The loss of $2 billion in half a year, this horrifying figure comes from the digital currency .
Since digital currency along with the blockchain technology to produce since it was billed as security, privacy and convenience. Is the reality really as said? actually not.
Hacker “cash machine”
Some technologies can be product first, but the technology that comes with financial attributes must be safe. This is the unchanging truth of the steady development of the industry.
Ideal is full, the reality is very skinny.
According to the data provided by Tencent Security (as shown below), the hacking incidents related to encrypted digital currencies increased directly by about 5 times from 2013 to the first half of this year, and are expected to increase by about 10 times for the whole year, including this year alone. In the first half of the year, hackers’ attacks on encrypted digital currencies directly caused a loss of $2 billion.
What does $2 billion mean? According to today’s encryption currency tracking website CoinMarketCap data show that the current global digital currency market capitalization of $ 205 billion. In other words, it lost one percent of the market value in half a year.
Bitcoin Unlimited Coin Vulnerability
Since its birth in January 2009, Bitcoin has been promoted as the safest currency.
On August 15, 2010, someone found an astonishing transaction on Block 74638 of the Bitcoin blockchain. In this transaction, there were 184467440737.09551616 bitcoins, of which 92.2 billion bitcoins were sent. Go to 2 bitcoin addresses.
The root cause of this attack is that there is a large integer overflow vulnerability in the bitcoin verification mechanism. Since the large integer overflow is negative, all the nodes of the network verify the transaction of the hacker, which leads to the appearance of the bitcoin blockchain. A lot of bitcoin.
This BUG scared the Bitcoin code maintenance team at that time, so they had to re-examine their own security maintenance work, and never dare to slack off.
“51% attack” nightmare
In the May and June of this year, the “51% attack” nightmare, there are memories in the currency circle.
51% of the attacks mainly occurred in the crypto tokens with the POW as the consensus mechanism . After grasping the 51% computing power of the token network, these calculations were used to recalculate the blocks that have already been confirmed, so that the blockchain An act that produces a fork and gains an interest. The 51% attack in the currency circle, that is, the malicious miner controls most of the computing power in the network, and then enforces the fake transaction to transfer the token to his account.
In this attack mode, the hacker rewrites the transaction information on the blockchain by the absolute advantage of the computing power, completes the transaction twice with the same token, and steals the token in the trader’s hand through fraudulent transactions.
Nakamoto said in the BTC white paper that such attacks against blockchain characteristics can hardly be defended, and warnings can only be issued when the system detects a large amount of computing power to reduce losses. However, due to the large number of BTC mining, the powerful calculations made it difficult for hackers to overcome, so BTC has not encountered such attacks.
However, Bitcoin is not attacked, and other small currencies are inevitable.
The most obvious case is that on May 25, the token BTG was hacked, and over 380,200 BTGs were stolen in 3 hours, with a direct loss of $18.6 million. Prior to May 22, the anonymous coin Verge also suffered an attack, stolen more than 3,500, and the value of the lost token exceeded $1 million. This is the second time the currency has been hacked. On April 8, Verge was hacked and the $1.8 million token was looted within a few hours.
The exchange is hard to escape
The huge profit margin of digital currency has made all exchanges rushing forward, and hundreds of thousands of digital currency exchanges have sprung up.
The supervision of various countries is not in place, the review mechanism is not clear, and the procedures are simple, which makes many digital currency exchanges stunned by the immediate interests, completely ignoring potential security threats.
According to Tencent’s safety statistics, between 2013 and the first half of 2018, there were 54 security incidents in the encrypted digital currency market, of which 10 major security incidents were caused by hacker attacks.
In 2015, the Bitstamp exchange was hacked and 19,000 bitcoins were looted.
In 2016, hackers stole nearly 120,000 bitcoins in a short period of time based on a transaction vulnerability on Bitfinex.
In 2017, the Korea Exchange Youbit was hacked twice, and had to file for bankruptcy.
In 2018, the Currency Exchange was attacked by hackers. Since the currency security has paid attention to security protection, hackers can only benefit from short-selling means.
Although cryptocurrency is known for decentralization, today’s cryptocurrency exchanges are centrally operated and there are no specific regulatory measures. The lack of transparency and isolation of the exchange’s actions left room for black-box operations and insider trading. Moreover, the investors who created the exchanges were only profitable for a while, often reluctant to spend large sums of money to build security maintenance facilities, and also to hackers. Left a chance to take advantage of it.
The price fell after being attacked
Investors in the currency circle will find such a phenomenon that the price of digital currency will fall to varying degrees after each hacking.
In the 2015 theft, Bitcoin fell 40% in a few days, and the hacking incident in 2016 also caused Bitcoin to fall 20%.
The industry believes that the real threat to the digital currency market is not some small hackers, but a small number of hackers with fewer IQs. They don’t bother to smuggle small crimes, but prefer to find them. Vulnerabilities in smart contracts for exchanges, mining pools, and other small tokens to launch predatory attacks on Bitcoin and other encrypted digital currencies.
Some insiders also told reporters that some bitcoin funds do not rule out the manipulation of bitcoin value by hiring hackers, and ordinary investors can only hope for their own luck, and do not encounter large consortia that deliberately do evil.
For the average user, you can only choose a safer exchange and a more trusted wallet to store and use your digital assets to minimize security risks. In the end, it depends on whether the exchange is paying enough attention to security issues and is willing to spend money. On the other hand, it is expected that the blockchain technology will be on the right track as soon as possible, bringing a real security environment.
[su_quote]This article is writing on 17 Aug 2018 based on information available online & news portal. If you feel it’s outdated or incorrect, please write here to update it. Mail us: [email protected] Or Whatsapp Us- +13098896258[/su_quote]
The Information Presented Here Does Not Constitute Investment Advice Or An Offer To Invest. The Statements, Views, And Opinions Expressed In This Article Are Solely Those Of The Author/company And Do Not Represent Those Of Coinworldstory. We Strongly Advise Our Readers To Do Your Own Research (DYOR) Before Investing In Any Cryptocurrency, Blockchain Project, Or Ico, Particularly Those That Guarantee Profits. Furthermore, Coinworldstory Does Not Guarantee Or Imply That The Cryptocurrencies Or Projects Published Are Legal In Any Specific Reader’s Location. It Is The Reader’s Responsibility To Know The Laws Regarding Cryptocurrencies And Icos In His Or Her Country. Please Respect Your Country Law & Take Advice From Your Advisor .