Over a billion dollars worth of cryptocurrenices have been stolen by hackers over the past decade, compromising supplies of Bitcoin and Ether as well as the technology supported them.
According to Bloomberg Technology‘s interview with fintech expert Lex Sokolin, hackers have stolen $1.2 billion worth of Bitcoin and Ether. Sokolin, who is the global director of fintech strategy at Autonomous Research LLP, emphasized that cryptocurrency hacking is costly for businesses and very lucrative for the hackers involved. “It looks like crypto hacking is a $200 million annual revenue industry,” Sokolin said.
According to Susan Eustis, CEO of WinterGreen Research, the jeapordy of cryptocurrency technology has cost companies and governments about $11.3 billion. More than 14% of Bitcoin and Ether supplies have been compromised.
However, the greatest cost of this could perhaps be on the reputation of the technology that tracks cryptocurrencies. By definition, according to founder of consulting firm egomonk, Sartaj Anand, the foundation and appeal of blockchain lies in the inability to hack the system. “A blockchain is a distributed public ledger system. Imagine if everyone knew what they were transacting with, but their field of view was limited to their only transaction,” said Anand. “So they couldn’t know what you were transacting with, or you had anonymity, but everyone knew that it’s on this common chain where because it’s on this common chain and everyone keeps verifying it, then there is no way to hack it or counterfeit it, essentially.”
The concept of blockchain relies heavily on transparency and anonymity, so to see such heavy costs result from the endangerment of the technology could risk rendering it obsolete.
According to a September 2017 paper on the security issues and challenges facing blockchain, the flaws of the system result from the mechanism itself. The technology relies on peer-to-peer networks and using distributed consensus algorithm which sometimes causes divergent crypto ledgers that make it easy for hackers to falsify date.
Blockchain remains to be relatively new technology which still needs to develop and advance in order to become more stable.