In March 2022, over $625 million worth of cryptocurrencies were stolen from the Ronin Bridge protocol as a result of a malicious attack from hackers, marking the event as one of the biggest cryptocurrency heists ever. In June, Harmony One’s Horizon Bridge lost over $100 million in an attack. In August, another $200 million was lost from the Nomad Bridge as a consequence of an exploit of a vulnerability in its underlying technology — smart contracts.
In total, Chainalysis estimates that over $2 billion worth of digital assets have been stolen from blockchain bridges in 2022 alone. This figure accounts for approximately 69% of all stolen crypto funds in the year.
The frequency of these bridge hacks has become a warning signal for users and a significant threat to building trust in blockchain technology. As adoption of cryptocurrency accelerates, the industry is facing growing pressure to fix the flaws that have allowed these exploits.
In this article, we’ll look at why blockchain bridges have become an essential part of the crypto ecosystem, the difference between trust-based and trustless bridges, and the potential weaknesses in each model that enabled hackers to siphon funds in each one.
What are blockchain bridges?
Blockchain bridges, also known as network bridges or cross-chain bridges, are a tool designed to solve the challenge of interoperability between blockchains. Bridges have become a necessary component of the blockchain industry because, as it stands, blockchains operate in silos and cannot communicate with one another.
For example, users cannot use bitcoin (BTC) on the Ethereum blockchain or ether (ETH) on the Bitcoin blockchain. So if one user (let’s call him Billy) who holds all his funds in BTC wants to pay another user (let’s call her Ethel) for an item but Ethel only accepts ETH, Billy hits a wall. He can’t send BTC directly to Ethel. He can take extra steps to buy ETH or trade a portion of his BTC for ETH, but BTC cannot be sent directly to Ethel. This can be seen as a major disadvantage in comparison to fiat currencies and credit cards, which can be used across several providers.
Blockchain bridges aim to eliminate this issue.
Continue reading: https://www.coindesk.com/learn/are-blockchain-bridges-safe-why-bridges-are-targets-of-hacks/
In total, Chainalysis estimates that over $2 billion worth of digital assets have been stolen from blockchain bridges in 2022 alone. This figure accounts for approximately 69% of all stolen crypto funds in the year.
The frequency of these bridge hacks has become a warning signal for users and a significant threat to building trust in blockchain technology. As adoption of cryptocurrency accelerates, the industry is facing growing pressure to fix the flaws that have allowed these exploits.
In this article, we’ll look at why blockchain bridges have become an essential part of the crypto ecosystem, the difference between trust-based and trustless bridges, and the potential weaknesses in each model that enabled hackers to siphon funds in each one.
What are blockchain bridges?
Blockchain bridges, also known as network bridges or cross-chain bridges, are a tool designed to solve the challenge of interoperability between blockchains. Bridges have become a necessary component of the blockchain industry because, as it stands, blockchains operate in silos and cannot communicate with one another.
For example, users cannot use bitcoin (BTC) on the Ethereum blockchain or ether (ETH) on the Bitcoin blockchain. So if one user (let’s call him Billy) who holds all his funds in BTC wants to pay another user (let’s call her Ethel) for an item but Ethel only accepts ETH, Billy hits a wall. He can’t send BTC directly to Ethel. He can take extra steps to buy ETH or trade a portion of his BTC for ETH, but BTC cannot be sent directly to Ethel. This can be seen as a major disadvantage in comparison to fiat currencies and credit cards, which can be used across several providers.
Blockchain bridges aim to eliminate this issue.
Continue reading: https://www.coindesk.com/learn/are-blockchain-bridges-safe-why-bridges-are-targets-of-hacks/
