Here’s a short article I wrote for job application a while back. Hope you enjoy!
Cybersecurity Practices for Electronic Auctions
Electronic auctions, or e-auctions, have gained popularity due to their relative ease over traditional auctions. With auction-related fraud among the most common forms of fraud in the USA (Chen, 2022), e-auction platforms require special protocols to prevent malicious behavior from both bidders and sellers. For example, auctioneers may collect bids without delivering the product for sale, or bidders may collude to gain an unfair advantage. Here are three principal security principles for maintaining fairness in e-auctions:
1) Consumer Privacy
Personal data, such as bid amounts and payment information, are often collected and processed during the auction process. E-auction platforms must have strong privacy policies to prevent the misuse of this information.
2) Zero Trust
Zero Trust frameworks assume that every user, device, and network connection is potentially untrustworthy. In e-auctions, all parties involved in the auction – including the sellers, bidders, and even the auction platform – must be thoroughly monitored. By adopting a zero trust approach, e-auction platforms can ensure that only trusted parties can participate.
3) Decentralization
With decentralization, the control of the auction diverts from a central entity (i.e the auctioneer) to the network of bidders. This is important because an auctioneer may conspire with certain bidders for financial profit. The auctioneer may also access the personal data of the bidders, including the dollar amount of each losing bid. By eliminating the auctioneer from the equation, the risks of unfair middleman practices disappear too.
Applying these Principles
A modern challenge in the e-auction industry is to deliver a platform that satisfies all three principles simultaneously. A team of researchers from Chongqing University devised a blockchain-based framework using smart contracts and public verifiability to address this issue (Chen, 2022).
The setup replaces the auctioneer with a series of smart contracts to decentralize the auction network. Based on blockchain, these smart contracts are not only immutable, but also publicly accessible. If bidders become suspicious of unofficial communication, they can conduct an anonymous veto to block certain bids. Finally, the setup incorporates user privacy by concealing all bids unless a bidder reveals their bid voluntarily.
Conclusion
Zero trust, decentralization, and privacy are essential for conducting secure electronic auctions. With these principles in mind, auction platforms can ensure that all parties involved in the auction process are trustworthy and that personal data is protected.
References
- Center, C. C. (2015). 2015 Internet Crime Report. Retrieved from https://nsi.org/ReferenceLibrary/1265.pdf.
- Chen, B., Li, X., Xiang, T., & Wang, P. (2022). SBRAC: Blockchain-based sealed-bid auction with bidding price privacy and public verifiability. Journal of Information Security and Applications, 65, 103082. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S2214212621002635.