United States of America: Last week, thieves stole an estimated $190 million from American crypto firm Nomad. This was the seventh hack in 2022 to target the blockchain “Bridge,” These are strings of code that help move cryptocurrency coins between different applications.
According to London-based blockchain analytics firm Elliptic, hackers have already stolen more cryptocurrency from bridges this year than they did last year, totaling around $1.2 billion.
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Known as an alternative payment method ‘cryptocurrency’ was developed using encryption methods.
Due to the encryption technology, cryptocurrencies can act as a means of payment and as a virtual accounting system. A cryptocurrency wallet is required to use cryptocurrency.
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Ronghui Hu, associate professor of computer science at Columbia University in New York and co-founder of cybersecurity company CertiK, said: “It’s a battle where the cybersecurity company or the project may not be the winner.”
“We have implemented many security initiatives. If they examine a project and find no bugs, they (hackers) can move on to the next one until they identify a vulnerability.”
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Currently, most digital tokens operate on their own separate blockchain, which acts as a sort of online ledger for cryptocurrency transactions. When the initiatives using these coins are isolated, the chances of widespread use are reduced.
Blockchain bridges attempt to overcome these obstacles. in the “Web3”, The much-touted vision of a digital future, in which cryptocurrencies are integrated into online life and commerce, will play a major role, according to proponents.
However, the weakest link can be a bridge.
The Nomad hack ranks as the eighth biggest cryptocurrency theft of all time. The theft of $615 million from Ronin, used in a famous online game, and the theft of $320 million from Wormhole, used in so-called decentralized banking applications, are two other thefts from bridges that are related occurred this year.
According to Steve Bassi, co-founder and CEO of malware detector PolySwarm, “Blockchain bridge is the most fertile ground for new vulnerabilities”.
Support will be extended to Nomad and other companies producing the Blockchain Bridge software.
San Francisco-based Nomad said it received $22.4 million from investors including major exchange Coinbase Global (COIN.O) just five days before the hack. Pranay Mohan, co-founder and CEO of Nomad, described his security method as “The gold standard.”
It is said to be working with law enforcement and a blockchain analytics company to monitor the stolen funds. She promised late last week a reward of up to 10% for returning money stolen on the bridge. It announced Saturday that it has recovered more than $32 million in stolen funds so far.
According to Mohan, bridging user funds is our first priority and community is most important when it comes to cryptocurrencies. “Any party that returns 90% or more of improperly used funds will be considered ‘white hat’.”
“We will not incriminate white hats” He claimed allegedly in relation to ethical hacking.
For example, some bridges are replacing crypto coins to make them interoperable with different blockchains while keeping the original coins secure. Others rely on smart contracts, complex protocols that complete transactions automatically.
All of this can contain bugs or other vulnerabilities in the programming that can open the door to hackers.
How can the problem be treated?
According to some experts, audits of smart contracts and “bug bounty” programs that reward open source reviews of smart contract code could help prevent cybercrime.
Others argue that reducing control over bridges between smaller organizations would increase their flexibility and code openness.
According to Victor Young, founder and chief architect of American blockchain company Analog, cross-chain bridges are an attractive target for hackers because they often use a centralized infrastructure that typically locks down assets.
Also Read: Three Indians Arrested in US for First Time in Crypto Insider Trading Scheme