OpenBazaar, a Bitcoin-integrated decentralized e-commerce platform, is trying to surpass existing companies with Bitcoin’s unprecedented security measures and the multi-signature technology.
The rate of credit card fraud cases has significantly increased over the past few years. Major credit card companies and payment network providers have responded by creating chip-enabled EMV cards, which presents improved security protocols for consumers which reduces the possibility of card and transaction fraud.
With 88% of MasterCard credit and debit cards being protected by EMV chips, initiating physical theft and transaction fraud has become increasingly difficult for hackers. Recognizing the sophisticated security implementation behind EMV chips, hackers have begun to target more vulnerable and easier targets: e-commerce platforms.
Vulnerabilities of e-commerce platforms
Anything that is connected to the Internet is subjected to hacking attacks and security breaches. For consumer-based platforms and systems, it is important to implement the necessary steps in protecting user data and sensitive financial information.
The simplest way in dealing with personal data is eliminating it from the platform or the system’s database. If a database or server packed with personal information and financial data is connected to the Internet, there is that possibility of it being hacked or breached by hackers.
When consumers utilize credit cards to initiate transactions on e-commerce platforms like eBay, the platform is required to store private keys of credit cards in order to process the transaction. Those keys are stored in the private servers or database of the company. Once those keys become leaked, hackers can initiate a transaction elsewhere, leading to transaction and credit card fraud.
Considering the sophistication and complexity of modern malware, targeting e-commerce platforms will allow hackers to unravel financial information with significantly fewer resources. Targeting that one centralized database of a platform could earn hackers the private keys of tens of thousands of users.
Bill Zielke, Forter Chief Marketing Officer, stated in an interview:
“Fraudsters are moving towards the path of least resistance. There’s so much effort placed on the EMV rollout in stores. [Fraudsters] see the online space, where those same security requirements are not present, as a riper segment to go after. It’s about what’s easiest for the fraudster. If they can prey on that [online retail] segment, that’s going to be a better use of their time.”
OpenBazaar’s advantage
Here’s where OpenBazaar has a big advantage over existing e-commerce platforms. OpenBazaar, as a Bitcoin-based multi-signature-protected platform, doesn’t store any information of users. Thus, even if a hacker successfully penetrates the database of OpenBazaar, the private keys of Bitcoin wallets or credit cards won’t be released.
Even if the attacker somehow gets hold of the user’s private key for a Bitcoin address, the multi-signature technology will prevent the hacker from accessing the funds and moving them elsewhere.
As malware and hackers become more sophisticated and intelligent, e-commerce platforms must recognize and realize the danger in storing credit card information onto their platforms.