As Blockchain Voting Rises, Security Risks Occupy Spotlight

The Intelligent Insurer #52 — Sophisticated technology introduces new asset protection concerns

The global adoption of distributed ledger technology (DLT) and blockchain solutions across different industries has continued to soar. Presently, blockchain is being used to solve one of the biggest problems in the history of democracy — voter fraud. However, while the revolutionary technology solves many problems, it also exposes users to new risks that governments are struggling to understand.

This week’s Intelligent Insurer highlights how blockchain technology is drastically changing the voting mechanism, promoting voter registration integrity, and reducing voter apathy. We will also highlight the risks that voters face when using such solutions and discuss possible solutions. Before diving into these issues though, we present the latest updates from our development team.

Insured Finance software development update

As we continue to work hard towards our mainnet launch, the Insured Finance development team is pleased to reveal that the INFI v.1.0 is now in beta testing. It has also deployed all smart contracts to the Mumbai testnet!

In the past week, we have worked to improve the functionality of our platform to boost user experience. To that end, we have integrated Hotjar for user analytics to give us a clear picture of improving our site’s user experience. We have also deployed fixes to minor bugs and updated some of our features. Below are highlights of some of these improvements:

  • You can now close popups by clicking anywhere outside them on your screen. This boosts site navigation.
  • The former insufficient fund error has now been replaced and will be displayed as “Transaction failed or timeout.”
  • The Terms & Conditions popups will now contain a link. This will automatically direct users to the T&C page.
  • We have added a currency selection placeholder.
  • We also welcomed new team members who will support our goal of providing users with the features they need. We are excited to see their contribution to the growth of our product offerings.

All these and more are what we had accomplished in the past week. As next week draws closer, we are eager to see our users benefit from these improved features and prepare for our mainnet launch. With the mainnet release scheduled to occur in this quarter, we will continue to rigorously test new features, while keeping user safety a paramount concern.

Blockchain increasing vote integrity and anonymity

Blockchain use in voting is increasing worldwide. As concerns about manipulated results and voter fraud have risen, governments are turning to DLT solutions to mitigate these risks. In March 2018, Sierra Leone became the first country to run a government election using blockchain technology. 70% of the votes cast used the blockchain-based voting platform, Agora.

The United States also trialed a blockchain electronic voting system in the 2018 midterm election in West Virginia and during the 2020 presidential election in Utah county. Both instances utilized the platform, Voatz. In November 2020, the Japanese city of Tsukuba integrated blockchain technology into a voting system known as “My number” to produce a transparent and reliable voting system.

The advantages of using such systems are numerous. Votes once cast are immutable and almost tamper-proof. Moreover, they grant a high probability of anonymity, thus reducing the prospect of voter intimidation and fraud. However, as the instances of blockchain use grow, experts have begun questioning the infallibility of DLT for voting mechanisms.

On September 8th, 2019, the city of Moscow used blockchain technology to record votes cast in city council elections. Unfortunately, the system was hacked and vote results were compromised leading one official to declare he would have won had the new technology not been used. Such claims are a nightmare to election officials and the general public’s relative ignorance about the blockchain’s inner workings can give such statements a veneer of truth.

Lack of understanding leads to security issues

The Moscow example is a perfect illustration of how DLT solutions can create new problems despite solving old ones. For starters, the private keys officials used to secure results were not complex enough, allowing hackers to enter the system. While there was no proof of voter impersonation, governments lack data to prove this possibility will never occur. A lack of technical understanding was the primary issue. However, blockchain’s intensely technical nature was also a roadblock since DLT systems aren’t easy to use for the uninitiated.

A recent paper authored by Park, Specter, et al, highlights how a lack of blockchain system data and testing is pushing voting processes into unknown and extremely messy areas. The authors suggest that blockchain creates more problems than it solves, even before considering the legacy tech that governments use to run their day-to-day operations. The intersection of legacy tech with blockchain leads to security loopholes.

Verifying voter IDs before casting votes is a good example. Most voter ID photos are outdated and verification layers might not recognize a person’s credentials. These systems can also be manipulated using AI face recognition tech by presenting a distorted picture that satisfies the verification system’s requirements. As a result, voter fraud remains a possibility.

Since blockchain data is immutable, there’s no way of deleting the fraudulent vote. Voter identity security is also under scrutiny. In the Moscow hack, malicious actors released data indicating the choice of everyone who cast a vote. Such data can be stolen and manipulated. Credit card theft, bank account impersonation, and other malicious acts become a reality.

Currently, there are no solutions to such issues beyond rigorously testing new systems. Novel digital asset insurance solutions might hold the key. With institutional and government presence on blockchain growing by the day, digital asset insurance is primed to become a huge industry.

For instance, Insured Finance users can protect their DeFI and crypto holdings and secure themselves against unexpected hacks and security incidents. While such solutions don’t lend themselves to voting integrity just yet, there’s no doubt that the industry will evolve. For instance, governments might utilize such solutions to incentivize voters to use the blockchain and secure data.

The possibilities are endless. For now, blockchain usage in voting presents many benefits but researchers are urging governments to thoroughly test systems before using them in critical elections.

About Insured Finance

Insured Finance is a decentralized, peer-to-peer insurance marketplace. Users can request customized insurance on a wide variety of digital assets, thereby ensuring full protection. Those fulfilling requests can earn premiums and earn a competitive return on their capital. Claims are fully collateralized and settled instantly.




A decentralized P2P insurance marketplace with easy claims and instant payouts. Powered by Polkadot.

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Insured Finance

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A decentralized P2P insurance marketplace with easy claims and instant payouts. Powered by Polkadot.

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