Swirlds Seeks End to Financial Attacks

Startup Swirlds is promising better-than-blockchain technology for financial transactions.

A significant part of the local US finance industry will soon be relying on a new blockchain-like technology that promises to be more secure than its peers. New ideas are welcome right now. Financial organizations are in turmoil, juggling the fight against next-gen cyber attacks while introducing new systems of transactional record that must combat them. The fight is on and the bets are being placed.
In this case, the stakes are the defense of DDoS and other attacks against new distributed data consensus platforms that harness the power of peer-to-peer decision-making and record keeping -- those in cryptocurrency and finance by public applications such as Bitcoin and Ethereum, and in private banking networks such as
IBM Hyperledge
r.
Dallas-based
Swirlds
just closed $3 million in a seed round led by New Enterprise Associates that it intends to drive the growth of a patented technology model called hashgraph, which it claims surpasses other blockchains. Its designed to be theoretically faster than the Bitcoin or Ethereum models, but important in this context, stronger against cyber attacks than the private technology models
.
The really big problem here is that senior executives at banks have been, well, sharing too many cocktails at social gatherings, and implicitly trusting each other for way too long.
The technologies banks plan on using today have a leader model, that is, all information from a transactional peer group is fed to a single leader PC, which commands reconciliation, and then its mirrored back for update to all other members. Sure, everyone has a single version of the database truth at that point. But this model is inherently weak because the leader is an obvious target for DDoS attacks; any of the members know the leaders IP address and can then launch a malicious attack via a botnet.
Why would members launch such an attack? They could be disgruntled, they may work for another organization, they may be on someone elses payroll. But worryingly, the attack could come from someone outside of the group. A members PC could theoretically be exploited by someone external to the group who could then scoop authentication information and launch an attack on the leader without a members knowledge.
Mance Harmon, Swirlds CEO and co-founder, told Security Now, Banks want to implement leader-based systems, but they dont understand what it is that theyre trusting, and that is a false sense of security.
The effect of an ensuing DDoS attack could be dramatic. Current systems will replace the leader within a matter of seconds if the current one is compromised. But thats pointless because the new leaders IP address is still known to all the other members.
In an insidious case of follow-the-leader, the replacement leader is attacked (and replaced...) and a cascade continues until the peer group is destroyed. The importance of this is that any transaction of record is also destroyed too because it can no longer be trusted. And this attack could soon start as a relatively small disruption to a peer-based video game right across the spectrum to international stock trading and other time-sensitive financial transactions of high speed and high importance.
Swirlds has three patents and is looking to register three more. Its algorithm claims to solve these issues because the platform is based on consensus, that is, there is never a leader. But it faces a couple of disadvantages in the market. It acknowledges that there is its new code base to get used to. But more than that, banks are just not culturally ready.
Ive talked to some of the worlds biggest banks, and their responses have been we trust each other, so what we currently have is OK, I think they just dont understand the risks theyre facing, said Harmon.
Want to learn more about the tech and business cases for deploying virtualized solutions in the cable network? Join us in Denver on October 18 for Light Readings
Virtualizing the Cable Architecture event
– a free breakfast panel at SCTE/ISBEs Cable-Tec Expo featuring speakers from Comcast and Charter.
The first customer is the U.S. Credit Union National Association. It has 105 million members, and is launching an initiative called
CU Ledger
with Mountain West Credit Union Association and
Best Innovation Group
. Its an agreement Harmon says was won against IBM Hyperledger. But in a fledgling area, friends are important. In contrast, hes not ruling out an eventual partnership with IBM, depending on how well the roll out and results go. Certainly, he has a Swirlds SDK which could be used with the Hyperledger platform or others.
The technology could have widespread applications in other verticals which must track and record movement of information with perfect accuracy. Mance is understood to be talking about promoting Swirlds approach to contribute to a new international standard with a global advisory firm focused on security and risk management.
Perhaps surprisingly, Swirlds has created a distributed game for the upcoming
TechCruch Disrupt Hackathon
. Alongside the fronted midnight pizza and beer at the event, its an avenue to show the proposition to other industries.
We see a big play here for the gaming industry … where two players could be reaching for the same chest of gold at the same time. Who would get it? said Harmon. Exactly.
Related posts:
Equifax Breach Wont Be the Last or Worst
Debit Card Fraud Numbers Explode
Cybercrime Is North Koreas Biggest Threat
— Simon Marshall, Technology Journalist, special to Security Now

Last News
▸ ArcSight prepares for future at user conference post HP acquisition. ◂ Discovered: 07/01/2025 Category: security	▸ Samsung Epic 4G: First To Use Media Hub ◂ Discovered: 07/01/2025 Category: security	▸ Many third-party software fails security tests ◂ Discovered: 07/01/2025 Category: security

**Cyber Security Categories**
Google Dorks Database	Exploits Vulnerability	Exploit Shellcodes

CVE List

Tools/Apps

News/Aarticles

Phishing Database

Deepfake Detection

Trends/Statistics & Live Infos

Tags:
Swirlds Seeks End to Financial Attacks