Web 2.5 is Approaching (and New Exploits, Too)

Mass adoption has been a cornerstone of the crypto industry for years. While everyone realized that the only way to make crypto flourishing is to provide its services and benefits for the widest audience possible early on, this was easier said than done due to the level of knowledge required to use the tech (which was a bit too high for normal people). But now, with the advent of Web 2.5 — a harmonious blend of Web2 and Web3 technologies, literally something in between Web2 and Web3 — that dream is closer to becoming a reality.

The Dawn of Mass Adoption in Crypto and the Convergence of Web2 and Web3

Web 2.5: The Best of Both Worlds

The core concept of Web 2.5 is ingenious in its simplicity: offer familiar Web2 services but run them on a Web3 infrastructure. This way, users can experience a user-friendly interface, while all backend operations happen on a decentralized blockchain network.

Imagine a banking app that's as sleek and user-friendly as any modern mobile app but operates on a blockchain, adding layers of security and decentralization. Or consider a mobile game with stunning graphics and tons of cool interactions, mechanics and seasonal activities, which also incorporates NFTs and smart contracts seamlessly. What about new fields? From delivery to handyman requests, from peer-to-peer sales to enterprise solutions like ERP or accounting services – everything became accessible for crypto developers.

New Possibilities, New Vulnerabilities

As avid supporters of all things crypto, we're always thrilled about new developments in this space. The fusion of the best elements of Web3 and Web2 seems like a perfect marriage, heralding what many begin to call "Web 2.5." However, like all technological leaps, this one comes with its own set of unique challenges and potential pitfalls. In the interest of full disclosure, it's our mission to highlight some of these challenges so you can navigate this evolving landscape more safely.

Unpacking Vulnerabilities: A Step-by-Step Dive into Web2 and Web3 Security Challenges

Web2's Achilles' Heel

We've talked a lot about the issues plaguing Web3, so let's switch gears and explore some of the problems inherent to Web2.

Have you heard about the recent successful attacks on banking systems and social network apps, which resulted in tons of private personal data being leaked? You may be scratching your head, wondering how this could possibly happen. After all, these companies invest heavily in creating isolated, secure environments for their data (Note: this is called “digital lake” in professional language). They have internal IT security departments and dedicate substantial budgets to ensure everything operates as it should. So what goes wrong every time?

Surprisingly, the most common cause of these data leaks is rather straightforward: in their quest to debug more efficiently, developers sometimes make log search tools, like ElasticSearch, directly available. Logs are technical records of sequences of events produced by both the system and its users. They help developers recreate a problematic situation to identify what went wrong.

A Double-Edged Sword

The utility of logs in debugging is undeniable. However, logs often contain more than just technical context; they can also hold sensitive information. Developers may overreach when logging data, making the tool not only useful for diagnosing issues but also risky in terms of security.

The situation becomes precarious when a log search tool like ElasticSearch, initially intended for internal use, becomes publicly accessible. To troubleshoot more efficiently, developers sometimes make this type of services available outside of an intendedly isolated digital lake. This opens the door for malicious actors — which is what we call hackers in the industry — to easily search through private customer data.

The First Line of Defense: Regular Scanning

The first mandatory action for any project, especially those incorporating elements of Web 2.0, is the regular scanning of publicly available resources. This could range from AWS S3 buckets to databases that are unintentionally exposed to the Internet. Such lapses can become entry points for malicious actors.

Moreover, it's crucial to monitor logs sent from the client side of an app to the backend. These logs can sometimes carry an overshare of information, making them potential hotspots for data leaks.

Web3 is Not Immune

Now, you may be wondering, "Does this apply to the Web3 world too?" Unfortunately, the answer is a resounding yes.

Remember the infamous Slope Wallet hack? Slope had been transmitting logs containing private keys (yes, private keys) to their backend, unencrypted. What ensued was the leakage of over 2,000 private keys belonging to Solana and Phantom accounts.

Initially, the Solana community was thrown into disarray, thinking the issue was a vulnerability within the blockchain itself. However, the problem lay not in the blockchain but in poor security measures regarding data transmission of the wallet.

Some Unanswered Questions

Now, if you're keen, you've probably noticed a curious detail: how did the malicious actor manage to collect such a vast number of credentials? It's hardly feasible to gather 200-400 credentials using a hacked hotspot at a crypto conference. Other methods would likely be even less efficient. So where was the attacker’s interception point?

As of now, this remains an unsolved mystery. However, if you've been following along, you probably have one or two speculative ideas about what might have occurred.

The Hidden Dangers of Hybrid Mobile Development

The Allure of Hybrid Technologies

Now let's dive into another exciting but fraught area: hybrid technologies for mobile development, like React Native and Flutter. The promise is alluring: a single code base for iOS, Android and even Web platforms, reduced development costs, and the ability to launch web logic with native feel. A single team can do the work that traditionally required crews of specialized iOS, Android, and web developers.

Sounds like a dream, doesn't it? But as they say, there’s no such thing as a free lunch.

The Hidden Trade-offs of Cost-Efficiency

Web2's user experience (UX) demands are undoubtedly high, prompting Web3 projects aspiring to transition into Web2.5 to explore cost-cutting avenues. One natural choice for these projects is the adoption of hybrid technologies, such as React Native and Flutter. This allows them to develop apps that run on both Android and iOS, thereby serving a larger customer base more efficiently. However, this approach comes with its own set of challenges and risks, particularly in the realm of security.

Why Big Players Are Moving Away From Hybrid Technologies

Companies like Airbnb have already made public their journey away from hybrid solutions towards native development technologies like Kotlin for Android and Swift/SwiftUI for iOS. While their reasons are varied and complex, security concerns do play a role in this transition. These native platforms offer more robust security measures, especially for end-line customer-focused applications.

Why Hybrid Stacks Are Risky Business

You may be unaware that these hybrid stacks are often not recommended for end-line consumer-focused apps. The reasons are numerous and often technical in nature.

Key among them are challenges in detecting rooted or jailbroken devices with acceptable accuracy. It's not just about device identification but about security. Rooted or jailbroken phones are fertile ground for exploits. While libraries to detect jailbroken or rooted devices in a React Native environment exist, they often lag in updates, rendering them ineffective. If you think this is trivial, remember that outdated security libraries are a hacker's playground.

Another aspect is the susceptibility of hybrid apps to reverse engineering. Unlike natively developed applications, these hybrid stacks are more exposed, making it easier for malicious actors to reverse-engineer your app, figure out how it works, and potentially exploit it.

A False Sense of Security

And what about securely storing client identification data? Using PLISTs? Not a good idea. PLIST files are easily accessible and editable. Keychain? It also may bring some unwelcoming surprises. Contrary to the popular belief, Keychain normally does not encrypt the stored data. All of this demands that you pay specific attention to parts where storing secure data logic is implemented.

But commonly used React Native libraries for secure data storage generally do not dive deep enough into the topic, giving the false promise to developers that everything is alright. This illusion of security is more dangerous than acknowledging your limitations because it lulls developers into complacency, leaving the door wide open for security vulnerabilities.

The Legal Ramifications

The inability to detect jailbroken or rooted devices doesn't only present a security risk; it also places companies in a precarious legal position. Some countries have regulations that hold app owners responsible if users suffer financial losses due to compromised devices, but only if the app didn’t warn the customer about potential risks of using jailbroken or rooted devices. In the financial sector, for example, detecting jailbreaks and root access is a routine security measure aimed at mitigating this legal risk.

The Unaware and the Unprepared

And that's just scratching the surface. Companies eagerly adopting these hybrid frameworks to launch their "super awesome app" might be wholly unaware of this intricate web of challenges. While it's not our aim to be doomsayers, awareness and preparedness are crucial in navigating the evolving landscape of Web2.5 and Web3 technologies.

