(Commonwealth Union)_ The largest cryptocurrency exchange in the world, Binance, acknowledged two days ago that the theft of about $100 million worth of cryptocurrency from its blockchain bridge running on the BNB chain had caused a double blow to its blockchain (earlier known as Binance Smart Chain).
A blockchain bridge is a device used to move cryptocurrency between several blockchain-based applications.
However, Binance’s woes didn’t stop there. Later, BNB Chain revealed in a blog post that the hacker also withdrew two million BNB tokens, which are valued approximately $570 million.
With many countries tightening their regulations on cryptocurrency trading, some, like India, levying heavy taxes on gains, and some asking for an outright ban on cryptocurrency, this year has been exceptionally difficult for cryptocurrency exchanges worldwide.
Without a question, the blockchain technology’s premise is revolutionary since it provides the opportunity to do away with middlemen like banks. Decentralization, however, has its own set of drawbacks, including exorbitant energy prices, slow speeds, and — of course — hacking.
Although blockchain projects are thought to be very secure, numerous attacks this year have exposed gaps in the system’s defenses. According to blockchain data company Chainalysis, bitcoin users have had over $1.6 billion worth of cryptocurrency stolen from them in 2022.
Six of the top seven biggest cryptocurrency breaches to date have occurred in the last two years, with Binance ($570 million, 2022), Poly Network ($611 million), and Ronin Network topping the list with $625 million each.
The difference between cryptocurrencies and blockchains must be understood. A decentralized use case for the latter is the former. Simply put, crypto is a minor but important component of what blockchains enable. Cryptography is used by cryptocurrencies, which are decentralized digital assets, to facilitate secure transactions between various parties. These transactions are logged and kept in a blockchain, a type of online ledger.
Although blockchains are almost impervious to hacking, there are still vulnerabilities outside of these digital ledgers that present chances for thieves, especially when it comes to cryptocurrency transactions and wallets. It is not impossible for hackers to access cryptocurrency owners’ wallets and use their private key, a kind of passcode required to sign transactions and establish ownership of a blockchain address, to steal cryptocurrency, as has been shown in several attacks over the years.
