Top 6 most dangerous blockchain attacks that have wiped away millions

The crypto and the blockchain space are dubbed as “dark web” for a reason. Did you know that this controversial space is the biggest marketplace when it comes to ransomware software? You also get customized ransomware products today, ranging from $1,000 – $10,000. American crypto holders have lost a whopping $1.18 billion-worth of wealth to crypto attacks from 2018 to 2022. Again, another set of crypto scams have resulted in loss of $1billion+ between Q1 of 2021 to Q1 of 2022. Yes, blockchain technology attacks are real. Read more

There is no denying of the fact that the cutting-edge decentralized infrastructure of blockchain makes it mighty enough to withstand hacker attacks. But, these are mostly about traditional hackers and scammers. Hackers and scammers are an extremely brilliant and sharp bunch, and they are always evolving. It’s unfortunate that they chose to side with evil.  Bottom line is, with the arrival of a powerful technology like blockchain, the scammers and hackers too have been upgrading their nefarious arsenal- leading to a series of blockchain attacks.

The post below offers a brief on the major blockchain attacks that have shook the blockchain and crypto scene in recent times.

51% Attack

This is one of the most notorious blockchain attacks to be committed ever.

Ask any crypto folk about Bitcoin Gold in 2018 and s/he is sure to shudder at the very reminder of it.

BCG was one of those unfortunate coins that fell prey to the notorious 51% attack. As an aftermath of the attack, multiple crypto exchanges housing the coin cumulatively lost a jaw-dropping volume of 388,000 BTG or $18 million. BCG encountered 51% attack once again back in 2020.

In 51% attack, a team of PoW miners somehow acquires control of the blockchain’s hash rate. How is it made possible? Well, in this case, a team of illicit miners gang up to rent or purchase a huge volume of hash power that offers them control of more than 50% of that blockchain network.

However, BCG isn’t the only coin that has fallen prey to heinous blockchain attacks. Ethereum, the second largest crypto, had also been the target of serious blockchain attacks, especially 51% attack.

Good thing is, with Ethereum finally moving completely to PoS, these blockchain attacks won’t be viable with the ETH blockchain.

DDOS

DDOS is the acronym for Distributed Denial-of-Service – one of the most ghastly blockchain attacks.

In this case, the hacker congests a blockchain network with a series of requests that eventually leads to overload and serious downtime. As a result, the blockchain network becomes unavailable for the users for a while.

In case of  DOS blockchain attacks, the requests come from one single source. It’s comparatively a simpler hack and more feasible to prevent compared to the highly advanced DDOS blockchain attacks.

The DDOS blockchain attacks are extremely complicated as here the illicit requests come from multiple sources- making the whole thing a near-impossible task to track.

Again coming back to the BCG reference- the day the BCG site was launched, DDOS attackers flooded the site with an eye-watering 10 million malicious requests every single minute!

Routing attack

Routing attack is undoubtedly one of most menacing blockchain attacks because the attack consumes both the blockchain platform and individual nodes. Put simply, routing blockchain attacks are like that fatal spell that does not spare one single inch of a blockchain network.

In this case, the attacker changes transactions prior to sending them over to peers. Worse, the hacker subdivides the blockchain network into various fragments that leads to loss of connection in between the nodes. This whole process makes it almost-impossible for the nodes to detect the problem in the first place.

Sybil Attack

Sybil blockchain attacks are about building fake identities for manipulating a P2P blockchain network. One individual hacker controls the entire scene- the highlight of these blockchain attacks is that all the fake identities look the same to innocent users.

Sybil blockchain attacks are especially prominent during online voting.

Then, Sybil blockchain attacks are launched when the attacker wants to censor out specific participants in a discussion or activity over the blockchain platform.

Is it possible to prevent these blockchain attacks? Well, according to experts, one way to address the problem is to surge the fee to develop an identity.

Eclipse Attack

A byproduct of the Sybil blockchain attacks, the Eclipse version targets mostly the single nodes. Sybil attackers generally launch the attack on the major chunk of a blockchain network. But in the case of Eclipse, the attacker separates (read eclipses) the target node from the rest of the network. This way, the attacked node only sees the details manipulated by the attacker and carries out transactions on the basis of that twisted information. The problem can further lead to double-spending blockchain attacks.

Attack on smart contract code

No discussion of blockchain attacks would be complete with attacks on smart contracts.

The infamous DAO attack on Ethereum blockchain led to a robbery of around $70 million from the network in broad daylight.

So, how did it happen?

Smart contracts might carry bugs in their source code, offering a solid loophole for prying hackers. The same thing happened with the DAO attack on Ethereum. A hacker somehow discovered some kind of vulnerability in the network’s smart contract code and exploited it to flee with sacks of money.

And what’s the worst part about the vulnerability risk of a bugged smart contract code? Well, it’s the same cutting-edge benefit of immutability that makes block manipulation impossible in a blockchain. Due to immutability, you cannot change smart contract codes once they have been developed. Thus, if it’s a bugged one, it will forever remain a bugged one and vulnerable to malicious attacks.

Added to blockchains, the crypto scene has also been marred with attacks on wallets, especially hot wallets.

These attacks call for more preventive and testing measures while building a blockchain. Also, with hackers getting more evolved with each passing year, blockchain developers must also commit themselves to developing more powerful defense measures to safeguard the nodes and also the entire network.