Is Blockchain Being Hacked?
One of the biggest benefits to blockchain technology is that it was considered impossible to break. Each block is added to the ledger and once added it is set in stone – a complete and immutable chain that records data accurately. That is, until it gets hacked.
If it gets hacked, all bets are off and what was once a valuable commodity will be intensely scrutinised in order to discern its real value. Computer technology has always been plagued by gaps in systems that allow hackers access and blockchain among many other things, sought to create technology that was impenetrable.
The all-important question is can it be hacked, and more specifically, is it already being hacked?
Is Blockchain Already Being Hacked?
Unfortunately, the answer is yes. Many cryptocurrencies are being attacked and hacked currently, with some more notably affected than others. In fact, a co-ordinated attack earlier this year allowed a massive theft to occur on Ethereum Classic ledger which meant that duplicate transactions were being set up.
These are known as double-spend hacks and allow the same cryptocurrency to be spent twice at the same time. The hacker had exploited a popular crypto exchange Coinbase and was using a window to gain access and manipulate the entire Ethereum Classic blockchain. Although Coinbase reported that no user funds were lost (it is the Coinbase go-to option whenever they’re hacked) the estimates are that it cost over a million dollars which was probably settled back into accounts by Ethereum Classic or Coinbase to avoid liability.
What Does Hacking Mean for Crypto?
Cryptocurrency is as susceptible to hacking as any computer system. As it grows larger it will attract more attacks. One of the main reasons Apple was known for not being “hacked” was because it didn’t have enough products in circulation to make it an attractive proposition compared to Microsoft products which were in abundance at the time. Nowadays, Apple is prone to hacking as much as any other tech giant and hackers now find it lucrative enough to invest time and energy exploiting Apple systems.
The same is true of Crypto, the more mainstream and sophisticated it becomes, the more it will find itself under attack. For developers, it is a big wake-up call that they need to put robust security systems in place to protect users. For exchanges, it suggests that they need to start investing heavily in security protocols. Otherwise, they will be footing big bills to protect user funds.
Is this a Bad Thing?
Initially this might seem like a bad thing, especially if the technology that was heralded as unsinkable (much like the Titanic) is shown to indeed be sinkable. But, without hackers, systems aren’t refined and improved at the rate that they need to be for progress to occur. It means that developers will have to now use their brains to come up with genuinely longstanding tech.
With the impending launch of Facebook’s Libra, regulatory scrutiny and hacking, it is time that existing cryptocurrency developers and users started putting on their serious faces. Problems are already happening; it will take a big effort and the great crypto community spirit to overcome them. Tokens like Bitcoin, Ethereum and Ripple will now need to really prove their value in this dynamic and fast paced marketplace, otherwise a new player built on security could easily oust them.