Blockchain Bridges Pose Serious Risks, Here’s Why
Blockchain bridges are becoming more and more dangerous to use.
This article is more than 2 years old
As cryptocurrency becomes more mainstream, highly valued, and widely utilized, so too does the incentive for hackers to try and siphon crypto funds from unsuspecting currency holders. As a result, large-scale crypto hacks are becoming more and more common as these criminal masterminds identify weaknesses in the systems. Oftentimes blockchain bridges are where vulnerabilities are found. By targeting these weaknesses cybercriminals are able to pull off schemes valued in the hundreds of millions. Wired reported that hackers pulled off one of their biggest heists yet when they extracted $540 million worth of popular cryptocurrencies after breaching the Ronin blockchain bridge.
As hacks, such as the one that occurred on the Ronin Bridge, increase in number and in scale, using blockchain bridges, in general, is becoming increasingly riskier for cryptocurrency holders. It would stand to reason, that to keep their assets safe, those who own cryptocurrency should completely avoid using blockchain bridges altogether. Unfortunately, that is something that is largely easier said than done.
Blockchain bridges inherently serve an exceedingly useful purpose. Blockchain bridges are the tools that allow holders of various kinds of different cryptocurrencies to exchange and convert between the different types. For instance, say you are visiting another country and you want to buy something in that country but only have US dollars. In order to purchase what you’d like you’d first need to convert US dollars to the native currency in that country. It works the same for cryptocurrency. Bitcoin can’t be used to purchase Ethereum and vice versa. It has to be converted first. Blockchain bridges are what allow for the conversion to take place.
Crypto continues to increase in popularity and new cryptocurrencies are popping up. As more investors buy up new currencies and continue to engage with existing ones, blockchain bridges are becoming more heavily trafficked. James Prestwich, an individual who focuses on the study of cross-chain communication protocols, explained that because blockchain bridges contain live money at all times, it makes them look like a treasure trove for hackers aiming to grab people’s funds. “Any capital on-chain is subject to attack 24/7/365, so bridges will always be a popular target,” said Prestwich.
In the future, in order to prevent what happened on the Ronin Bridge, blockchain bridges will need to be more tightly secured. Ronin themselves admitted that “As we’ve witnessed, Ronin is not immune to exploitation, and this attack has reinforced the importance of prioritizing security, remaining vigilant, and mitigating all threats.”
The key to better-securing blockchain bridges as a whole can likely be found in the tactics used by hackers to gain access to the funds on those bridges. The Wired pointed to the fact that many times hackers will target currencies on the bridge that were scheduled to be transferred at a pre-set date and time. Perhaps increasing security measures for transfers such as those or even eliminating automated transactions altogether would serve to slightly bolster blockchain safety.
Still, there is a long way to go. Ronin is a good example of how long of a way to go there really is. Prestwich noted that Ronin’s security is so lackluster that they hadn’t even noticed currency had been stolen for a couple of days. That certainly will do nothing to inspire confidence in those wishing to covert currency, quite the opposite, in fact. Ultimately, cryptocurrency, as a financial industry, is still very young and what it is experiencing now are some pretty uncomfortable growing pains. Blockchain bridges need to become more secure, and it’s only by learning and growing that the industry will be able to accomplish that.
