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“Unhackable” Blockchains Powering Cryptocurrency Are Getting Hacked, Ironic!
Blockchains that power and ensure the security of cryptocurrencies were once hailed as unhackable, but that doesn't seem like the case right now. As per a report by MIT Technology Review, hackers have managed to steal around $2 billion worth of cryptocurrency since 2017. They pulled off these heists by targeting the unique vulnerabilities of blockchains.
In simpler words -containing sensitive information or cryptocurrency doesn't make blockchains more secure than any other storage solution. Recently, an attack carried out by a hacker, took control over Ethereum Classic's network and rewrote its transaction history. It enabled the hacker to "double-spend" cryptocurrencies, stealing around $1.1 million worth of cryptocurrency.
The “51 Percent Attack”
It is believed - factors that make blockchain technology so secure could also be the cause behind several unique vulnerabilities. This is a reminder that despite being touted to be very secure, cryptocurrencies can't entirely curb the issues faced by other banking systems.
Earlier, people with nefarious intentions had their crosshairs at exchanges, a place where users trade and keep cryptocurrencies. But that has changed after the Ethereum network hack. MIT Tech explained that by gaining control over digital currency's computing, the hacked was able to trick users by sending them payments. He then rewrote the existing blockchain ledger as a cover-up. This trick is called the "51 percent attack" which makes the new ledger act as the authoritative one.
While such hacks are extremely expensive to be performed on big cryptocurrencies, smaller currencies are cheaper and more vulnerable to such attacks. We might see more such 51 percent attacks on small digital currencies in the coming days.
Cryptocurrency Exchanges Are More Vulnerable
While most cryptocurrency frauds involve malware attacks that force targets into sharing their credentials, hackers have also become good at stealing the keys to a crypto wallet, the place where a person's cryptocurrency balance is stored in the blockchain. These attacks target exchanges and not the whole blockchain like the 51 percent attacks do.
Well, not everyone is ready to put up with such activities. Many startups are claiming to make blockchains more secure than ever and safe from hackers. Some of them are using AI to trace suspicious transactions, helping them to spot malicious activities. But as blockchain technology becomes more complex, hackers will be able to find more unique vulnerabilities.
Invest With Caution
Cryptocurrency is at an all-time high, and the rate at which it's gaining popularity, it's safe to assume that it will become a crucial part of the economy in the future. Bitcoin, Etherium, and most recently Dogecoin, are some of the popular names in the crypto segment. Influential figures like Elon Musk have also backed cryptocurrency trading, making them even more popular. However, Musk has also advised crypto traders to be very cautious with cryptocurrency investment.
As for cryptocurrency in India, the Indian Government has passed a bill in the Lok Sabha urged to ban cryptocurrencies in the country. But, a new bill on private cryptocurrencies is reportedly in the works and will soon seek the Cabinet's approval.