The security promise of blockchain systems is real, but not enough to cost the overall ecosystem an enormous loss worth over $9.8 billion in the 2021 calendar year. According to Slowmist data, the nascent industry is still predisposed to a number of security woes ranging from hacking to wallet exploits amongst others, and the loss trend has been growing from 2018 to date.
The data revealed that as many as 231 blockchain-related mishaps were recorded this year cutting across almost all aspects of the ecosystem. As Slowmist detailed, the recorded security breaches include 170 incidents linked to ecological DApp and decentralized finance, 15 exchange security incidents, 8 public chain security incidents, 3 wallet security incidents, and 35 other types of security incidents.
Taking a peek into the protocols that were affected, the Poly Network hack which saw over $600 million taken by a white hat hacker showcases the frailty of the growing DeFi ecosystem. While the Poly Network hacker was kind enough to return the funds to the interoperability protocol, however, other DeFi protocols have not been so lucky.
Bitcoin Satoshi Vision (BSV) also suffered a 51% attack on August 4 and as many as 100 blocks were reorganized. Additionally Ethereum Classic (ETC) tweeted on September 4th that the ETC mainnet suffered a fork due to a vulnerability in the Ethereum client Geth. Beyond these protocols, Liquid wallet, Cryptopia, and Ledger Wallet have also experienced hacks and other forms of security breaches in the past year.
Blockchain Ecosystem Security Fragility Re-echoes the Trust But Verify Mantra
The blockchain ecosystem and its host of security fragility has re-echoed the trust but verify mantra. While investors do not necessarily suffer directly from these security breaches, continuous susceptibility to hacks can hurt a protocol and its backers in many ways.
One of the pioneering trading platforms, Mt Gox went bankrupt after suffering a very depressing hack that saw about 850,000 Bitcoins removed from the platform back in 2014. Some of this BTC was recovered and is on track to be redistributed to the owners who stand a lot to gain considering BTC has grown in value within that time frame, a rare coincidence that favors the affected exchange customers.
As the broad crypto ecosystem grows, so also does the sophistication in data hacks from cybercriminals and all stakeholders will need to work hand in hand to block the potential source of leaks in these protocols. One of these methods is the restriction of unverified users as Upbit enforced per an earlier report from TheCoinRise.
