The largest cryptocurrency exchange in the world, Binance, acknowledged two days ago that the steal of about $100 million worth of bitcoin from its blockchain bridge operating on the BNB chain had caused a double blow to its blockchain (earlier known as Binance Smart Chain).
A device that is transfer cryptocurrency across several blockchain-based applications is a blockchain bridge.
But Binance’s issues didn’t stop there. Later, the hacker also withdraws two million BNB tokens around $570 million, BNB Chain revealed.
BSC Token Hub is the bridge between BNB Beacon Chain (BEP2) and BNB Chain (BEP20 or BSC).
— CZ 🔶 Binance (@cz_binance) October 6, 2022
The current impact estimate is around $100m USD equvilent, about a quarter of the last BNB burn.
— CZ 🔶 Binance (@cz_binance) October 7, 2022
With several countries tightening their laws on cryptocurrency trading, some, like India, charging heavy taxes on earnings, and some asking for an outright ban on cryptocurrency, this year has been exceptionally difficult for cryptocurrency exchanges globally.
Without a question, blockchain technology’s premise is revolutionary since it provides the opportunity to do away with intermediaries like banks. However, d Decentralization has its own set of drawbacks, including high energy prices, slow speeds, and of course
Decentralization has its own set of drawbacks, including high energy prices, slow speeds, and of course
Although blockchain projects are known to be very secure, many attacks this year revealed vulnerabilities in the system’s defenses. According to blockchain analytics company Chainalysis, bitcoin users have had over $1.6 billion worth of cryptocurrency stolen from them in 2022.
Six of the top seven biggest cryptocurrency breaches to date have occurred in the last two years, with Binance ($570 million, 2022), Poly Network ($611 million), and Ronin Network topping the list with $625 million each.
Are crypto blockchains impregnable?
It is very important to understand the difference between cryptocurrency and blockchains. A decentralized use case for the latter is the former. In simple terms, crypto is a minor but important component of what blockchain enables.
Cryptocurrencies use cryptography, which is a decentralize digital asset, to provide safe transactions between various parties. These transactions are records and stored in a blockchain, a type of digital ledger.
Although blockchains are almost resistant to hacking, there are still vulnerabilities outside of these digital ledgers that present chances for criminals, especially when it comes to cryptocurrency transactions and wallets.
It is not impossible for hackers to access cryptocurrency owners’ wallets and use their private key, a kind of password that is required to sign transactions and establish ownership of a blockchain address, to steal cryptocurrency, as has been seen in several attacks over the years.
Hackers can hack a blockchain using a “51%” method. Theoretically, hackers might take over a blockchain by controlling the majority of its hashrate, or amount of processing power. They can launch a modified blockchain if they control more than 50% of the hashrate.
This enables them to modify transactions that the blockchain had not yet confirmed before they gained control. It is quite challenging to carry out in practice although this kind of attack sustains positively.
Massive attacks like the one last week don’t reflect well for the crypto community, though, since they scare away investors, especially as central banks across the world tighten their regulations on cryptocurrencies.