“
While the discussions focus on how blockchain technology and cryptocurrencies can transform many industries. The cryptocurrency community is witnessing several hackers steal millions from blockchains, exchanges, and bridges.
From the 2014 MT GOX hack to the recent Nomad Bridge attack, hackers are advancing along with the growth of blockchain technology and the cryptocurrency industry. Several million-dollar attacks have occurred, and hackers are becoming more ambitious and dangerous.
In the past few days, Attacks have escalated, as well as the amount of funds stolen has increased too. Many individuals are in a panic as they have lost their savings, The attacks on the Solana wallets, Nomad bridge, and ZB exchange brought another riskier prospect of cryptocurrencies. There are many doubts surrounding the security of cryptocurrencies: how can these bridges be easy targets for hackers? how hackers can easily access other crypto wallets?
Let's get into the detail of these three different types of attacks and how hackers make millions through them.
Bridge attacks
Blockchain bridges are applications that allow people to transfer digital assets between blockchains. Since cryptocurrencies are often isolated and unable to communicate with one another (for example, you cannot make a transaction on the Bitcoin blockchain using Dogecoins), "bridges" have emerged as an essential mechanism, if not a vital missing link, in the cryptocurrency economy.
The bridge "locks" your cash on one side and dispenses the equal amount in so-called "wrapped" tokens on the other. To change one form of cryptocurrency into another, bridge services "wrap" the money. As a result, if you visit a bridge to use a different currency, such as Bitcoin (BTC), the bridge will dispense wrapped bitcoins (WBTC). It represents stored value in a flexible alternate format, similar to a gift card or a cheque. Bridges require a reserve of cryptocurrency currencies to back all of those wrapped coins, and hackers frequently target this reserve.
Additionally, if a bridge becomes popular over time, it can have a lot of money (imagine hundreds of millions of dollars) tied up in its smart contracts. If those smart contracts contain security flaws, some or all of that money can be stolen. As former Ethereum co-founder Vitalik Buterin has pointed out, another issue with crypto bridges is that they are by design vulnerable to attacks on two sides.
Nomad attack
On July 29, Nomad, a bridge protocol for moving cryptocurrencies across multiple blockchains, lost about $200 million due to a security flaw.
In the case of Nomad, it appears that a fault in its smart contract allowed someone to set up a cryptocurrency transaction such that they sent a few amounts of crypto on one side, but received a larger amount on the other, as multiple experts stated on Twitter. For example, you could transfer 0.1 Crypto on one side and receive 100 Crypto on the other.
Things start to become intriguing at this point. Usually, when a security flaw like this is discovered, a skilled hacker or a small group can quickly drain out all the money. However, in the case of Nomad, once someone successfully stole some cash from the Nomad bridge, other people joined in and also grabbed some money.
This is not the only bridge that has been compromised this year. The Ronin Bridge, which was used by the developers of the play-to-earn game Axie Infinity, was hacked earlier this year for approximately $625 million. The Harmony Bridge was also hacked for $100 million.
Wallet Hacks
”
”