Can the Blockchain Be Hacked?
Blockchain technology has taken over the world since its conception in 2009. It is now being used outside of cryptocurrencies as a foundational mechanism in different industries and sectors for multiple use cases. This begs the ultimate question of security: can blockchain be hacked? It is commonly known as an “immutable ledger,” but does this mean an attack on a blockchain is impossible?
While blockchain transactions cannot be manipulated, blockchain assets can be stolen. This year, we have seen more blockchain attacks than ever, with hackers stealing upwards of $2 billion in cryptocurrency assets. So, the simple answer to the question, “can blockchain be hacked” is it is not impossible to hack a blockchain, but it is extremely difficult to hack one. Let’s understand how hackers operate.
How Blockchain Can Be Hacked?
Let’s take a few steps back and look at what a blockchain is. A blockchain is a digitally distributed public ledger that exists across a network, which means that it cannot be hacked in the traditional sense, where a hacker releases a code to take control of the assets. However, blockchain-adjacent networks such as cryptocurrency exchanges, smart contracts, and other decentralized finance (DeFi) applications are prone to attacks, which makes your blockchain assets vulnerable.
So, is blockchain hackable? By looking at the network individually, no, since the inherent concepts behind the blockchain make it almost unbreakable. That, however, does not mean your blockchain assets are 100% safe. Let’s look at the different ways through which hackers might access blockchain-adjacent networks for malicious intentions.
The Cryptocurrency Exchange
For anyone who might be a crypto novice, cryptocurrencies or other blockchain assets are traded on exchange platforms. Hackers can get access to these exchange platforms and networks, which is where most blockchain attacks originate. For a crypto asset like Bitcoin (BTC) that is traded on a decentralized platform, hackers do not have a central system to target, but an exchange platform provides an exposed “place” that allows them to steal the assets. Hackers often spot the vulnerability in a crypto exchange platform and use that to their advantage. They often practice the “rug pull” theory by convincing people to invest in an asset and then stealing their money through the exchange.
The 51% Attack
While attacks on crypto exchange platforms are growing and investors should be wary of them, they do not happen on the blockchain. So let’s talk about the one exception to a blockchain network’s ironclad verified ownership model, the 51% attack. The integrity of a blockchain network is supported by its community, and if one party gets access to a majority share, it would theoretically have the jurisdiction to interfere with the blockchain’s transactions. In theory, though, this isn’t easy to pull off since owning 51% of blockchain assets would be exorbitantly expensive. Nobody can fathom owning the majority share of Bitcoin or Ethereum in the world. Does this answer your question Is blockchain hackable?
A few years back, hacking could only be done through crypto exchanges, as we discussed when blockchain technology was still in its initial stages. However, the emergence of smart contracts has inadvertently provided hackers with new opportunities. Smart contracts essentially involve putting data and code executions on the blockchain. Their popularity has grown exponentially recently, with major blockchain assets like Bitcoin and Ethereum getting involved. So what’s the catch? If a hacker were to attack some aspect of a blockchain-adjacent smart contract, it would look similar to an attack on the blockchain itself.
The Human Element
We cannot talk about blockchain hacking without mentioning social engineering. If a person were to connect to random wifi in a cafe or restaurant somewhere, you could be surrendering your crypto keys to that network and accidentally allowing it to fall into the hands of fraudsters who would take off with your digital assets. However, this wouldn’t be a case of blockchain hacking; it would be due to human error. In a complicated system such as a blockchain, hackers would focus on targeting the weakest link – in this case, the human operator capable of messing up.
The Bottom Line
Now, if you were to read the news “blockchain hacked!” the news, you should know that it is one of the cases we discussed. While the blockchain network is an “immutable ledger,” its Achilles Heel is the processes attached to it, such as crypto exchanges and smart contracts with vulnerabilities people can target.
Blockchain technology will be a defining factor for many industries in the coming decades as developers find new ways to use this breaking-edge technology, which is why this conversation around blockchain hacking is essential. So, let’s talk about the increased blockchain hacking in recent years.
Blockchain Hacking is Increasing
The advancement of the blockchain industry has gone hand-in-hand with a rise in blockchain hacking. As new tokens and digital assets are released, the odds of hacking are also increasing. While the inherent design of the blockchain network is secure, creators and developers are looking to find new ways to make it safer and less prone to attacks and hacking. A report by Bloomberg discussed the rise in investment into crypto security audits and the rising salaries of crypto security experts, proving that companies are taking blockchain hacking seriously and putting preventive methods in place. Individually, it is important to keep your blockchain assets secure and operate carefully when trading on crypto exchanges or using smart contracts.
So, is it possible to hack blockchain? It seems that modern-day hackers are finding a way to steal blockchain assets despite the network’s strong foundation. Increasing attacks on cryptocurrency exchanges and the 51% attacks on smaller crypto projects means that the blockchain is not invincible, and blockchain security should be at the forefront moving forward. We hope the blog post answered the question, and the next time someone asks, ‘Can the blockchain be hacked?’, you have the answer!
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