Security Issues: The Contradictions and Challenges of Decentralization and Centralization

Security issues are undoubtedly one of the most关注话题 in the blockchain industry in the next decade. In both decentralization and centralization directions, security faces different challenges and contradictions. This article will delve into this issue from several perspectives, including asset autonomy, smart contract security, censorship resistance, and wallet security.

The Double-Edged Sword of Asset Autonomy

Decentralization systems are clearly superior to centralized systems in terms of asset autonomy, allowing users to fully control their assets. This characteristic became a mainstream narrative during the DeFi boom and triggered a massive "withdrawal movement."

However, as incidents such as attacks on smart contracts and authorization thefts of coins become more frequent, people gradually realize that greater asset autonomy does not always equate to stronger security. For ordinary users, recognizing risks and securely managing assets on-chain requires quite a high level of expertise and experience, which inadvertently raises the threshold for self-managing assets.

Therefore, many new users entering the market still tend to entrust their assets to exchanges or institutions, hoping that professionals will handle it. Although this practice results in a loss of asset autonomy, it trades for the custody services provided by centralized institutions.

Currently, exchanges and on-chain systems primarily serve different user groups, each with its own forms of risk. On-chain self-management of assets grants users 100% ownership of their assets, but requires a high level of experience and risk management skills. In contrast, entrusting management to exchanges is simple and convenient, but may face risks of Decentralization. There is no perfect solution; the key lies in understanding where the risks are and staying vigilant.

Smart Contract Security: Risks in the Unknown

From the perspective of DeFi projects, non-upgradable and permissionless smart contracts are considered decentralized and immutable. However, this does not mean absolute security. Due to the inherent risks in the code of smart contracts that are difficult to fully anticipate and simulate, if a key smart contract has a critical vulnerability and cannot be centrally intervened, the consequences could be disastrous. There have been multiple such cases in the early days of DeFi.

The development trend of smart contract security in the future may be: simple smart contracts will first achieve "solidification" after being tested by time and the market, meaning they will be fully decentralized and immutable. Subsequently, the complexity will gradually increase. In this process, some complex projects may need to set up emergency mechanisms at critical points to respond to major events and reduce losses (usually controlled through various permission constraints to prevent risks brought by excessive decentralization).

The security of smart contracts must undergo the test of time and verification. Currently, the doubts about the security of DeFi are essentially questioning the future of the entire industry. The security issues faced by smart contracts are challenges that all on-chain projects, whether GameFi or SocialFi, will experience. DeFi, as a pioneer, has laid the foundation for future development.

Anti-Censorship: The Core Value of Decentralization

Resistance to censorship is an aspect that many people easily overlook, as most think they are simply engaging in basic cryptocurrency transactions, which seem far removed from the concept of censorship resistance. However, once experienced firsthand, one comes to profoundly understand the importance of censorship resistance. It directly makes one feel that without Decentralization, your assets do not truly belong to you. This is complementary to asset autonomy, and decentralized management indeed excels over centralized management in this regard.

Wallet Security: The Guardian of Private Keys and Permissions

When storing assets on the chain, we often encounter cold wallets, hot wallets, and hardware wallets.

A cold wallet refers to a wallet where the private keys are never exposed to the internet during the creation and management process. Users can create it themselves, such as by using an old iPhone to make a cold wallet. From a personal management perspective, this method has a high level of security; the only thing to be cautious about is properly storing the paper that records the mnemonic phrase.

Although hardware wallets are not equivalent to cold wallets, the generation of private keys also does not touch the network. The controversy mainly lies in the fact that the manufacturers providing the hardware are also centralized institutions, which may pose theoretical centralization risks. On the other hand, hardware wallets typically add a verification step before executing transactions, similar to the protective measures of USB keys or security cards.

Hot wallets are the most commonly used type of wallet for daily activities, offering greater convenience and flexibility. However, frequent on-chain interactions may increase wallet authorizations and signatures, especially if upgradeable contracts have been authorized, which could pose future security risks.

The use of wallets is usually configured based on individual circumstances, and its security essentially depends on the safety of the private keys and permissions.