This article is a joint marketing piece with Cybernews, a research publication that specializes in cybersecurity-related news, opinions, and analysis. Cybernews’ reports have been featured by industry-related and global media publications such as Forbes, Mashable, and Lifehacker. This piece was authored by Laura Mogenyte, Content Manager at Cybernews.

Web3 is one of the most trending subjects today. An iteration of the next generation of the internet, the global community is feverishly working towards building apps and platforms that support this technology. At the same time, there is a flurry of interest by end users.

Bringing such attention, the next-gen structure of the internet is not only changing how the world will be able to interact and communicate, but it is also bringing about a change in how the existing security issues are being tackled.

But What is Web3?

Before we embark on seeing the current cybersecurity issues and what new ones may arise, we must understand what exactly is Web3.

While Web3 is an extremely broad implementation and it is difficult to pin down an exact definition (there are several different ones already proposed), the latest shift in technology has two lineages.

One refers to the interactive technology being used. Web1 was the first global network. Websites were static and there was little to no interaction possible between a platform and its visitors. A good example is a simple text-based news website.

This started to change in the early 2000s, with the rise of discussion boards, and social media platforms like MySpace and Orkut. People were able to interact with each other, post messages, and reply to them. The websites themselves had comment sections and used cookies to add personalization to the data displayed for each individual.

Web3 technology, though still retaining the basic interactive elements of Web2, is changing the interface. With VR and AR technology finally catching up, immersive living is becoming a reality: the metaverse.

Then there is the application of Web3 tech stacks in backend processes and infrastructure. The move to Web3 is a shift from centralization to decentralization. Instead of large corporations and firms holding data on their servers with users only being able to access their materials, Web3 enables  true ownership: user data is in control of the user. The data itself may or may not be stored within the devices of the users, but in Web3 only they are in control over it.

The most used technology for this shift is blockchain. With all data, even the platforms running on a multitude of nodes and hosts, this brings a fundamental shift in not only the technology but the associated security enhancements and risks.

Considering this is the aspect that connects with cybersecurity, let’s now see how it changes the digital safety systems of the data and people.

Pros of Web3 Cybersecurity

Web3 brings in a host of cybersecurity benefits, thanks to the use of blockchain, primarily. With the distributed ledger technology playing host to the next version of the internet, many cybersecurity benefits are the direct result of what blockchain brings to the table with itself.

• Increased Data Security: Blockchain is infamous for its data security. No central point of control or handling means that Web3 is going to be far safer to secure data as blockchain is resistant to hacking and other penetration attempts. With synchronized copies of the ledger distributed across computers, any manipulation will become obvious as it will not match with others. This is further enforced through different consensus methods such as Proof of Work and Proof of Stake that help make it infeasible and uneconomical to make such attempts.
• No Intermediaries: Since DLTs such as blockchain offer data transactions without a middleman, these weak points that otherwise can be susceptible/responsible for data leaks and hacks are eliminated. This also has the secondary effect of reducing the cost of transmission which further affects a price reduction for higher levels of security
• Better Privacy: Using advanced encryption methodologies, Web3 will offer a level of personal and corporate privacy that is far more advanced than traditional security. Interactions between users and platforms are direct, cutting out middlemen which would otherwise have access to the data. Within Web3, users are also in control of their data, and their right to share or keep it away from prying eyes is enhanced with military-grade encryptions run by blockchain networks. This means peace of mind to individuals and corporations alike. As long as they follow standard privacy steps like using good firewalls, services like NordVPN, and anti-virus in conjunction, it becomes near to impossible for prying eyes to see the data.
• Enhanced Data Sharing: Information, once written on the blockchain, is encoded with its hashcode. Any attempt to modify or alter it will change the hash. This provides proof that the data is original. Combined with decentralization, this means verifiable data can be easily shared across participants in a trustless environment.

Cons of Web3 on Cybersecurity

While Web3 comes with a host of benefits when it comes to cybersecurity, there are a few direct and indirect problems that arise from the use of decentralization. This puts enormous pressure on the cybersecurity industry to develop new means to control or avert any unfavorable incidents:

• Data Quality Validity: As immutable information, data written on blockchain is permanently written and cannot be altered. While this gives immense security and validity of data to be used, the entry itself can be dubious or lack proper research backing in the first place. Simply relying on entered data can lead to a false sense of security as it may not be authentic to begin with when appended on-chain. This may lead to firms and organizations relying on it to provide data-driven solutions that are not accurate. For firms relying on on-chain stored data, they will need to ensure that entered information itself comes from a reliable source, like reputable firms such as Accredify when added to blockchain.
• Innovative Exploits and Hacks: Blockchain and Web3 are more secure than Web2 and centralization, but these also come with associated risks. Vulnerabilities in smart contracts (small automated programs that run on conditional logic to execute commands without human intervention) are a nightmare for cybersecurity as weak points (both technical and data) can be exploited. The most used case of blockchain, which will integrate into Web3 automatically, is cryptocurrency. The high value is already becoming a hot spot for smart contract exploits. There have been 125 successful hacks in DeFi alone, with bad actors skipping away with more than $3 billion.
• Anonymous Bad Actors:  In a pure Web3 ecosystem, user identification is limited to their wallet addresses only. In any smart contract exploit, bad actors can remain unidentified and since it is a decentralized system with no central authority, it can become difficult to reverse the transactions or censor the wallets. This puts a lot of pressure on cybersecurity firms to design systems that make it possible to trace malicious people, but still retain a balance of privacy.
• Social Hacking: With Web3 still in its infancy, the general public is still to realize the associated security issues that stem from not the technology itself, but from a more human aspect. Weaker individual security (ineffective anti-virus, phishing, scams, rugpulls, etc.) is a larger issue as it revolves around how people secure themselves and industry/regulatory standards, not cybersecurity itself. Organizations who wish to use Web3 technology hence need to implement strong internal security protocols to protect their data from malicious actors attempting to penetrate their system through their employees.

Cybersecurity in Web3: The Way Forward

It is clear that where Web3 brings in more robust security by harnessing the power of blockchain, there are challenges that need to be addressed too. Criminals have become more sophisticated than ever. The cybersecurity world needs to rapidly adapt its standards to meet the evolving requirements of Web3.

At the same time, there should be a concentrated effort towards building a regulatory standard – if not at the governmental level, then perhaps a self-regulatory one. Web3 is all about information flow, decentralization, and privacy. While this is at the heart of it, regulations and standards shouldn’t come at the cost of privacy, centralization of control, or data protection.

The coming months and years are very interesting as Web3 will continue to challenge legacy systems on new security issues that require extremely well-thought-out plans to ensure the safety of platforms, and their users and at the same time be in line with existing regulations such as KYC and compliance to any new ones.