More Than 130 Blockchain Security Accidents Occurred in 2018, BlockBeats Reports

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By Maud Guon Jan 30, 2019
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A total of 138 blockchain security issues happened last year, resulting in a huge economic loss of $2.238 billion.

Blockchain technology has undoubtedly become a disruptive technology after nearly three years of evolution, following big data, cloud computing, IoT and AI.

Global capital markets have already begun to beef up their laws and regulations concerning the blockchain-based crypto space.

According to the 2018 Annual Blockchain Security Report compiled by BlockBeats, technically Ant Financial, Tencent, Baidu and other tech titans have taken the lead in applying blockchain technology to the real life. Blockchain startups have also yielded great results in the underlying technology, serving as a bridge between traditional enterprises and emerging technologies.  

The blockchain space, however, has been caught in frequent security issues over the past year. Essentially, the natural drawbacks of contract mechanism and loopholes emerged in the process of blockchain development have made it easier for lawbreakers to launch attacks on the network.

Two Extremes in Crypto Land

Crypto land saw two extremes last year. Over the period from December, 2017 to April, 2018, major cryptocurrencies made their way to a bull run when the market as a whole was thriving and booming, wining over a walloping number of funds and investors. That also made crypto exchange—the biggest winner in bull market—an easy target for hackers.

Happiness, however, is often short-lived. As shown in the graph below, the prices of cryptocurrencies plunged 80–95% from the beginning of 2018, while the total crypto market cap shed more than $700bn since the January high, according to data from CoinMarketCap.

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Blockchain Security Issues Emerge More Frequently

According to data compiled by Tencent United Security Laboratory, there are three main security issues facing the crypto space, including the blockchain mechanism security, ecosystem security and user security. The three saw an economic loss of $1.25bn, $1.42bn and $56m respectively in the first half of 2018.

According to data from blockchain security company BCSEC and PeckShield, 2018 saw an economic loss of $2.238bn caused by blockchain security issues, rising by 253% from that of 2017. The year 2018 also marked the number of blockchain security accidents hitting 138, much higher than that of 2017 (15 security accidents).

Entering the new year, blockchain security issue emerges more frequently, as the amount of such accidents happened in the first month of 2019 has already surpassed that of 2017. Nonetheless, the economic loss caused by such accidents is dramatically dropping, owing to a rise in blockchain developers’ sense of security. The first three weeks of January only suffered a loss of more than $4 million.

During the first half of 2018 when the bull run in the crypto market began to gather steam, the number of crypto participants was skyrocketing, followed by a considerable increase in the frequency of security issues.   

Yet in the second half of 2018 when the crypto bear market began, the DApp industry fell prey to a series of attacks, especially EOS gambling platforms that were hit by the onslaught of cyber attacks.

Back in September 20, 2018, Japan-based crypto exchange Zaif was hacked and three cryptocurrencies—BTC, BCH, and MONA—were stolen, resulting in the loss of around $60m (6.7bn yen). 

Early last year, Tokyo-based crypto exchange Coincheck was hacked, with $532.6m worth of crypto assets stolen. This was one of the largest heists in crypto history.

Cryptonews Hub looked through the EOS cyber attacks, finding that a total of 35 DApp attacks took place on the EOS ecosystem by December 19, 2018, resulting in the theft of $1.88m worth of EOS tokens.

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(Source: Cryptonews Hub)

As multiple attack groups are now exploiting vulnerabilities behind the scenes, the EOS ecosystem is likely to see similar attacks emerge more frequently, with greater efficiency.

Cryptonews Hub is an emerging blockchain media and information services company specializing in crypto assets. Its team of experts is committed to editorial independence and journalistic professionalism, providing key insights on the latest developments involving cryptocurrency regulations around the world and innovations in blockchain technology.
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