Web3’s biggest security threat is a familiar monster — centralization
Not only are we quite centralized, but the degree to which this centralization is hidden makes it impossible to remain secure
Artwork by Crystal Le
In cryptography, there is a saying that “every secret creates a potential point of failure.”
For simplicity, this means that what you hide, like a password, is a target for theft — but so is where you hide it. To stay secure, you have to think about what you are protecting and how you are protecting it.
And what brought many of us to blockchain — especially cryptographers and developers — was the ease with which this problem could be solved. We had spent our careers building system after system to mitigate the centralized points of failure. Now, we could work with proactive security measures, go beyond handling reactive security crises, and create systems that work for every user.
A security element of blockchain not highlighted enough is how it protects the “typical” user, not just the perfect user. Perfect users change passwords every 28 days and remember to use a VPN for airport Wi-Fi; typical users use the same password for their social media and bank accounts. Typical users are not lazy — they are just not as familiar with best security practices or do not have the time to manage them.
Decentralization protects the typical user by default.
If a dapp was built on an established and secure blockchain, they could trust it would continue running as long as the chain published blocks and the smart contracts were valid. If they download a self-custodial wallet, they can trust that the ability to use the funds contained within it is only available to them as long as they keep their key private. Decentralization was the feature to look for when using a crypto or blockchain dapp or platform, and it was easy enough to vet.
I use the past tense here because our security, as a sector, has severely regressed. Not only are we quite centralized, but the degree to which this centralization is hidden makes it impossible for even a perfect user to remain secure. These points of centralization are new and intentionally built by some companies that desire ownership and control. They represent the biggest security threat to digital assets that nobody is talking about.
If you do not believe me, consider this: Today, a single protocol owned entirely by a private company is the linchpin for how millions of wallets and their blockchains communicate. Today, employees working for layer-2 blockchains can stop a chain from processing blocks by simply pausing their sequencers. Today, millions of dollars of DAO treasuries can be spent without a single community vote.
Read more from our opinion section: Crypto crime is too easy
These are the kind of designs that make the infamous rollback of “The DAO” look trivial in comparison. More seriously, these vulnerabilities represent the kind of centralization we joined Web3 to dismantle. And they are being built on purpose.
Worst of all, the responsibility remains on the users’ shoulders to do their own research. The argument is they can simply stop using any dapp or chain that doesn’t meet their personal threshold for decentralization and risk. But this is not easy to do either. In what seems to be a trend of “informed centralization,” this information is stored away in terms and conditions or restricted as proprietary information. How does this environment serve any user, much less a “typical one?” It does not.
To move Web3 forward, we must quickly adopt best practices that keep more than just our users accountable for risk. Our accountability must be public and verifiable by design. We could start by open-sourcing critical infrastructure so no single company or entity can control it, by pushing for a governance standard where activities like block “pauses” and treasury spends are recorded (if not executed completely) onchain, and by rediscovering a tradition of calling out bad behavior by naming the perpetrators of centralization, not its victims.
During a security crisis, it is the tendency of all users (even the perfect ones) to find a scapegoat and pin the failure on them. Our sector is no different.
While our tradition of personal responsibility (“not your keys, not your crypto”) is admirable, it is not a fair standard to hold all our users to, nor does it adequately protect any of us. We were all typical users once — if we want a billion more of them to join us anytime soon, we must take action.
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