Blockstream Concede Vulnerability of Its Liquid Network to Hardware Backdoor

Blockstream, a bitcoin technology firm conceded that its Liquid Network is vulnerable to hardware backdrop. This was stated in an announcement by the firm after the revelation that certain Chinese-manufactured motherboards contain backdoors.

Blockstream in a recent announcement stated that there was a vulnerability that can allow an attacker to infiltrate their off chain bitcoin transfer system.

They noted in the release that during the liquid functionary server design process, the firm got to know that the threat of compromised hardware was a legitimate concern.

The Bitcoin technology company had to assemble components that include a proprietary key module connected to a server in designing the liquid network, a commercial second layer Bitcoin solution. A huge loss could be incurred if the private key data got leaked, through a backdoored computer chip.

Notably, when the liquid network is fully operational, blockstream intend to make it responsible for funneling a huge amount of Bitcoin BTC between different exchanges. The usual type of such transfer is done on-chain. However, the liquid network of blockstream could unwittingly expose the bitcoin ecosystem to a new attack vector.

Meanwhile, to pull off such an attack it requires sophistication, while a successful infiltration of the network through hardware backdoor, could aid state-sponsored hackers to exploit the vulnerability. The firm noted in the release that its motherboard was not compromised, however, they are not ruling out the possibility.

The blockstream network will take a precautionary step in commissioning a security audit of its hardware modules, to guide against malicious exploitation of the vulnerability of the liquid network. This is to determine whether they are at risk from Supermicro vulnerability that might have exposed around 30 U.S. companies which include Apple and Amazon, to Chinese spies.

Also, the firm would ship a sample motherboard to a third party security company for extensive examination. Further, the firm will continue its risk mitigation strategy for hardware threats through different techniques which includes increasing of the supplier diversity so that no single compromised vendor would adversely affect the liquid network.

Furthermore, blockstream concluded its announcement by stating that the firm believes that the Supermicro vulnerability if independently confirmed and if present on its servers, is mitigated by other aspects of the Liquid security design. And also, the company has the role of screening its hardware for threats and take a drastic step to mitigate the threat.

The blockstream’s liquid network is created to run on sidechains, allowing traders and market markers to move their bitcoin holdings instantly within the network. However, it’s still not proven yet.

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