The crypto market has been plagued with some of the worst hacks that the market has seen in years. While the crypto space has always seen its fairs share of bad actors, the sheer volume and frequency with which these hacks have started taking place is turning away many new investors.
Of course, the frequency with which these attacks have increased means that hackers have found a weak link in the system, which they are using to steal money from various apps and companies.
The weak link in question here is the crypto cross-chain bridge that nearly every major crypto firm makes use of. And since it is a major part of the overall system, even the largest firms are struggling to find a reasonable solution to stop people from taking advantage of this.
Why are Cross-Chain Bridges so Important
Cross-chain bridges are some of the most vital parts of the crypto framework, as they help transfer coins at a rapid pace. The major selling point of cryptocurrencies, its speed, very much relies on these bridges.
A better way to visualize a cross-chain bridge is that it is a highway that connects major crypto apps, companies, and services. However, despite being an integral part of the crypto framework, they are also very vulnerable to bad actors who can intercept a transaction.
More specifically, hackers are able to use an exploit that allows them to steal tokens when they are in transit, without being traced. And it took one of the biggest exchanges in the country getting hacked for people to start taking notice.
The Binance Hack
Binance has recently fallen victim to a major hack as well, with the firm losing $100 million. While the firm was able to locate the cause of the hack as well as how it happened, their “solution” was to suspend all transactions.
Unfortunately, the most concerning thing about the Binance hack was that even the biggest cryptocurrency exchange in the world was unable to find a dedicated solution to this problem. Their most recent solution was to suspend various high-profile transactions.
This is not an effective fix for the issue, and the company will have to work fast if they want to keep its investors happy. But most importantly, if they can’t do it, then who can?
Other Solutions to the Problem
Of course, there can be other solutions to this problem, but many of the companies who are responsible for coming up with the solutions will likely struggle since they will also have to suspend operations.
These hacks didn’t just affect many companies, but they have also deeply affected investors, as they no longer feel safe investing in crypto, further contributing to the downfall of the market.