industry is highly monopolized, with a few key players controlling a significant share of the market. These companies exert substantial influence over the water supply chain, often prioritizing profit over equitable distribution and environmental responsibility. This concentration of power can lead to inflated prices and limited access for vulnerable populations. The global bottled water market alone is projected to reach $509.18 billion by 2030, with these large companies capturing a significant share of revenue. This monopolization exacerbates existing inequalities in water access and highlights the need for more decentralized and community-driven water management solutions.
Source: Grand View Search
The potential of blockchain in water management
Blockchain technology can address these issues by providing a transparent, secure, and decentralized platform for water resource management. This approach offers several advantages:
- Transparency and accountability. Blockchain’s immutable ledger ensures that all transactions and data entries are transparent and cannot be changed once recorded. This transparency can reduce corruption and ensure that water resources are allocated fairly and efficiently. For example, blockchain can be used to track water usage from source to end user, providing a clear record of how water is distributed and used. This level of transparency can help hold authorities accountable and manage water resources sustainably.
- Efficient resource management. Blockchain can facilitate the creation of smart contracts, which are self-executing contracts with the terms of the agreement written directly into the code. These contracts can automate water distribution based on real-time data, directing water to where it is needed most. For example, smart contracts could be used to manage urban water supply systems, automatically adjusting water distribution based on real-time consumption patterns and demand. This can help optimize water use, reduce waste, and ensure that households and businesses receive the right amount of water at the right time.
In Dubai, the Dubai Electricity and Water Authority (DEWA) has implemented a blockchain-based smart water network initiative as part of its broader smart city strategy. This project integrates blockchain technology with IoT sensors to monitor water usage in real time, manage distribution, and detect leaks. The decentralized ledger ensures data integrity and transparency, enabling more efficient water management and reduced waste. DEWA’s initiative aims to improve sustainability and resource management in the rapidly growing city, highlighting the potential of blockchain to support urban water management and conservation efforts.
Community participation and ownership
Through blockchain, individuals can directly control and monetize their access to water resources, eliminating the need for third-party intermediaries. This direct control model allows local communities to make collective and transparent decisions about their water use. By managing their water directly from the source, communities can tailor water management practices to their specific needs, promoting equitable distribution and encouraging a sense of accountability and stewardship.
Additionally, future models could allow people to monetize their access to water through web3 technologies. For example, a community-to-business (C2B) model could allow people to sell water directly to companies. In this model, people do not have to own the water directly, but can profit by staking their tokens during event sales pools. This approach not only supports sustainable water management, but also creates economic opportunities for community members. Additionally, a “Burn to Secure” protocol can be used to provide water allocation rights. This protocol provides a true sense of water security and financial opportunity by allowing people to redeem their rights. This system not only secures future water allocations, but also increases token scarcity and value.
Additionally, a pure sense of investment is achieved through investments in water sources. This leads to potential financial returns and dividends by addressing the inefficiencies in water supply mentioned above. By investing to finance infrastructure projects, such as building factories and improving distribution systems, more water can be brought to communities, creating additional economic opportunities.
Monetizing water access through the C2B model, the “Burn to Secure” protocol, and investments in water sources all generate economic benefits for the community, promoting a more equitable and efficient water management system.
Overcoming challenges
While blockchain technology has the potential to improve water management, there are challenges to its adoption. The complexity of blockchain systems and the need for technological infrastructure can be barriers, especially in developing regions. Additionally, there are concerns about the significant energy consumption of blockchain networks. However, technological advances and the development of more energy-efficient blockchain solutions are helping to alleviate these concerns. Additionally, education and capacity building are key to ensuring stakeholders understand how to effectively use blockchain technology. Governments, NGOs, and private sector partners need to work together to provide training and support to communities and water management authorities.
Blockchain technology offers a practical and effective means to improve water management. In addition to addressing inefficiencies, blockchain empowers communities, promotes sustainable practices, and opens up new economic opportunities through models like community-to-business (C2B). As we face the growing challenges of climate change and population growth, blockchain is not only an innovative solution, but represents a fundamental shift in the way we manage and value water resources. Adopting blockchain in water management is essential to creating a sustainable and equitable future by changing the way we interact with and protect our most vital resource.
Jean-Hugues Gavarini
Jean-Hugues Gavarini is the CEO and co-founder of LAKE (LAK3), a real-world asset company leveraging blockchain technology to decentralize access to the global water economy. LAKE aims to ensure access to clean water for all, protect water resources, and deliver water to those in need through innovative technologies. Jean-Hugues has a diverse career spanning the luxury, fashion, and footwear industries. His career path includes notable successes at Mellow Yellow, Cremieux, and Tod’s. Raised between Silicon Valley and the French Alps, Jean-Hugues has always been immersed in technology and freshwater resources. In 2018, Jean became the CEO of Lanikea Waters, a water solutions entity based in the French Alps. In 2019, the concept of LAKE was born, embodying his commitment to innovation and sustainability.
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Blockchain and AI Expo 2024

