Ethereum Classic, one of the cryptocurrencies that people usually buy and sell using the famous Coinbase exchange platform, the history of all his actions, was under attack.
An attacker had obtained control of more than half of the network’s computing strength and used it to revise the transaction history. That made it possible to spend the same cryptocurrency more than once, usually called “double spend”. Coinbase claimed that no currency got stolen from any of its accounts. But a second famous exchange, Gate.io, revealed that it wasn’t such lucky, as it lost around $ 200,000 to the striker (which strangely, he returned half a day later).
In total, hackers have stolen almost $ 2 billion worth of cryptocurrency since early 2017, frequently from exchanges. These aren’t just opportunistic deserted attackers. Advanced cybercrime organizations are doing it too.
Blockchain professionals present a sustained understanding of all contemporary blockchain concepts, principles, applications and technologies. As companies have begun to build blockchain applications, the growth of these applications is the reason for the increasing number of blockchain platforms day by day. Blockchains are surprisingly attractive to robbers because fraudulent transactions cannot get undone. Moreover, blockchains have unique security features.
Hacking the Blockchain technology
A blockchain is a cryptographic database operated by an interface of computers, each of which reserves a copy of the most up-to-date version. A blockchain protocol is a set of commands that define how computers on the network, called nodes, must validate new transactions and sum them to the database. The protocol uses cryptography and economics to build incentives for nodes to work and secure the network rather than attack it for individual gain. If it gets configured correctly, the system can make it very difficult and costly to add fake agreements, but comparatively easy to verify correct ones.
It is what has made technology so engaging to many industries. Central banks are also now assessing its use for new digital modes of national currency.
Although the more complicated a blockchain system is, the more ways to make mistakes get built when setting it up. A company behind Zcash, a cryptocurrency that uses very complex math to enable users for making private transactions, unveiled that it had quietly solved a “subtle cryptographic flaw” unintentionally installed in the protocol. An attacker could have taken advantage of this to produce immense counterfeit Zcash. Luckily, no one seems to have done so.
The protocol isn’t the only thing that should stay protected. To trade cryptocurrency separately or run a node, a software client for running it is needed.
However, most of the current attacks that have captured the stocks weren’t attacks on blockchains solely but on exchanges, the websites where somebody can buy, trade and hold cryptocurrencies. And many of these crimes could be attached to poor underlying security practices. But after that, it got changed with the 51% attack on Ethereum Classic.
The rule of 51%
51% susceptivity to attacks is natural in many cryptocurrencies. Most of them get formed on blockchain technology that uses proof of work to check transactions. In mining, nodes use much computing power to show that they are reliable enough to add information about new transactions to the database. A miner who somehow gets control of most of the network’s mining power can cheat other users by sending them payments and then creating a substitute variant of the blockchain where the settlements never took place. This new version is known as a fork. The attacker who controls the mining power turns the bifurcation into the authorized version of the chain.
A blockchain, therefore, is a complicated economic system that relies on the changeable behavior of humans & people will always be looking for new ideas to operate with it.
In short, while blockchain technology gets praised for its security, but under certain conditions, it is much vulnerable. There is poor execution or involuntary software bugs. Now, as there are so many new blockchains, they use new techniques that would require highly-specialized quantum networks to hack.
Can Blockchain technology be hacked? was originally published in DataDrivenInvestor on Medium, where people are continuing the conversation by highlighting and responding to this story.