This Data Security Consultant Explains Why Businesses Should Embrace Web3 – But Do It Cautiously As more companies are looking to integrate blockchain technologies into their operations and join the Web3 rally, it is important to understand how to build these applications in a secure way that will protect both customers and data infrastructures

These dApps provide fantastic opportunities for forward-thinking companies to transform their business operations and enhance their efficiency.

A 2023 survey of 600 enterprise decision-makers in the U.S., U.K. and China found that nearly 90% of them deploy blockchain technology in some capacity, with 87% saying they planned to invest in blockchain in the next year. This reflects businesses’ fear of being left behind as blockchain developments accelerate globally. According to Deloitte, 73% of financial executives believe their organization will lose an opportunity for competitive advantage if they don’t adopt blockchain and digital assets.

Advocates of Web3 laud the decentralized web’s greater resilience and security compared to its predecessor, as blockchain ensures that every transaction is public and verifiable, improving record-keeping and data integrity.

However, despite the promise of blockchain’s greater security, the increasing adoption of Web3 technologies has not eradicated security risks, merely changed them: The 2023 Web3 Security Landscape report by Salus shows that cyberattacks on the Web3 industry resulted in losses in excess of $1.7 billion last year, highlighting the extensive range of threats within the decentralized world.

New security challenges

Web3 avoids some of the security headaches of Web 2.0 but introduces several new ones, almost all unique to the industry.

Some of the biggest attacks of the year included the $200 million attack on the cloud-based blockchain services provider Mixin Network; the $197 million attack on Euler Finance; the North Korea-linked Lazarus Group attack on both the Poloniex cryptocurrency exchange and Atomic Waller, stealing more than $126 million from the former and more than $100 million from the latter.

The majority of Web2 attacks target users. Most threats faced by the Web3 industry, however, take advantage of code vulnerabilities of decentralized applications and protocols.

Access control issues accounted for 39% of all Web3 attacks, whereas flash loan protocols, where flash loans are used to maximize the impact of another form of attack like the exploitation of smart contract bugs or the manipulation of cryptocurrency asset prices on an exchange, contributed to more than 16% of attacks.