Blockchain Can Be Hacked: A Hack That Changed The Future
Hacks happen. Whether it is your bank account getting hacked, or something more elaborate, there is always a chance that the thing you are trusting will be compromised. This article breaks down how the future of cybersecurity may very well be in blockchain and how this technology’s vulnerability can be exploited.
Contents
How does the blockchain work?
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Bitcoin was the first and most widely used blockchain network. Ethereum is second, with more than 20 million active nodes. Other blockchain networks include Ripple, Litecoin, Cardano, IOTA, and Dash.
A hack on the Ethereum blockchain in the summer of 2016 resulted in $60 million worth of ether being stolen. The event sparked increased attention to cybersecurity risks associated with blockchains, particularly for cryptocurrencies that may have high value because they are not subject to government or financial institution control.
The risks of blockchain hacking.
There is no doubt that blockchain technology has the potential to revolutionize how we do business, but like with any new technology, there are also risks associated with it. In this article, we’ll take a look at one of the most common types of blockchain hacking – the DAO hack – and how it could have changed the future.
The DAO was a digital asset management platform built on the Ethereum blockchain. It was created in 2014 by a team of developers led by Vitalik Buterin. The DAO was designed to allow people to invest in “ DAO tokens”, which would give them a say in how the platform was run.
On May 15th, 2016, hackers exploited a vulnerability in the DAO code that allowed them to withdraw almost $60 million worth of ETH (Ethereum’s native currency) in a single transaction. This attack caused an uproar among Ethereum users, who saw their investment evaporate in just seconds.
The DAO hack has been cited as one of the catalysts for Ethereum’s meteoric rise in popularity over the past two years. It’s also important to note that this attack wasn’t even the first time the DAO had been hacked; in fact, another hacker successfully exploited a vulnerability in The DAO’s code in June 2016, which ultimately led to partial reimbursement of investors.
The DAO’s developers were ultimately able to restore their funds and return the remaining stolen Ether to its rightful owners. This incident showed that Ethereum was more than capable of handling the kind of complex smart contract functionality that many financial institutions are flocking towards today.
Different ways a hacker can hack the blockchain
There are a number of ways in which a hacker could hack the blockchain, and each one has the potential to have a significant impact on the future of this technology. Here are three examples.
1. Hacking the software that generates blocks on the blockchain:
This is by far the most common way in which hackers attack blockchain systems. If someone can hack into the software that creates new blocks on the blockchain, they can manipulate it to add false records, effectively cheating other people out of their rightful rewards. This could have serious consequences for the network as a whole, potentially leading to its collapse.
2. Hacking the nodes that make up the blockchain network:
Nodes are computers that help keep the blockchain system running by verifying and transmitting transactions. They’re essential to its functioning, but they’re also vulnerable to attack. A hacker who gains access to a large number of nodes could use them to tamper with transactions or blockading others from accessing the network. This could have a devastating effect on the viability of the blockchain system as a whole.
3. Hacking into cryptocurrency exchanges and stealing user data:
Cryptocurrency exchanges are a popular target for hackers, just like the exchanges that power Bitcoin. If a hacker gains access to customer data on an exchange, he or she can use it to steal cryptocurrency from users who are unaware of their own accounts’ vulnerability.
4. Hacking into individual user wallets and stealing Cryptocurrencies:
It can be stored in various types of wallets, including paper wallets and hardware devices like USB drives. If a hacker gets his hands on either one, he can theoretically use that information to steal cryptocurrency from a user’s digital wallet — again without the victim’s knowledge.
5. Hacking the blockchain:
Itself attack that could have value for hackers even if it doesn’t lead to the collapse of a blockchain system would be simply deleting data from the ledger itself. That would mean a hacker could make changes to the blockchain without anyone noticing, and other users would have no way of knowing that their transactions had been altered.
Transferring coins from one wallet to another without hacking
When it comes to blockchain technology, there are a few things that users need to be aware of. For example, it’s important to remember that a blockchain is a digital ledger of all cryptocurrency transactions. This means that any user with access to the blockchain can view all of the activity that has happened on the network since its inception. In other words, if you want to move coins from one wallet to another without hacking, you’ll need to follow some basic precautions.
First and foremost, you’ll need to make sure that you have access to both of your wallets. If you only have access to one of them, you won’t be able to move your coins without hacking. Second, it’s important to remember that blockchain is decentralized, which means that no single party can control or manipulate the data within it. Incrementors give a technical SEO checklist that guarantees you the whole progress of our technical SEO service. This means that anyone who tries to hack your wallet will likely fail. Lastly, it’s always best practice to use a password protection scheme when moving coins between wallets. Doing so will help protect your coins from theft and attack.
Conclusion
Blockchain technology is one of the most promising new technologies on the market, and its potential impacts are tremendous. However, like any other technology, blockchain can be hacked. In this article, we explore a hack that changed the future of blockchain technology and how you can protect yourself from similar attacks in the future. By reading this article, you will understand what Hacken is and why it matters, as well as learn about some simple steps you can take to stay safe online. Finally, I provide a link to our full guide on how to protect your business from hackers.
Shiv Gupta is the Founder and Head of Growth at Incrementors. Incrementors is an Award-Winning Digital Marketing Agency that helps clients to grow their business online by generating more traffic, leads, and sales. Incrementors specializes in providing customized, tailored online marketing solutions highly specific to the needs of the clients.