Cryptocurrencies are often praised for their tamper-proof transaction records, powered by decentralized blockchain technology. Yet, despite the robustness of cryptographic protocols and consensus mechanisms, the security of crypto ultimately hinges on a much broader and older system: the internet itself.
As Maria Apostolaki, an assistant professor of electrical and computer engineering and member of the DeCenter steering committee at Princeton University, explains, “Public blockchains are designed to work on top of the internet, but the internet was not designed with security in mind.” This foundational mismatch opens the door to critical vulnerabilities—ones that don’t exploit flaws in blockchain code, but rather weaknesses in the underlying network infrastructure.
Apostolaki, who joined Princeton in 2022 after completing her graduate work at ETH Zurich, has dedicated her research to uncovering and addressing these systemic risks. Her peer-reviewed studies from 2017 and 2021 revealed three major attack vectors that leverage internet-level vulnerabilities to compromise cryptocurrency networks—specifically Bitcoin.
Understanding Network-Level Threats to Cryptocurrency
1. Partitioning Attack: Splitting the Blockchain
One of the most dangerous threats Apostolaki identified is the partitioning attack. In this scenario, attackers manipulate internet routing to isolate segments of the Bitcoin network. By diverting traffic, they effectively split the network into two or more disconnected parts.
When this happens, each isolated group continues to mine new blocks independently, creating multiple versions of the blockchain. Since Bitcoin relies on a single, universally agreed-upon ledger, this fragmentation undermines the entire system’s integrity. Although the network may eventually reconcile, during the split, double-spending becomes possible—allowing malicious actors to spend the same coins twice.
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2. Delay Attack: Invisible Disruption
Another insidious threat is the delay attack, where adversaries intercept and delay blockchain data without blocking it entirely. Unlike a full denial-of-service attack, victims remain connected but receive outdated or stalled information.
This subtle interference prevents users from seeing newly added blocks in real time. As a result, they waste computational resources mining on obsolete chains, reducing their chances of earning rewards and weakening overall network efficiency. Crucially, victims often don’t realize they’re under attack—the disruption is invisible.
These attacks exploit the fact that Bitcoin nodes rely on standard internet protocols to communicate. If key transit points (such as major ISPs or backbone routers) are compromised or manipulated, even well-secured nodes can be misled.
3. Perimeter Attack: Breaking Anonymity
While Bitcoin transactions are pseudonymous, they aren’t fully anonymous. The perimeter attack targets this gap by linking a user’s online identity to their real-world IP address.
By monitoring internet traffic at strategic network chokepoints, attackers can observe when a Bitcoin node broadcasts transactions and trace them back to a physical location or service provider. Once de-anonymized, a user’s entire transaction history becomes visible, exposing them to surveillance, targeted phishing, or even physical threats.
This type of attack doesn’t break cryptography—it bypasses it entirely by exploiting network-layer weaknesses.
The Root Cause: Internet Infrastructure Wasn’t Built for Security
The common thread across all three attacks is not a flaw in Bitcoin’s protocol design, but rather its dependence on an inherently insecure global communication system. The internet was originally built for openness and interoperability—not for trustless financial systems requiring high availability, low latency, and strong privacy guarantees.
Apostolaki emphasizes that “public blockchains inherit the vulnerabilities of the networks they run on.” This means that even if blockchain algorithms are mathematically sound, their real-world performance depends on the reliability and integrity of internet routing, DNS systems, and ISP behavior.
Building Resilience: Apostolaki’s Countermeasures
To combat these vulnerabilities, Apostolaki has developed innovative defenses that operate across network layers. Her approach combines network policy enforcement, modern hardware capabilities, and cross-layer monitoring to detect and mitigate attacks before they cause harm.
One key innovation is a secure overlay network specifically designed for cryptocurrencies. This virtual network sits atop the existing internet infrastructure but uses encrypted tunnels, trusted relays, and consensus-driven routing rules to protect data flow between nodes. It effectively shields cryptocurrency traffic from manipulation by malicious ISPs or state-level actors.
Such solutions represent a shift toward treating blockchain security not just as a software problem, but as a holistic systems challenge involving hardware, protocols, and policy.
Rethinking Internet Infrastructure Through Blockchain
Apostolaki sees cryptocurrency not only as a financial innovation but as a catalyst for reimagining core internet architecture. Just as renewable energy has driven upgrades to power grids, she argues that decentralized finance demands a more secure, resilient internet.
“Blockchains provide a strong incentive for researchers to rethink how we build and manage digital infrastructure,” she says. “They expose weaknesses we’ve long ignored.”
This perspective is shaping both research and education. This semester, Apostolaki is co-teaching an undergraduate course with Prateek Mittal, professor of electrical and computer engineering, focused on information security. The course explores a wide range of topics—including deep dives into blockchain-specific challenges at the network layer.
Students examine real-world attack models, analyze routing protocols like BGP (Border Gateway Protocol), and evaluate how decentralized systems interact with centralized network operators. The goal is to train a new generation of engineers who understand that security must be engineered from the ground up—not bolted on after deployment.
The Internet Is an Ongoing Project
“The internet is an ongoing project,” Apostolaki reminds us. “We need people to work on it. We need to think about the implications of recent trends on the internet, try to nurture it, and allow it to evolve as we go.”
As cryptocurrencies become more integrated into global finance, their security will increasingly depend on improving foundational technologies. From securing node communications to protecting user anonymity and ensuring ledger consistency, the battle for crypto security is being fought not just in code—but in cables, routers, and policy debates.
Frequently Asked Questions (FAQ)
Q: Can blockchain be hacked if it runs on an insecure internet?
A: While the blockchain protocol itself may be secure, running it over vulnerable internet infrastructure exposes it to attacks like partitioning, delays, and de-anonymization—none of which require breaking encryption.
Q: Are all cryptocurrencies equally vulnerable to network attacks?
A: Most public blockchains that rely on peer-to-peer communication over standard internet protocols face similar risks. However, networks using enhanced routing, private channels, or decentralized relays may reduce exposure.
Q: How can users protect themselves from perimeter attacks?
A: Using tools like Tor or VPNs can help mask IP addresses. Additionally, connecting through trusted relay nodes or privacy-preserving networks improves anonymity.
Q: What is a secure overlay network?
A: It’s a virtual network layer built on top of the internet that uses encryption and controlled routing to protect data flow—especially useful for securing cryptocurrency node communication.
Q: Does improving internet infrastructure benefit only crypto?
A: No—better network security benefits all online services, including banking, healthcare, and communications. Crypto highlights these needs due to its trustless nature and high stakes.
Q: Is complete decentralization possible without secure networks?
A: True decentralization requires both technical and infrastructural resilience. Without secure connectivity, even decentralized systems can be manipulated at scale.
The future of digital finance depends not only on smarter algorithms but on stronger networks. As research like Apostolaki’s demonstrates, securing cryptocurrency means securing the very fabric of the internet—one layer at a time.