Wednesday, August 21, 2019

‘Secure and Unhackable’ Blockchain is Already Getting Hacked and Looted

Lauded for its security and transparency, the blockchain technology has been touted as the most secure development to hit the technological space, but could there any be truth to this?

Evolving Technology, Evolving Crime

The conundrum of crimes and counter solutions to absolve the society of them has been a difficult one to crack, ever since the time of the bitten apple: crimes just keep evolving with every genius counter solution.

The advent of decentralized ledger technology turned the table, and dealt with crimes and hacks in an entirely different way: if trust was the one commodity that was hard to come by in previously established systems combating attacks, then we could as well eliminate the need for trust in the first place. A trustless system, immune to manipulation by one individual party, yet speaking the language of the majority, a trump card to ousting out criminals.

However, like all evolution of evil alongside good innovations, the strength of the blockchain system might just be its Achilles heel.

The 51% Take-Over

In a less comedic script ripped out of popular, hilarious TV show Silicon Valley, we found out how possible it is to take over a blockchain by exercising more than 50 per cent of its computing power. One thing Silicon Valley proved: a blockchain hack is possible, but quite expensive.

Up until now, the prospect of hacking a decentralized database had been mainly theoretically possible; it had been impossible to imagine a successful attack on a blockchain a year ago. However, evolution happens. And bad methods evolve too.

blockchain

While exchanges have been the one taking the brunt for crypto hacks and heists pulled off to cart away virtual coins from wallets, the latest attack that happened on Coinbase did not target wallets at all, and no matter how twisted the allegations are, Coinbase was not at fault: the ‘unhackable’ blockchain technology was simply beaten.

Related Article:  Bitcoin ATMs Become Major Target As Hack Tool Gets Sold On The Dark Web

Coinbase released a report detailing the attack and explained how the attacker stole funds of more than $1 million without actually stealing the coins itself: he simply rewrote Ethereum Classic history of transactions stored on a blockchain.

As reported, the attacker gained enough computing power and rewrote the blockchain to allow ‘doublespends’ of the same coin. The attack was equally repeated on Gate.io, another popular exchange, where the humorous attacker strangely returned half of the stolen funds.

The Minions are At Risk

The notion that blockchain is ‘unhackable’ cannot be more wrong, and the crypto community should begin to pay more attention. Ethereum Classic becomes the first crypto coin in the top 20 to be ‘hacked,’ and lesser coins down the list are far more susceptible. It is no surprise that coins like Vertcoin, Verge, and Monacoin have also been looted after the ‘majority-say’ was hijacked.

If blockchain must gain mainstream adoption, it must begin to quickly outgrow its nascent buds.

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