WHAT IS BLOCKCHAIN
A blockchain is a decentralized, distributed ledger that records transactions on multiple computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the consensus of the network.
At a high level, a blockchain works by allowing a network of computers to reach consensus on the state of a shared digital history. Transactions are added to the history as “blocks,” which are then cryptographically linked to the previous block in the chain. This creates a permanent, unalterable record of all transactions that have taken place on the blockchain.
TYPES OF HACKS
There are many different types of hacks that can target blockchains and cryptocurrency systems. Some common types of hacks include:
- Cryptocurrency exchange hacks: These attacks target cryptocurrency exchanges, where users can buy, sell, and trade cryptocurrencies. Hackers may try to steal user funds, customer data, or both.
- Wallet hacks: Wallet hacks target the software or hardware that is used to store cryptocurrencies. Hackers may try to gain access to a wallet and steal the funds it contains.
- Smart contract hacks: Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. Hackers may try to exploit vulnerabilities in smart contracts to gain unauthorized access or steal funds.
- 51% attacks: A 51% attack occurs when a group of miners controls more than 50% of the mining power on a blockchain network. This allows them to potentially reverse transactions and double-spend coins, effectively stealing from other users on the network.
- Sybil attacks: A Sybil attack involves creating multiple fake identities or nodes on a blockchain network in order to gain a disproportionate amount of influence or control. This can allow attackers to manipulate the network or steal funds.
- Phishing attacks: Phishing attacks involve tricking users into revealing sensitive information or installing malware by disguising the attack as a legitimate request or communication. This can be used to gain access to wallets or other sensitive information.
THE LIST OF HACKED BLOCKCHAINS
While blockchains are generally considered to be secure, there have been instances where they have been successfully hacked. Some examples of hacked blockchains include:
- The Ethereum DAO hack: In 2016, a hacker exploited a vulnerability in the Ethereum decentralized autonomous organization (DAO) and stole approximately $50 million worth of Ether.
- The Parity Wallet hack: In 2017, attackers exploited a vulnerability in the Parity Wallet contract and stole over $30 million worth of Ether.
- The Binance hack: In 2019, hackers accessed the Binance cryptocurrency exchange and stole over $40 million worth of Bitcoin.
- The Coincheck hack: In 2018, hackers accessed the Coincheck cryptocurrency exchange and stole over $500 million worth of NEM tokens.
- The Mt. Gox hack: In 2014, hackers accessed the Mt. Gox cryptocurrency exchange and stole over $450 million worth of Bitcoin.
In conclusion, it is important to note that while these hacks were successful, they represent a small fraction of the total number of blockchain transactions that have occurred. The vast majority of blockchain transactions are secure and have not been hacked. However, it is important for blockchain users to be aware of the potential for hacks and to take steps to protect their assets, such as using secure wallets and enabling two-factor authentication.