Economic Risk, Cyber Threats and Privacy Issues of Blockchain Technology in Nigeria.

International Journal of Research and Innovation in Social Science (IJRISS) | Volume VI, Issue I, January 2022 | ISSN 2454–6186

Economic Risk, Cyber Threats and Privacy Issues of Blockchain Technology in Nigeria.

Musa Ahmed Zayyad
Department of Computer Studies, Hassan Usman Katsina Polytechnic, P.M.B. 2052, Katsina State, Nigeria

Abstract
Blockchain technology and cryptocurrency are continuously becoming more popular all over the world, especially with the rapid popularity of access to the internet. It appears to be one of the most significant trends of the modern era. It is difficult nowadays to spend a whole day without coming across issues of cryptocurrency in the news, or social networking sites, broadcasts channels and even legislations made by various governments. The debate surrounding the subject is highly polarized, with strong feelings on all sides of the multifaceted cryptocurrency. Some call it a bubble, while others believe it has the potential to destabilize the economy of the world. Blockchain technology, which is the heart of cryptocurrency, has been described as a major disruptor of the global business process. Many entrepreneurs have jumped on the initial coin offering (ICO) bandwagon, selling tokens to the general public and raising hundreds of millions of dollars. Therefore, the aim of this article is to investigate the impact of cryptocurrency on the global economy risk and cyber threats and privacy issues with particular emphasis on a developing country like Nigeria.

Keywords– Bitcoin, blockchain, cryptocurrency, internet, technology

I. INTRODUCTION

Blockchain is a collection of records or transactions that are organized into blocks that define a portion of a ledger. The ledger is distributed among peers, who rely on it as a trusted authority to determine whether or not records are valid. Each block in the ledger is linked to the block after it, forming a chain, hence the name blockchain. Anyone can determine the status of an address by looking at the most recent blocks and their “parent” blocks. In the case of cryptocurrencies, we can calculate the worth of an address and track every transaction that leads to the creation of each contributing coin. It is critical to validate the transactions. Each node can independently validate the accuracy of each chain [1].
There are two types of Blockchain technology, which are known as permissionless and permissioned blockchain. Permissionless blockchains allow any party to participate in the network without any vetting, while permissioned blockchain is formed by an administrator or consortiums who evaluate an entity’s participation in the blockchain framework [2].
The business logic is encoded using smart contracts, regardless of the type of blockchain. Smart contracts are self-executing code on the blockchain framework, which enable straight-through processing, which does not require manual intervention to execute transactions. They rely on data from third-party entities known as “oracles” and can act on information associated with any public address or another smart contract on the blockchain,
While blockchain technology has the potential to increase efficiency and reduce costs, it also has some potential risks. In order to reap the benefits of this technology, businesses must first understand the risks and the appropriate safeguards. Furthermore, it is critical to comprehend the evolution of regulatory guidance and its implications [3]. Blockchain technology provides countless benefits to the progress of information technology. However, in order to utilize blockchain efficiently, it is essential to consider privacy and security concerns. Although it has a solid backbone of cryptography which ensures the data protection, however, security vulnerabilities are still the part of this system and they are continuously emerging [4].
This study is aimed at exploring the deep analysis of several blockchain applications and digital currency, related security concerns and weaknesses, known as vulnerabilities, future trend and possible solutions, which could provide the reliability of this technology.
A. Security Risk in Blockchain Technology
Any new technology’s adoption and operation is reliant on the proper management of the risks related with that technology. This is particularly true when the technology is more than just an application and is integrated into the organization’s core infrastructure. In the near future, Distributed Ledger Technologies (DLT) have the potential to be the backbone of many core platforms [5].
Security concerns such as fraud and theft of personal information by cyber criminals when users make online transactions, has increased the popularity of blockchain technology and cryptocurrencies such as “Bitcoins”. Reference [6] in their study stated that the averse usage of online banking by the users was as a result of hacking and cyber fraud. They further stated that deceitful behaviour such as phishing, in which sensitive information including passwords and credit card information are obtained illegally from users, led to them feeling more susceptible when transacting online. Security and privacy concerns such as these make cryptocurrencies a more feasible and protected option.

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