There are layers of complexities and vulnerabilities that most organizations may not be equipped to navigate. A company might dive into hybrid technology with visions of a sleek, multi-platform app, only to find themselves mired in unforeseen security challenges.

So, as we edge closer to the reality of Web 2.5 and beyond, it's crucial for companies to understand the full spectrum of what they're committing to. Cutting corners here and now could lead to costly and potentially disastrous setbacks down the line.

The Backend Dilemma

The Cost-Benefit Analysis

The world of cryptocurrencies and blockchain is buzzing with the idea of offloading logic of the dApp to reduce transaction fees. Indeed, the concept sounds fantastic. Imagine pushing the business logic to your own servers and only uploading finalized batch data to the blockchain. The cost savings could be exponential, slashing commission fees by a factor of ten or more.

But There's a Catch: Security

Hold your horses, though. This approach may cut costs, but it swings the doors wide open for malicious actors. Financial institutions invest heavily in complex systems to process every transaction, under the watchful eye of an anti-fraud monitor. This layer of security is critical, especially when dealing with transactions that involve money changing hands.

In a blockchain ecosystem, every transaction can be traced and every message signature can be verified. This creates a security layer that makes it exceedingly difficult to forge transactions. However, if you're offloading processing logic and accepting messages from the client directly, you're moving into a realm where you have to place a significant amount of trust in those messages. This introduces a level of risk that can't be ignored.

The Bottom Line: Is It Really Cheaper?

The quality of fraudulent activity is evolving at a rapid pace, and the methods used by hackers are becoming more sophisticated. Offloading business logic to backend makes systems more vulnerable to such actors. To counteract this, you would need to invest in expensive anti-fraud monitors and beef up authentication procedures. Educating customers about potential fraud schemes would also become an ongoing necessity.

While offloading back office logic may seem like a cheaper alternative to using blockchain for every transaction, you need to consider the full scope of costs involved. Robust security measures are not optional; they are essential. By opting for this approach, you're trading off some benefits of the blockchain's inherent security for lower transaction fees. However, the hidden costs of enhanced security measures, customer education, and risk management could easily erode these initial savings.

Some Final Thoughts

The Importance of Transparency

Whoa, it’s been a long journey. We hope you’ve gained something valuable from this article and that it will prevent you from experiencing huge financial losses in the emerging Web 2.5 landscape. However, before you go, there’s a critical point that we must address—one that's easily overlooked in the frenetic dash towards mass adoption. It’s the very reason we initially gravitated towards decentralization and blockchain technologies: Transparency.

Today, many projects perform crucial calculations off-chain in a bid to deliver a smoother, more intuitive, and user-friendly experience. Yet, too often, the cost of this increased efficiency is the loss of transparency for the end user. By hiding these data in the backend, we risk taking a step back, reverting to the very centralized systems from which we sought to escape in the first place. This erosion of transparency may be incremental, but its long-term impact on the integrity of the space is indisputable.

Transparency isn't just a buzzword; it's the linchpin of trust between users and platforms. Trust, in turn, is the fundamental reason we're all here. It's the glue that holds the fabric of the decentralized world together. Thus, to compromise on transparency for the sake of marginal gains in processing speed or reduced costs is to betray the very principles that make decentralized systems valuable.

So, as we stand at the threshold of Web 2.5, a new paradigm that merges elements from both Web 2.0 and Web 3.0, let's remember to cherry-pick wisely. The goal shouldn't be to indiscriminately combine features but to integrate the very best of what each world has to offer. Web 2.5 should not be a Frankenstein's monster, stitched together from the less desirable traits of its predecessors. Rather, it should be a seamless blend, capturing the essence of community-driven transparency from Web 3.0 and the efficiency and user-friendliness of Web 2.0.

In conclusion, let's not let our enthusiasm for innovation lead us down the wrong path. The future of the internet—Web 2.5, Web 3.0, or whatever comes next—should embody the principles that brought us here: transparency, decentralization, and most importantly, trust.

And this is the way.