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Relying on Centralized Databases Makes Dapps Vulnerable to Data Tampering Says Nate Holiday Skip to main content

Relying on Centralized Databases Makes Dapps Vulnerable to Data Tampering Says Nate Holiday

Decentralized applications (dapps) are prone to data tampering because they “are largely built on top of centralized databases and services,” the CEO of Space and Time Nate Holiday has said. The CEO also shared a list of data tampering risks which he said are specific to data warehouses.

Companies Relying on Centralized Databases and Services

According to Nate Holiday, the CEO of decentralized data warehouse Space and Time, the recent draining of funds on the defi (decentralized finance) lending platform Lodestar Finance, and Axie Infinity’s Ronin network attack before that, are key events reminding users that decentralized apps (dapps) are prone to data tampering. Although he concedes that many dapps are powered by blockchain, Holiday nevertheless claimed many of these applications “are largely built on top of centralized databases and services.”

As recently reported by Bitcoin.com News, the hacker behind the siphoning of $6.9 million from Lodestar Finance had tampered with “the exchange rate of the plvGLP contract.” The hacker then followed this up by supplying the plvGLP collateral to Lodestar and borrowing all the available liquidity.

Commenting on the recent data tampering incidents, Holiday said dapps, just like centralized business organizations, can have a single point of failure which makes them vulnerable to hacks. This in turn diminishes their appeal to users, Holiday argued.

“Data tampering can have catastrophic effects for dapp users. For example, if a decentralized finance application is leveraging a centralized database, data tampering. In the case of a decentralized social media platform, data tampering could lead to harmful impersonations or the spread of false or misleading information,” Holiday explained to Bitcoin.com News.

Single Point of Failure

Meanwhile, the Space and Time CEO also shared a list of data tampering risks that are specific to data warehouses and these include the hacking of centralized database systems and gaining unauthorized access. The use of SQL injection techniques to manipulate data, and tampering with the database structure or schema are the other risks.

When asked to explain why he advocates for decentralized blockchain-anchored data solutions, Holiday said:

“Decentralized architectures have no single point of failure, and blockchain anchoring ensures that the data is secure and immutable. This architecture provides an ideal solution for decentralized applications that require trustless interactions, such as those employed by financial services or supply chain management.”

While he is not anticipating a sudden switch to decentralized data services, Holiday insisted that “companies are becoming increasingly aware of the need to integrate blockchain data into their business models.” To aid such companies, the CEO said his company helps “enterprises to onboard data from the centralized databases powering their businesses.”

What are your thoughts on this story? Let us know what you think in the comments section below.

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