Blockchain Designed to be Secure
Cryptocurrencies are digital assets that were designed to act as a method for exchange using cryptography innovation and remove the need for a middleman like the government or traditional banking systems.
With the assistance of blockchain innovation, digital currencies have been promoted to be a safer and more effective approach to making transactions. In a world where security and privacy are significant concerns, blockchain and cryptocurrencies present a unique way to make financial transactions anonymous, protecting a user’s identity and data
Quite possibly, the most exceptional feature of blockchain and cryptocurrency is its secure nature. Because of its decentralized nature, transactions using blockchain technology are transparent as everyone can access the blockchain (public blockchains).
Top 3 Crypto Hacks
However, while cryptocurrencies have changed the global finance payment system, it is not without problems. The anonymous nature of crypto-assets also means that criminals can hack into exchanges and steal coins without traces.
The industry has witnessed its fair share of hacks over the years. Here are three top cryptocurrency hacks or heists that have made a mark in the crypto sector.
Bitfinex isn’t a novice with regards to hacking assaults. In August 2016 around 120,000 Bitcoins were taken from the account of clients on the platform. Additionally, the crypto exchange announced a security penetration where 119,756 Bitcoin were stolen.
Before these assaults, Bitfinex and Bitgo made a multi-signature wallet framework where Bitfinex held two of the keys and Bitgo used the third key to co-sign exchanges. With this arrangement, Bitgo needed to approve transactions for Bitcoin to be moved from Bitfinex.
Although it was later reported that there were no indications of hackers penetrating the servers, clients were furious about the absence of countermeasures for transactions on the crypto exchange.
In 2018, the crypto exchange reported that the US government was able to recover around 28 Bitcoin while the rest was at that point, yet to be found. Then, around two years after the event (June 2020), someone sent 172.54 BTC tied to the hack, to an unknown address.
Coincheck, a Japanese crypto exchange, became the target of hackers on January 26, 2018. This assault brought about the exchange losing about $530 million worth of NEM tokens. When it occurred, the exchange halted deposits and withdrawals of NEM before reporting in a press release that hackers had carried off 500 million NEM tokens.
The exchange later found flaws in its security framework that permitted it to store all NEM tokens in a hot wallet without a multi-sign agreement. Coincheck vowed to compensate its clients affected by the hack while the developers labeled the tokens with the goal that other exchanges will not accept them.
As indicated by a report, programmers gained access to Coincheck systems by sending malicious files like Mokes and Netwire to Coincheck employees. The workers unintentionally installed the viruses into their systems which gave the programmers remote access to the systems.
Mt. Gox Bitcoin Heist
The Mt. Gox hack assault is considered the biggest crypto heist. Before going bankrupt, Mt. Gox was the go-to platform of all the Bitcoin exchanges between 2013 and 2014.
US developer Jed McCaleb established Mt. Gox in 2010, and in no time, in March 2011, the exchange suffered its first assault. In the primary assault, around 80,000 coins were taken while McCaleb was attempting to sell the exchange to Mark Karpeles, a French Bitcoin enthusiast.
In June 2011, the trade endured its second attack where McCaleb’s account was hacked and used to artificially drop the cost of Bitcoin from $17 to one cent. Immediately, around 2000 Bitcoins were purchased and moved out of the trade before anybody could notice the attack. But all these were just the tip of the iceberg.
A greater attack was in progress between 2011 to 2014 with more than 100,000 Bitcoin across 744,408 transactions gone along with $27 million in cash from Mt. Gox. This gigantic sum made it the biggest crypto heist ever.
As indicated by investigative reports, during the June 2011 assault, hackers could have gained access to the exchange’s unencrypted wallet.dat file. With this file, the hackers could siphon Bitcoins off the exchange without being detected. At the point when the assault was finally discovered in February 2014, around 650,000 coins were gone.
Most heists within the crypto space are not considered newsworthy due to their rampant nature. With each assault, blockchain developers create ways to further secure crypto assets and exchanges. Despite these measures, hackers develop new ways to manipulate the system and plunder a few coins for themselves.
Designers need to create an approach to mitigate crypto hacks and digital heists. Once this is achieved, more mainstream users will trust cryptocurrencies as a secure and trusted way to store and move money.