Blockchain Hacks On the Rise: Why CXOs Should Care?
According to a new report by Atlas VPN, blockchain wasn’t immune from cyber crime despite its speedy growth last year.
It’s no secret that 2020 was a challenging year for cybersecurity, driven by a rise in cyber criminals seeking to take advantage of the new normal both individuals and enterprises were getting adapted to. At the same time, it was a great year for cryptocurrency, with Bitcoin and other coins rising over the year, reaching new highs in early 2021, tied to an increase in large investors entering the space.
Using cryptography to secure data ledgers, blockchain is often said to be the most secure transaction system in the world. However, according to a new report by Atlas VPN, blockchain wasn’t immune from cyber crime despite its growth – a wake up call for businesses adopting the technology.
The report states that blockchain hackers stole almost $3.78 billion in 122 attacks throughout 2020. Last year, the attacked account for nearly a third of all-time hacked aimed at blockchain projects.
The data covers all the disclosed attacks aimed at blockchain projects, apps, and tokens. It also includes blockchain scams, which make up 13% of all blockchain hack events in 2020. And the most frequently breached blockchain target was Ethereum (ETH) DApps, as nearly 47 successful attacks were aimed at ETH DApps, and victims of the attack had to bear losses around $436.36 million or $9.28 million per hack.
If this wasn’t enough, Cryptocurrency exchanges were also highly targeted by hackers in the year 2020. Nearly, 28 cryptocurrency exchange breaches were reported, and the losses recorded at $300.15 million, which is approximately $10.72 million per hack.
The hackers also targeted blockchain wallets or digital wallets that allow crypto holders to store their cryptocurrencies. Cyber criminals instigate 27 successful attacks aimed at crypto wallets. Monetary losses are estimated to be $3.03 billion, which means that per hack is valued around $112.12 million. Due to the nature of blockchain wallets, it becomes the most promising target for hackers.
The year also saw 12 successful attacks launched at different blockchains. Cyber criminals bagged $5.91 million or $492,517 per breach.
Similar to ETH DApps, Tron DApps and EOS DApps also suffered from the attacks last year. Each type of DApps was breached three times. Tron DApp breaches cost victims $10 million or around $3.33 million per hack, while EOS DApps victims had to bear financial damages of $2.85 million or approximately $949,416 for each breach.
The report also noted two scams involving Ethereum-based tokens in the year 2020. However, it is not clear as to how much financial damage these scams have caused.
A report by MIT Tech Review notes that while “the whole point” of blockchain is to let people share valuable data in a secure, tamperproof way, the security of even the best-designed blockchain systems can fail in places where the fancy math and software rules come into contact with humans, who are skilled cheaters, in the real world, where things can get messy.
Even when developers use proven cryptographic tools, it’s easy to deploy them in ways that aren’t secure. While established systems like Bitcoin work and act as true examples of secure blockchain technology, they are also some of the most thoroughly tested. And experts also note that while a blockchain might be tamper-proof, it doesn’t exist in isolation. The system will connect with software and applications in the real world, opening up vulnerabilities in the supply chain.
Therefore, while blockchain is overall considered secure, it’s worth remembering that the technology is only as secure as the way it’s been developed and implemented.