Crypto News

Crypto Hacking: How it’s done!

Crypto Hacking: How it’s done!

For a consumer, user, and owner of crypto coins, the knowledge of such assets is limited to its value. It is unusual for the common user to be aware of exploits and hacking escapades which would ‘rob’ them of their much coveted virtual coin.

Though every coin worth its salt professes to be ‘unhackable,’ because of clever programs the developers have used, it is an established fact that the majority of them are penetrable.   Cryptocurrency security experts have untold stories of such hacks, especially among small tokens.

Proof-of-work not sufficient

It is commonly discussed that Bitcoin and ethereum cannot be hacked as these two coins run on the platform of cryptography as well as proof-of-work. Additionally, they are generated on the basis of consensus processes.

But technical gurus opine that in theory there are one too many ways and methods by which such penetration can be attempted.

One of the foremost of these attacks is called as the “double-spend” attack or the 51{73a9fd44c5e3bc109e3ce04f7f3bcbeac931b741f5a7d33a28586f61ae035e10} attack.

The double-spend attack is a process in which attackers can steal money by ‘reversing transactions’ on the blockchain. Bitcoin protocol has value for the longest blockchain and is assigned as the correct. This type of measurement will allow the determination of the hashing power of the blockchain. The attacker who has more hashing power in comparison to others on the network are then forced to move forward to the ‘correct’ record of transactions.

In this situation, it is known that attackers have more control over the mining power in comparison to the rest of the network. Given the safeguards such systems are built on, it is very difficult to perform the attack as the distribution of hash power is even across the system. In addition, multiple nodes are also balanced and difficult to hack. But technical experts profess otherwise.

A case in point here is small coins since their hashing power is very low and their vulnerability is high. This is proved by the high number of attacks these coins have survived in recent times.

The exploiting of such small-value coins has limited gains for the attackers. The strength of the mining power by the blockchain will define the profits such hackers are able to gain. Though, the majority of blockchain have remained safe from such attacks, their vulnerability to 51{73a9fd44c5e3bc109e3ce04f7f3bcbeac931b741f5a7d33a28586f61ae035e10} attacks is always high. Hence, small coins will have to ensure their safeguards are strong against this vulnerability.

Big asset coins such as Ethereum and Bitcoin are, however, relative less open to this particular type of attack for the pure reason of feasibility. Attacks on large networks will have poor yields as the ‘hashing power’ of the network increases. An example of the possible targets cannot be limited to Bitcoin Gold or LiteCoin Cash or ByteCoin. These have high market caps but low total hash power. The immediate challenge for hackers of these small coins is that they have to use cloud mining services which are not easily available, and will have to hire hashing power on platforms such as NiceHash.

Small cryptocurrencies and hacking possibilities are very high, and hence investors have to take all precautions including noting attacker addresses, apart from not making any transactions from them.

About the author

mm

Megan Mayle

Megan, while pursuing MBA in California, started writing blogs on the financial developments and revolutions around the globe and soon got caught up with cryptocurrencies. She has been giving consultancy about smart contracts. Megan focuses on latest updates on cryptos from banks and on regulations by governments worldwide.

Add Comment

Click here to post a comment