With the growing popularity of cryptocurrencies, the number of hacking attacks on blockchain networks has also increased. Since the beginning of 2022, attackers have stolen roughly $3 billion from crypto projects, with DeFi platforms being the main victim of hacks.
What is cryptosecurity
Cryptosecurity is a risk management system that ensures that no unauthorized source can gain access to users' assets. Insufficient protection can result in the loss of funds through theft. For example, 33% of crypto-exchanges have been compromised due to crypto-security vulnerabilities.
Top 5 crypto-security threats
1. 51% Attack
The 51% attack is called a PoW blockchain vulnerability. A hacker uses it to seize control of block generation and transaction validation.
If attackers have 51% blockchain power at their disposal, they can collect all the block rewards and commissions from transactions, conduct a fork of the main blockchain, prevent other miners from finding blocks, and spend one coin multiple times over.
A 51% attack is difficult to execute and very expensive for hackers. Such an attack on the bitcoin network would cost $813,000 per hour.
2. Sibil attack
A Sybil attack occurs when one person or group controls multiple network nodes in P2P. Attackers create multiple nodes and connect them to the blockchain. The network nodes appear to be independent, but will be controlled by one person. By attacking the network in this way, hackers can disrupt the network or block unwanted users.
3. Double-Spending attack
Double spending is associated with the risk of re-spending cryptocurrency. A transaction is considered complete when it is confirmed by both parties. However, it takes time to complete a transaction on the blockchain, so fraudsters have a chance to spend the same coins twice.
The main types of double-spending attacks:
Finney attack. A miner puts a transaction into a block, but does not spend it. After finding the mined block, he redirects the same coins into another payment
Race attack. The hacker sends the same coin to two different recipients from different devices. If one recipient accepts it without confirming the block, it will be rejected later in the mining process
Vector76 attack. The miner creates two nodes: one connected to an exchanger or exchange, the other connected to a peer-to-peer blockchain network. Then it generates two transfers of different amounts. The transaction with a higher value is sent directly to the exchange or exchanger by the hacker, while the transaction with a lower value is sent to the blockchain. Thus, the first payment will be rejected and will go back to the sender's account
4. Routing attack
Even though blockchain nodes are scattered around the world, different ISPs communicate with each other and can have an impact on the network. Bitcoin has already been manipulated in this way at the local level.
A global routing attack can follow two scenarios:
Network split. Some nodes would lose communication with the rest and effectively create a parallel blockchain. If this happens, isolated miners will lose transaction information and stop receiving payments for mined blocks.
Block Delay attack. Right now, a new block on the bitcoin network takes about 10 minutes to mine. If this time frame increases, the blockchain could come to a complete halt.
5. Smart contracts attack
Smart contract hacks are one of the most common methods of attack. They usually occur because of weaknesses in smartcontract languages such as Solidity.
What is cryptosecurity
Cryptosecurity is a risk management system that ensures that no unauthorized source can gain access to users' assets. Insufficient protection can result in the loss of funds through theft. For example, 33% of crypto-exchanges have been compromised due to crypto-security vulnerabilities.
Top 5 crypto-security threats
1. 51% Attack
The 51% attack is called a PoW blockchain vulnerability. A hacker uses it to seize control of block generation and transaction validation.
If attackers have 51% blockchain power at their disposal, they can collect all the block rewards and commissions from transactions, conduct a fork of the main blockchain, prevent other miners from finding blocks, and spend one coin multiple times over.
A 51% attack is difficult to execute and very expensive for hackers. Such an attack on the bitcoin network would cost $813,000 per hour.
2. Sibil attack
A Sybil attack occurs when one person or group controls multiple network nodes in P2P. Attackers create multiple nodes and connect them to the blockchain. The network nodes appear to be independent, but will be controlled by one person. By attacking the network in this way, hackers can disrupt the network or block unwanted users.
3. Double-Spending attack
Double spending is associated with the risk of re-spending cryptocurrency. A transaction is considered complete when it is confirmed by both parties. However, it takes time to complete a transaction on the blockchain, so fraudsters have a chance to spend the same coins twice.
The main types of double-spending attacks:
Finney attack. A miner puts a transaction into a block, but does not spend it. After finding the mined block, he redirects the same coins into another payment
Race attack. The hacker sends the same coin to two different recipients from different devices. If one recipient accepts it without confirming the block, it will be rejected later in the mining process
Vector76 attack. The miner creates two nodes: one connected to an exchanger or exchange, the other connected to a peer-to-peer blockchain network. Then it generates two transfers of different amounts. The transaction with a higher value is sent directly to the exchange or exchanger by the hacker, while the transaction with a lower value is sent to the blockchain. Thus, the first payment will be rejected and will go back to the sender's account
4. Routing attack
Even though blockchain nodes are scattered around the world, different ISPs communicate with each other and can have an impact on the network. Bitcoin has already been manipulated in this way at the local level.
A global routing attack can follow two scenarios:
Network split. Some nodes would lose communication with the rest and effectively create a parallel blockchain. If this happens, isolated miners will lose transaction information and stop receiving payments for mined blocks.
Block Delay attack. Right now, a new block on the bitcoin network takes about 10 minutes to mine. If this time frame increases, the blockchain could come to a complete halt.
5. Smart contracts attack
Smart contract hacks are one of the most common methods of attack. They usually occur because of weaknesses in smartcontract languages such as Solidity.
The vulnerability that hackers exploited to hack The DAO for $60 million was discovered during a security audit of Ethereum by Least Authority. If this problem had been fixed before the launch, the hack could have been avoided.
In the case of the blockchain, a function in or sending tokens from a vulnerable smart contract will trigger a function in a malicious contact. And then will repeat this action over and over again until the contract has updated its balance.