John had been pouring all of his energy and effort into his Web3 startup for months, and finally, the day had come. They were ready for their first big product release, and the team had worked tirelessly to ensure everything was perfect. The day of the release, they hit a snag.
There was a vulnerability in their system that they hadn't caught. Someone had exploited it, and their entire database had been compromised. All of the data their customers had entrusted them with was now in the hands of hackers they couldn't track down.
John's company was done before it even started.
The cost of poor security can be devastating to Web3 startups. Without proper safeguarding of their systems and customers' confidential information, they risk being unable to recover from a hack or data leak. It's imperative, therefore that they focus on implementing key security practices, such as those highlighted in the recent Israel Crypto Conference.
The Israel Crypto Conference highlighted vital practices that Web3 startups should implement to ensure the security of their products and customers' valuable information. Below are the two key practices:
Startups in the Web3 space need to ensure they have multiple layers of security in place to safeguard their systems. This means not only securing their products and databases at the application layer, but also implementing security measures deeper within their infrastructure, such as at the machine and network levels. They should be prepared for attackers to target their infrastructure, and these attacks may be far more sophisticated than those aimed at the application layer.
One example of a technological solution for multiple layer security is integration with blockchain-based security solutions. These solutions work by creating immutable logs for every access to a database, and this can provide important insights into how attackers are targeting and exploiting a system. AI could be used in such a solution to help itself learn how to spot common patterns in the logs that suggest malicious activity.
Another example of a security layer is an "airgap," which is a physical isolation of a network from the internet. This layer is especially useful in protecting databases and other critical systems that contain sensitive data from being accessed or modified via the internet.
A startup's security is only as good as the skills of its internal team. With the rapidly evolving threat landscape and the increasing sophistication of attackers, it's essential for startups to have security experts on their team who know how to safeguard all systems on all levels.
One problem that startups may face in hiring security experts is that skilled professionals with extensive expertise in Web3 are often hard to come by. In this case, it's worthwhile for startups to engage with third-party security experts who can share their knowledge and assist in the optimization of their security systems.
There are numerous quantifiable examples that illustrate the need for startups to implement robust security measures. Here are three:
A survey of 368 executives in 2019 found that 31% of organizations had experienced a cybersecurity incident during the previous year that had disrupted their operations. A third of these reported that they had no BCP in place to guide their response to such incidents.
While not all startup founders are executives, their businesses could similarly be vulnerable to cyber attacks that can disrupt their operations. Any downtime will inevitably lead to a loss of customers, and thus revenue, for startups.
A recent survey showed that, on average, data breaches cost companies $3.9 million and can take up to 280 days to detect and contain. The reputational damage suffered by startups as a result of cyber attacks, particularly in the Web3 space, can take much longer to recover from than financial losses.
Recovering from a cyber attack can be costly for startups, particularly because it can result in significant operational downtime. In a recent report, it was found that the average cost of a data breach to an organization worldwide was $3.86 million. Part of this cost is due to the need to hire external security consultants to remediate the problem and restore systems to their pre-attack status.
The Israel Crypto Conference highlighted two key security practices that startups need to implement to safeguard their customers' confidential information and overcome the threat of cyber attacks. Startups should ensure that multiple layers of security are in place, and that security experts are on their team or engaged as third parties to assist in optimizing their security systems. By implementing these two steps, startups can minimize their risk of reputational damage, financial loss and disruption from cyber attacks.
Curated by Team Akash.Mittal.Blog
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