With rapid advances in the world of AI and blockchain, there are opportunities to leverage the security and transparency features of blockchain to improve the reliability and trust of AI systems and data transactions.
Explore the synergy of these advanced technologies in virtual mode Blockchain and AI Expowhich takes place on October 31, 2024 TO 10:00 GMT.
The event features cutting-edge presentations led by leading experts in evolving fields. Presentations are set to explore opportunities and challenges in the fusion of blockchain and AI, real-world applications, ethics, innovations in environmental sustainability, and more!
Gain a comprehensive understanding of how these technologies can synergistically drive innovation, optimize operations, and promote strategic growth opportunities. Develop your knowledge to facilitate informed decision making and give your company a competitive edge in the growing technology landscape.
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Nigeria Eyes National Blockchain Nigerium for Data Sovereignty

Nigeria is keeping an eye on a new native blockchain network to protect the country’s data sovereignty.
According to local media, a team from the University of Hertfordshire has proposed the new blockchain, Nigeriato the National Information Technology Development Agency (NITDA).
Chanu Kuppuswamy, who leads the team, argued that relying on blockchain networks whose developers are located in other regions poses national security risks to the Nigerian government. He further said that Nigerium would allow the West African nation to customize the network to meet specific needs, while also promoting data sovereignty.
In his presentation, Chanu cited the recent migration of Ethereum to test of participation (PoS) consensus as an instance in which no Nigerians were involved but whose impact is far-reaching.
“Developing an indigenous blockchain like Nigerium is a significant step towards achieving data sovereignty and promoting trust in digital transactions in Nigeria,” he said.
While receiving the proposals in Abuja, NITDA’s Kashifu Abdullahi acknowledged the benefits a local blockchain would bring to Nigeria, including increased security of citizens’ data.
However, a NITDA spokesperson later clarified that Nigerium is still at the proposal stage and that the government has not yet decided whether to proceed or not.
“The committee is still discussing the possibility with stakeholders. Even if a decision is finally made, there is no guarantee that the name will be Nigerium,” the spokesperson told the media.
Nigerium’s reception in the country has been mixed. Some, like financial analyst Olumide Adesina, To say the network is “dead on arrival”. He believes the Nigerian government’s poor record in following through on its big technology plans will claim another victim. He pointed to the eNaira as a missed opportunity whose chances of success were much higher than those of Nigerium.
Others welcomed the proposal. Chimezie Chuta, who chairs the renewed The Nigerian Blockchain Policy Committee is “extremely optimistic“that Nigerium will be more successful than eNaira.
Speaking to a local news agency, Chuta stressed that eNaira failed because the central bank initiated the project on its own, without involving any stakeholders.
“They just cooked it and expected everyone to like it. [With Nigerium]there will be a lot of collaboration,” he said.
Registration of property title, digital identity and Certificate Verification are among the use cases that Nigerium is expected to initially target. However, Nigeria has already made progress in some of these fields through public blockchains.
SPPG, a leading school in governance and politics, announced in May the country’s first blockchain certificate verification system. Built on the The BSV BlockchainIt was developed in collaboration with the blockchain data recording company VX Technologies and local lender Sterling Bank.
Watch: The Future Has Already Arrived in Nigeria
Italian: https://www.youtube.com/watch?v=M40GXUUauLU width=”560″ height=”315″ frameborder=”0″ allowfullscreen=”allowfullscreen”>
New to blockchain? Check out CoinGeek Blockchain for Beginners section, the definitive guide to learn more about blockchain technology.
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Cambodian CBDC Developer to Build Palau Bond Market on Blockchain: Report

A Japanese fintech developer will build a blockchain-based bond market gateway for Palau, aiming to launch a trial in 2024 and a full launch the following year.
Japanese fintech developer Suramitsubest known for developing a central bank digital currency (CBDC) for Cambodia, is intended to build a Blockchain-gateway to the bond market based on the Pacific island nation of Palau, Nikkei He learned.
Soramitsu won the contract and plans to introduce the market on a trial basis in fiscal 2024, with a full launch scheduled for the following year, allowing the Palauan government to issue bonds to individual investors and efficiently manage principal and interest payments, according to the report.
The total cost of the project is estimated at several hundred million yen ($1.2 million to $5.6 million), less than half the cost of a non-blockchain alternative, people familiar with the matter said. The project has reportedly received support from Japan’s Ministry of Economy, Trade and Industry, with Japan’s foreign and finance ministries providing strategic and management advice on the project.
Soramitsu’s successful development of Cambodia’s CBDC in 2020 has boosted its reputation, with the digital currency’s popularity soaring, with over 10 million accounts opened by December 2023, representing 60% of Cambodia’s population. Following this, Cambodia’s central bank governor Chea Serey indicated intends to expand the reach of its CBDC internationally, particularly through collaboration with UnionPay International, the Chinese card payment service, and other global partners.
While Soramitsu’s work in Cambodia has been well received, the long-term popularity of CBDCs remains to be seen. As of late June, crypto.news reported a sharp drop in activity in India’s digital currency, the e-rupee, after local banks stopped artificially inflating its values.
According to people familiar with the matter, the Reserve Bank of India managed to hit the 1 million retail transaction milestone last December only after the metrics were artificially infiltrated by local banks, which offered incentives to retail users and paid a portion of the bank’s employees’ salaries using the digital currency.
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