crypto news: Can crypto’s blockchain technology survive the test of time?

Two days ago, Binance, the world’s largest cryptocurrency exchange, admitted that its blockchain suffered a double blow when hackers stole $100 million worth of cryptocurrency from the blockchain bridge running on the BNB chain (formerly known as the Binance Smart Chain).

A blockchain bridge is a tool used to transfer cryptocurrencies between different applications running on the blockchain.

However, Binance’s woes did not end there. Later, BNB Chain said in a blog post that a total of two million tokens of its cryptocurrency BNB – worth around $570 million – were also withdrawn by the hacker.

This year has been particularly challenging for crypto exchanges around the world, with many nations tightening their laws on crypto trading, some like India imposing high taxes on winnings, and a few calling for an outright ban on crypto.

There is no doubt that the premise for blockchain as a technology is impressive, as it provides the opportunity to do away with intermediaries such as banks. But decentralization brings its own problems, such as high energy costs, slow speeds and – of course – hacks.

Blockchain projects are considered highly secure, but several hacks this year have exposed chinks in their armor. Over $1.6 billion in cryptocurrency has been stolen from users in 2022, according to blockchain data platform Chainalysis.

Of the seven biggest cryptocurrency hacks to date, six have taken place in the last two years, with Ronin Network ($625 million, 2022), Poly Network ($611 million, 2021) and Binance ($570 million, 2022) topping the charts.

Are crypto blockchains impregnable?

It is important to understand the distinction between cryptocurrencies and blockchains. The former is a decentralized use case of the latter. Simply put, crypto is a small but significant part of what blockchains make possible.

Cryptocurrencies, which are decentralized digital assets, use cryptography to ensure secure transactions between different parties. Such transactions are recorded and stored in a digital ledger called a blockchain.

While blockchains themselves are nearly immune to hacks, weaknesses outside of these digital ledgers present opportunities for thieves, especially when it comes to crypto transactions and wallets.

It is not impossible – as has been seen in several hacks over the years – for hackers to gain access to cryptocurrency owners’ wallets and use their private key – a type of password needed to sign transactions and prove ownership of a blockchain address – to steal. crypto.

There is also one way a blockchain itself can be compromised – the so-called 51% attack. Hackers can, in theory, take over a blockchain by controlling a majority of the blockchain’s computational power, called the hash rate. If they own more than 50% of the hashrate, they can introduce a modified blockchain.

This allows them to make changes to transactions that were not verified by the blockchain before they took over. Although this type of attack is possible in theory, it is extremely difficult to execute in practice.

However, with various central banks around the world becoming stricter when it comes to crypto, massive hacks like last week do not bode well for the crypto community as they deter investors.

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