The blockchain technology which is the originator of cryptocurrencies was created to make it a better alternative to transacting with traditional banking systems, and it has proven to be a successful alternative. However, while the blockchain may boast about its technology as being untraceable, private and highly secure, among other features, there have been several issues involving the hacking of several ICOs and carting away lots of cryptocurrencies which belonged to different people. It was discovered that the hacks may have been possible due to negligence and carelessness, rather than the supposed laxness of the blockchain technology.
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With the hack stories that have made their rounds on various social platforms, it has contributed to the skepticism of prospective cryptocurrency users. Here are some hacks that have taken place in times past :
- Bitcoin
In 2010, a hacker who was looking for ways to gain access to the Bitcoin blockchain. The hacker finally found a backdoor in the form of bug in the Bitcoin system, and with the system comes an option of being able to create a single block off the Bitcoin blockchain. However, the bug was found and patched, but about $84 billion worth of Bitcoin was stolen. - Mt. Gox Hack
This is about the biggest cryptocurrency hack ever. In 2014, the Mt. Gox exchange was hacked, and $473 million worth of Bitcoin was stolen. It was so bad that the exchange ended up bankrupt as they were not able to recover from the loss. - Decentralized Autonomous Organization (DAO) Hack
In June 2016 there was a breach in the Ethereum code, and $50 million worth of Ether was stolen. This further led to the hard fork that took place in Ethereum, resulting in having Ethereum and Ethereum Classic. - Bitfinex Hack
This also took place in 2016, and the Bitfinex cryptocurrency exchange lost $72 million worth of Bitcoins to hackers. The hackers were able to pull this because they found a flaw in the exchange’s multisignature wallet. - Parity Hack
Like the multisignature wallet hack that happened to Bitfinex, the Parity hack was also via its multisignature wallet. The hacker was able to have access to digital currencies from ICOs of Aeternity blockchain, Casino, Edgeless, and Swarm City. A total of $32 million worth of Ether was stolen. - CoinDash Hack
In 2017, CoinDash had the worst moment, when it was hacked through an address posted on its website, the address was supposed to be a link for investors to exchange their Ether for CoinDash tokens. A total of $7 million worth of Ether was stolen. - Veritaseum Hack
This cryptocurrency was created to help developers build software to be used in decentralized capital market trading. In 2017, barely 2 months after the crypto’s ICO, some hackers were able to gain access to a wallet, and a total of $8 million worth of coins was stolen from the Veritaseum wallet.
Some other hacks include the ones that happened to Enigma, Tether, Bitstamp, Steemit, and Coincheck among others.
Over time it will be necessary to implement mechanisms of legal, fiscal and technology regulation within these platforms, to avoid scams or the use of cryptocurrencies in organized crime or money laundering, as pointed out by their adversaries, but it is very likely that the same system that finds them and suggests how to correct them, insofar as they appear, because security and trust are the basis of their existence, and it is the interests of all their users that are at stake.
To err is human and rectify is wise. The blockchain like any other human creation has its details, but the important thing is to minimize such errors, even more so when dealing with currency transactions. Although I believe that so far the percentage of hacks in the short history of cryptocurrencies has been very low.
Its publication is very interesting. Congratulations
Time is all, we have to keep our attention on everything
That's a interesting information...
I believe hacks like these play a big part in holding crypto back from further mainstream adoption.
This is interesting, I was actually considering throwing together a similar list.
Fyi, ICO means "Initial Coin Offering", when a new coin is introduced and first available to the public.
None of the items in this list involve ICOs. If any is interested in some ICO scams, here is a short list: