The Biggest Blockchain Industry Hacks in History
Whenever a new technology is about to launch, the developers and testing department make sure that they have imposed all the protection methods to secure it from hackers. Blockchain technology has numerous built-in security features, making it nearly impossible for hackers to attack. But still, there are chances that a hacker can take over a specific blockchain and steal tokens worth millions of dollars. However, there are various scenarios that make it difficult to hack blockchain as compared to other technologies. To increase security, cryptocurrencies utilize cutting-edge encryption techniques, open ledgers, and consensus procedures.
Despite its security potential, blockchain systems are a target for hackers because of their accessibility and decentralized nature.
Some of the attacks in cryptocurrency history that messed up the system include:
Mt. Gox
A Tokyo-based crypto exchange called Mt. Gox once managed more than 70% of all Bitcoin exchanges. The marketplace was hacked in 2014, thousands of Bitcoins were taken, and shortly the company went bankrupt. The largest Bitcoin exchange of that time suffered a massive blow and lost 85000 Bitcoins in no time. It was considered a major hack as the exchange was experiencing scrutiny issues for the last three years. Mt. Gox was unable to safeguard its complete blockchain exchange due to unmanaged security protocols. After the massive hack, all other blockchain companies and exchanges employed a lot of blockchain security experts to protect their systems from these attacks.
DOA Hack
A hacker stole almost 3.6 million ETH in 2016 by taking advantage of a bug in the decentralized autonomous organization’s (DAO) program that was created on the Ethereum network (worth millions of dollars). The attack caused the Ethereum network to a hard fork, resulting in the launch of Ethereum (ETH) and Ethereum Classic (ETC). In the case of a hard fork, both the existing and new blockchain works side by side. The attack was viewed as a legitimate yet unethical technique by some members of The DAO and the Ethereum network, while others called for the re-appropriation of the Ethereum and others asked for the dissolution of the DAO.
The Parity Hack
The Parity team published a “Postmortem” explaining what precisely happened and the measures they would take moving ahead. According to Parity, the entire ecosystem “needs urgently to have protocols and tooling to prevent such concerns from occurring again” as an outcome of the attack. Several decentralized organizations were using the Parity multi-sig wallet until a hacker discovered a weakness in its smart contract code back in 2017. Hacker stoke 153,037 Ethereum, worth millions of dollars at the time.
Sky Mavis
The first ever blockchain gaming scandal came from sky mavis. They are the creators of Axie Infinity, which is currently one of the most popular NFT games.
A hack that was carried out in March 2022 resulted in the theft of a staggering $625 million from the Ronin Network. The Axie Infinity ecosystem is being built and expanded using this blockchain.
The hacker gained access to the stolen funds via malicious nodes by using private security keys. As a result, money was sent to and received from the Ronin chain. Sky mavis’ IT team took almost a week to handle the situation and overcome the wrongdoings.
Who knows how long it would have taken for the resolution to be made if it weren’t for a random user trying to withdraw an additional 5000 $ETH? Luckily, the money was recovered, and Axie Infinity has reshaped itself.
Solana
Prior to the recent FTX tragedy, which saw millions of dollars erased from it, Solana was one of the most valuable tokens by market valuation. Back in 2022, when Solana was the talk of the town, a hacker used cunning means to compromise the blockchain.
In August of last year, over 7000 wallets worth $5.2 million were stolen. The price of Solana decreased significantly as the strikes were felt, falling by about 8% at the time.
The victims were users who kept their valuables in hot wallets, such as Phantom, Trust Wallet, etc.
A very popular blockchain is Solana. Games, NFTs, and dApps are created by groups and developers. Despite all the difficulties it has encountered, it has long been demonstrated to be a particularly promising blockchain due to the speedy process efficiency and the presence of interoperability.
Nomad
A gateway that enables the use of the interoperability model is Nomad. Transactions from many blockchains are possible. A $200 million was taken by hackers when Nomad Bridge was attacked. Prior to this hack, Nomad marketed itself as a blockchain solution for “safe cross-chain communication”.
After analyzing all these scenarios, everyone will be worried about how to trust some blockchains as they can be attacked or hacked anytime and users can lose their investments.
These are only a few of the numerous attacks that have taken place over the development of blockchain technology. Despite these known vulnerabilities, the blockchain sector is still expanding and changing, and many industry experts think that as more people utilize blockchain technology, new safety precautions are developed.
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