It is a testament to the popularity of the cryptocurrency space and to the interest levels of many investors that the digital token world has not been completely upended as a result of hacks and thefts. Even now, years after the digital currency space first emerged and gained in popularity around the world, experts estimate that millions of dollars in coins and tokens are stolen every day.
All too often, headlines turn toward the latest theft or large-scale hack of a cryptocurrency exchange or a digital wallet somewhere around the world. Still, investors are willing to continue to invest money in digital currencies as a group, regardless of the uncertainty such security threats pose. While markets may witness downturns after these events, they tend to be short-lived. Now, a report by Zycrypto suggests that hacks and other attacks on the digital currency space may actually be beneficial overall.
Hacks and Bounties
When a high-profile hack takes place, many companies and developers in the cryptocurrency world (either directly involved with the event or not) retreat to the drawing board to examine the security implications for themselves. An example of this process can be seen when the Chinese cybersecurity company Qihoo 360 identified a serious weakness in the EOS platform in May 2018. In response, Justin Sun, the founder of another digital currency called Tron, took the opportunity to re-evaluate his company's security operations. Tron released a statement about its security policies and priorities and bolstered its "bug bounty" program that offers rewards to individuals who discover security concerns in the platform.
Attacks and Evolution
EOS and Tron are two digital currencies that have either been forced to respond to security threats or that have chosen to do so based on attacks on other platforms preemptively. Zycrypto argues that, because hacking will always continue, regardless of the technology in question, attacks of this type actually inspire evolutionary development in the digital currency space. In a "survival of the fittest"-type world, those coins, exchanges, and companies that are ill-equipped to deal with these threats will eventually either lose customers or be pushed out of the space entirely. This will leave only the most secure coins, tokens, and related companies. Only the best blockchains and apps will ultimately survive, and they will also be obligated to continue to develop as hacking grows more sophisticated.
President and CEO of BlockStar, Christian Ferri, suggests that today's hacks will become tomorrow's security solutions. "As in every technology, hacking will be painful for some in the short term; but it will be a major driver in strengthening the crypto ecosystem, making it more secure, which is key for mass adoption," he says.
CEO and co-founder of Sagewise, Amy Wan, agrees. She points out that there "will always be a community of crypto enthusiasts, despite all the hacks. But blockchain and crypto will not become more mainstream unless and until the space resolves these fundamental infrastructure issues and provides users with transactional confidence and certainty."
Tron is not the only digital currency offering rewards for the discovery of potential bugs or security flaws. Increasingly, more and more other entities in the cryptocurrency space are adopting a similar strategy. While this process is unlikely to stop all hacking attempts, it will nonetheless help to increase the security of those individual coins and companies, thereby helping to enhance the security of the entire digital currency space. Without security, it's unlikely that digital currencies will ever enjoy the stability necessary for mainstream adoption. In the meantime, as hacks continue to take place, emerging leaders in the crypto world will strive to offer the safest, most secure product possible.