A strange thing came into notice of the security team at Coinbase last month that the blockchain of Ethereum Classic, one of the cryptocurrencies that individuals can sell and purchase using the popular exchange platform of Coinbase was under the attack of hackers.
Through the use and knowledge of the latest technological advancements, a hacker had somehow gained access to exercise his control over more than half of the network’s computing power. The primary motive of the hacker was to spend the same cryptocurrency multiple times. It was reported that the hacker had pulled cryptocurrencies of the net value of almost $1.1 million.
However, the statement of Coinbase claims that no coins were stolen from any of its accounts. But another famous exchange platform Gate was not as lucky as Coinbase which lost $200,000 to the hacker. However, an unusual incident that took place in the case of Gate is that half of the stolen amount was returned to the exchange platform by the hacker.
It is estimated that since the beginning of 2017 the hackers have stolen almost $2 billion worth of cryptocurrency. The hacking attack on cryptocurrency comes from both individual hackers and cybercrime organizations. The cryptocurrency is vulnerable to thieves because the blockchain is made secure by adding many complex protocols, but it has been seen that the more complex a blockchain system is, the more is it open to mistakes while setting it up. To secure a blockchain along with a protocol, a software client is also required which to some extent also contains vulnerability of getting hacked by experts.
The 51% attack on cryptocurrency is inherent as most of them are based on blockchains that use proof of work as their protocol. In the process of mining, nodes use a massive amount of computing powers to add information about new transactions. A miner having access to a majority of the networks mining power can carry out with his double spend. It is thus estimated that this attack of 51% shall continue because of the blockchain security weaknesses.
A smart contract bug is one of the implications of blockchain security weakness, that has been one of the primary causes of attracting hackers.
However many companies such as AnChain.in, Usankov’s Chain Security are developing artificial intelligence, auditing services, and smart contracts to secure the cryptocurrencies from getting hacked.